THE HIGH COURT
JUDICIAL REVIEW
			Record No. 255 JR 1996 
BETWEEN
MICHAEL MURPHY
			APPLICANT
AND
THE REVENUE COMMISSIONERS
			RESPONDENTS

JUDGMENT of Mr Justice McCracken delivered the 17th day of February 1998

THE ISSUE IN THESE PROCEEDINGS
	The Applicant is a higher executive officer with the Respondents.  He is in dispute with them as to whether he is entitled to receive two long service increments to his salary, which are payable under certain circumstances.  In November, 1995 a decision was made by the Respondents to defer these increments for further consideration in 
October, 1996.  As a result, on 27th November, 1995, as was his right, the Applicant invoked a grievance procedure set out in a Department of Finance circular 1/92.  This circular sets out a detailed set of procedures to be followed where an individual officer is in dispute with a branch of the public service.  There are eight stages in this procedure and the parties have already followed the steps set out in the first seven stages.  Stage VIII involves the reference under certain circumstances of the dispute by the Respondents' personnel officer to a mediation officer appointed by the Minister for Finance.  The Respondents have refused to refer this dispute under stage VIII, and that decision has led to these proceedings.  
	I would emphasise that I am not, in any way, determining the merits or otherwise of the Applicant's claim to long service increments.  I am only concerned with the operation by the Respondents of the grievance procedures.  Nevertheless, to understand the problem, it is necessary to consider the background to the dispute.

INCREMENTS
	The parties agree that the payment of the increments is governed by 
circular 9/87 of the Department of Finance.  The relevant paragraphs in that circular are as follows:

	"2.	An increment is an increase in pay for which provision is made in a pay scale.  As a general rule increments are granted annually provided an officer's services are satisfactory.
	3.	The onus is on individual officers to show that their performance during the year merits an increment.  It follows that officers are not entitled to any prior or formal warning of possible deferral of an increment.  However, every effort should be made to ensure that officers are advised in good time of any perceived deficiencies in their performance and are given an opportunity to remedy them.
	8.	Individual departments bear the primary responsibility for ensuring that increments are granted only to officers whose attendance, performance and commitment throughout the year have been completely satisfactory.  As a general rule, no officer below the rank of Higher Executive Officer (or equivalent rank) should complete the incremental form.  Arrangements should be made to acquaint such officers of the considerations to be borne in mind in completing the incremental form and of the importance attached to the grant of the increment in question.  
	13.	If a certificate of satisfactory service cannot be given, payment of the increment will be deferred for a specified period e.g. 3, 6, 9 or 12 months.  On the expiration of the period, the officer's performance should be reviewed and the increment may be allowed with effect from the end of the review period, provided the officer's service is satisfactory.  The increment should not be restored with effect from an earlier date save in the most exceptional circumstances." 

	Thus it can be seen that there is no absolute right to an increment, and it was accepted before me by Counsel for the Applicant that it is for the Applicant to satisfy the Respondent that he merited an increment.  It also appears that if the Respondent believes that it cannot certify the Applicant as having completed satisfactory service, there must be a deferment of consideration of the Applicant's claim for a stated period, when it must be reviewed.  
	The circular 9/87 quoted above is a general provision regarding increments.  The particular increments which are the subject of this dispute are dealt with in a further circular 24/95 which arose out of an agreement with the Public Service Executive Union.  The relevant increment as far as the Applicant is concerned is dealt with in paragraph 17 of that circular which reads as follows:-

	"Officers serving in the relevant grades on 1 October, 1994 will be entitled, on a personal basis to a second long service increment as shown in the appendix subject to completion of six years service on the maxima of the relevant scales - paragraph 19 below refers...."

	It is accepted by the Applicant that the use of the words "on a personal basis" means that there is no entitlement as of right to this increment, but that it is subject to satisfactory service.  The Applicant was qualified for this increment in that he had completed the necessary service.

