PWD255

PARTIES:

DIVISION:

SUBJECT:

Appeal of Adjudication Officer Decision No's: ADJ-00044009 (CA-00054505-001)

BACKGROUND:

This is an appeal of an Adjudication Officer’s Decision made pursuant to the Payment of Wages Act, 1991. The appeal was heard by the Labour Court in accordance with Section 44 of the Workplace Relations Act, 2015. 

The following is the Court's Determination:

DECISION:

This is an appeal by Zenox Ltd against a Decision of an Adjudication Officer (ADJ-00044009) in relation to a claim by Conall Collins made under the Payment of Wages Act 1991 (“the Act”). The Adjudication Officer found that the complaint was well founded and ordered Zenox Ltd to pay Mr Collins the sum of €1,881.89.

In this Determination the parties are referred to as they were at first instance. Hence, Zenox Ltd is referred to as “the Respondent” and Conall Collins as “the Complainant”.  

Position of the Complainant

The Complainant commenced employment on 1 June 2020 and resigned his position on 16 December 2022.

The Complainant experienced consistent underpayment of wages over the course of his employment. Despite numerous attempts to address this matter with the Respondent, the shortfalls persisted, causing significant financial hardship. The ongoing breaches of his employment contract - including the failure to pay wages - created an untenable working environment and the Complainant was left with no option but to resign.

In the period from January to December 2022 the Complainant was entitled to a salary of €33,000 per annum (which equated to a net salary of €27,874.68 or 12 monthly payments of €2,322.89).

The Complainant’s wages were not paid in full or on time. Payments were made on an ad-hoc basis, with no calculations provided for any payments made. During 2022, he received the following payments: €1693.91 + €1693.91 + €1870.0 + €1700.0 + €550.0(cash) + €1100.0 + €4519.80 + €4500 + €498 + €1600 = €19,175.32.  The total shortfall amounted to €8,539.86.

The Complainant received a lump sum of €6,658.37 after submitting his complaint to the WRC.  He was left with a shortfall in wages of €1881.89.

In addition, the Complainant paid €875.00 to an employee for unpaid wages on 17 November 2022, as the Respondent indicated that he was unable to fully pay that employee’s wages.  The Complainant covered those wages on the understanding that he would be reimbursed in full. Furthermore, the Complainant paid €197.14 for two DHL shipments to the USA on 1 December 2022.  The cost of each shipment was €98.57. The Complainant’s decision to cover those costs personally reflects his commitment to the company. The respondent failed to honour an agreement to reimburse him.

The Complainant seeks payment of outstanding wages due of €1,881.89. The Complainant seeks reimbursement of €875.00 advanced to a colleague and €197.14 spent on company-related expenses. The Complainant seeks an award for constructive dismissal.

Position of the Respondent

The Complainant resigned his position on 16 December 2022 alleging non-payment of wages. The Respondent rejects the claim that an unlawful deduction was made from the Complainant’s wages. 

The Respondent had difficulty discharging the Complainant’s wages due to other staff members failing in their duties and causing the respondent a loss. The Respondent received a grant in respect of the complainants pay and his pay was discharged at different intervals. This led to a delay in discharging the wages due to the complainant. Whilst the Respondent acknowledges that the complainant had wages outstanding to him, these where ultimately discharged prior to the complainant making this claim.

The Respondent submits documentary evidence in relation to the full discharge of wages to the complainant. Payslips show that the complainant earned wages totalling €13,300.65.  During this period the complainant received a total of €13,406.37. The complainant acknowledged that he also received a payment of €550 in cash from the respondent during this period.

During the reference period the complainant received all wages owed to him in full.

The Applicable Law

Section 1 of the Payment of Wages Act 1991 provides in part as follows:

“wages”, in relation to an employee, means any sums payable to the employee by the employer in connection with his employment, including—

(a) any fee, bonus or commission, or any holiday, sick or maternity pay, or any other emolument, referable to his employment, whether payable under his contract of employment or otherwise, and

(b) any sum payable to the employee upon the termination by the employer of his contract of employment without his having given to the employee the appropriate prior notice of the termination, being a sum paid in lieu of the giving of such notice:

Provided however that the following payments shall not be regarded as wages for the purposes of this definition:

(i) any payment in respect of expenses incurred by the employee in carrying out his employment,

(ii) any payment by way of a pension, allowance or gratuity in connection with the death, or the retirement or resignation from his employment, of the employee or as compensation for loss of office,

(iii) any payment referable to the employee's redundancy,

(iv) any payment to the employee otherwise than in his capacity as an employee,

(v) any payment in kind or benefit in kind.

Section 5 of the Payment of Wages Act 1991 provides in part as follows:

(1) An employer shall not make a deduction from the wages of an employee (or receive any payment from an employee) unless–

(a) the deduction (or payment) is required or authorised to be made by virtue of any statute or any instrument made under statute,

(b) the deduction (or payment) is required or authorised to be made by virtue of a term of the employee's contract of employment included in the contract before, and in force at the time of, the deduction or payment, or

(c) in the case of a deduction, the employee has given his prior consent in writing to it.

(6) Where—

(a) the total amount of any wages that are paid on any occasion by an employer to an employee is less than the total amount of wages that is properly payable by him to the employee on that occasion (after making any deductions therefrom that fall to be made and are in accordance with this Act), or

(b) none of the wages that are properly payable to an employee by an employer on any occasion (after making any such deductions as aforesaid) are paid to the employee,

then, except in so far as the deficiency or non-payment is attributable to an error of computation, the amount of the deficiency or non-payment shall be treated as a deduction made by the employer from the wages of the employee on the occasion.

Section 41(6) of the Workplace Relations Act 2015 specifies that:

“Subject to subsection (8), an adjudication officer shall not entertain a complaint referred to him or her under this section if it has been presented to the Director General after the expiration of the period of 6 months beginning on the date of the contravention to which the complaint relates”.

Deliberations

The Complainant seeks payment of outstanding monies that he contends are owed to him by the Respondent. He also seeks an award for constructive dismissal. As explained to the Complainant at the hearing, the Court has no jurisdiction under the Payment of Wages Act to consider a complaint relating to constructive dismissal

To ground a claim under the Payment of Wages Act 1991 the Court needs in the first instance to ascertain what wages are properly payable during the relevant period. Having established that the Court then needs to ascertain whether there was a shortfall in the proper payment and, if that was the case, whether the shortfall arose for one of the reasons set out in section 5(1) above.

What timeframe is encompassed by the claim?

The Complainant seeks reimbursement of an alleged shortfall in wages for the period from January to December 2022. Section 41(6) of the Workplace Relations Act 2015 provides that a complaint should be presented within the period of six months beginning on the date of the contravention to which the complaint relates.

As the Complainant lodged his complaint to the WRC on 16 January 2023, the Court’s jurisdiction is confined to assessing alleged contraventions of the Act that occurred in the six-month period prior to that date, which encompasses the period from 17 July 2022 to