THE DISPUTE BETWEEN THE PARTIES
	On 22nd November, 1995 a meeting took place between Mr H. B. Early who was the Applicant's immediate superior, and the Applicant, in the course of which the Applicant was informed by Mr. Early that he would not be recommended for long service increments, and that Mr. Early intended to recommend that the granting of the increments be deferred until October, 1996.  He was given a number of reasons for this decision based on allegedly unsatisfactory performance of his duties.  For the purpose of this Judgment it is not necessary to consider whether the Applicant's performance was satisfactory, it is sufficient to say that a number of reasons were given, and it would appear probable that the refusal to recommend him for long service increments was based on a combination of these reasons.  The Applicant was formally notified that payment of long service increments was being deferred and that his case would be reviewed in October, 1996 by a letter of 
27th November, 1995 from Mr. Kevin O'Connor, a personnel officer.  On the same day the Applicant formally notified Mr. Early that he was invoking the grievance procedures as set out in circular 1/92 and asked for reasons why he was not being recommended.  On 
13th December, 1995 Mr. Early wrote to the Applicant setting out three reasons why he intended to defer payment of the long service increments.  This letter was in fact the start of the grievance procedure.

THE GRIEVANCE PROCEDURE
		The grievance procedure is set out in circular 1/92 dated 
3rd February, 1992 was based on an agreed recommendation by the General Council under the scheme of conciliation and arbitration for the Civil Service on the improvement of formal procedures for dealing with grievance and disciplinary problems.  The appendix setting out the procedure states:-

	"Claims affecting individual officers are, in general, excluded from the scope of the conciliation and arbitration scheme.  In the event, therefore, of an individual officer or group of officers having a complaint affecting their official position which is not appropriate for discussion under the conciliation and arbitration scheme, and in order that such a complaint can be dealt with promptly and satisfactorily, the procedures set out below shall be followed."

	The document then sets out seven stages to be followed, commencing with a discussion between the complainant and his/her appropriate superior, leading on to more formal contacts, and ultimately a written reference by the complainant to the personnel section followed by the decision of management on the complaint and the reasons for the decision being conveyed in writing to the complainant.  All these stages have been gone through in the present case, and I do not need to set them out in detail.  The complaint procedure then provides for stage VIII under the following terms:-
	"Stage VIII.  A complainant who is dissatisfied with the decision of management on the complaint may make a written request to the personnel officer that the dispute be referred to a mediation officer appointed by the Minister for Finance with the agreement of the General Council staff panel.  Any such request shall be dealt with on the following basis;
	(a)	Complaints concerning the following shall not be referred to the mediation officer;
		- 	disciplinary action taken in accordance with the provisions of the 	 		disciplinary code;
		- 	selection for promotion, whether by way of competition or normal  			course promotion, or selection for assignment to a post carrying an 			allowance;
		- 	exclusion from competitions or from consideration for promotion 	on grounds of health or sick leave record;
		- 	the interpretation of general regulations, circulars or agreed 				reports of General Council or departmental councils.
	(b)	Subject to (a) above, the personnel officer shall not refuse to refer a complaint to the mediation officer where the complainant has suffered an immediate and direct loss of earnings as a consequence of the action complained of.
	(c)	In any other case the complaint shall be referred to the mediation officer if the personnel officer considers the matter appropriate for such reference."

THE POSITION OF THE PARTIES
	The Applicant claims that he is being wrongfully refused the long service increments, and that having proceeded through the first seven stages of the grievance procedure, the Respondent must now refer the complaint to the mediation officer because the Applicant is in the situation where he has suffered an immediate and direct loss of earnings as a consequence of the refusal to grant him the increments, which is the action complained of.  
	The Respondent counters that this right to have a complaint referred does not arise, as paragraph (b) is subject to paragraph (a), and in particular the Respondent contends that the dispute between the parties involves the interpretation of general regulations, circulars or agreed reports of General Council or Departmental Councils.  The Respondent further argues that, in any event, the Applicant has not suffered any immediate or direct loss of earnings as a consequence of the Respondents' actions.

IS THERE A QUESTION OF INTERPRETATION?
	It does seem that at the early stages of the dispute between the parties, the Applicant found it very difficult to accept that there was an onus on him to show his entitlement to an increment.  However, it is now fully accepted by the Applicant that there is such an onus, and accordingly there is no question of interpreting that part of circular 9/87.  The dispute between the parties now, which it is sought to refer to the mediation officer, is a dispute as to the Applicant's claim to long service increments.  There is no dispute as to the regulations governing the Applicant's right to such increments.  What is in dispute is the application of those regulations to the particular facts of the Applicant's case.  Basically, the Applicant has been arguing throughout that his performance of his duties merited the increments being paid, while the Respondents have argued that his performance was unsatisfactory.  In my view no element of the dispute which it is sought to refer concerns any interpretation of Circular 9/87.
	It is also suggested by the Applicant that there may be a question of interpretation of the grievance procedure itself.  In particular, it is argued that the question of whether that Applicant has suffered an immediate and direct loss of earnings is a question of interpretation.  In so far as this is a dispute which involves an interpretation of the grievance procedures it is not a dispute which is going to be referred to the mediator, it is a dispute which I have to determine.  Paragraph (a) of the Stage VIII procedure only prohibits the reference to a mediator of a dispute as to interpretation which he has to determine.  
	Finally, an argument has been made in Court, although it was not made at any earlier stage, including in the written submissions on behalf of the Respondents, that under Section 17(1)(b) of the Civil Service Regulation Act, 1956 it is provided that the Minister for Finance shall be responsible for, inter alia, remuneration of civil servants.  The argument appears to be made that the mediator will have to interpret the circulars to decide whether he has jurisdiction because of the provisions of this Section.  In my view this argument has no merits whatever.  The grievance procedure was set up by the Minister for Finance, as were the procedures for the granting of increments.  The Minister, therefore, expressly approved this procedure as a method of resolving disputes as to remuneration, among other things.  The Respondents cannot be heard to argue that this dispute cannot be referred to a mediator because that would be a breach of Section 17(1)(b) when in fact the Minister has set up the grievance procedure, including an express provision in relation to Stage VIII that it is mandatory to refer matters to the arbitrator which involve an immediate and direct loss of earnings, in other words which involve the remuneration of the Complainant.
	In any event, this point was never made until the oral hearing, and in particular is not made in the Statement of Grounds of Opposition.  
	In my view, therefore, the dispute which it is sought to refer to the mediator does not involve any question of interpretation.

HAS THE COMPLAINANT SUFFERED AN IMMEDIATE AND DIRECT LOSS OF EARNINGS?
	This question does require an interpretation of paragraph (b) of Stage VIII by me.  I think I must first consider the meaning and application of the phrase "as a consequence of the action complained of".  The action complained of in this case is the refusal of the Respondent to sanction increments for the Applicant and the decision of the Respondents to defer consideration of the Applicant's claim to increments.  Under 
Circular 9/87 such a decision cannot be made unless a certificate of satisfactory service cannot be given, and of course the real argument between the parties is whether such a certificate ought to have been given, and that is the real point which the mediator would be asked to determined.  The deferral follows as a natural consequence of the refusal to give the certificate.  In my view, therefore, the action complained of constitutes both the refusal to give the certificate and the deferral.
	The next point to consider is whether, as a consequence of this, the Applicant suffered an immediate and direct loss of earnings.  This involves a consideration of the meaning of the word "earnings".  Under the procedures set out in relation to increments, the Applicant is not entitled as of right to an increment.  On the other hand, I think it is clear from Circular 9/87 that the Applicant is entitled as of right if he can show that his performance during the year merits the increment.  This, of course, is the issue which it is sought to refer to mediation.  If the Applicant is entitled to the increment, then, under Paragraph 2 of Circular 9/87, it is "an increase in pay for which provision is made in a pay scale".  It is not a bonus, it is not an ex gratia payment, it is a payment which is part of the officer's pay scale, and therefore is part of his remuneration, and I think must be considered to be "earnings".
	Finally, and perhaps the most difficult point to consider, is whether there has been an immediate and direct loss of this increment as a consequence of the refusal to certify satisfactory performance.  There is, of course, only such a  loss if the Applicant is entitled to the increment.  If he is not entitled to it, then he will not have suffered any loss.  Obviously, this is the issue which the mediator would have to decide, and I certainly cannot anticipate that he would decide that the Applicant was entitled to the increments.  I have no doubt that, should the Applicant succeed eventually, then he will have suffered an immediate and direct loss of earnings, and even if the increment was backdated, he will have suffered the loss in the interim.  The problem is whether it can be said that there is an immediate and direct loss without knowing the outcome of the ultimate mediation.
	I think that conundrum can be solved by looking at the entire phrase "an immediate and direct loss of earnings as a consequence of the action complained of".  The action complained of is the refusal to certify satisfactory performance and the deferral of any decision as to the right to an increment.  That is the action complained of, whether the complaint is correct or not.  The consequence of this action is that the Applicant has not been paid the increment, and if he has not been paid the increment, then I think that it must follow that he has suffered and immediate and direct loss of earnings.  
	Accordingly, under paragraph (b) of the Provisions of the Grievance Procedures in relation to Stage VIII, the Respondent is not entitled to refuse to refer the complaint to the mediation officer, and his refusal to do so should be quashed.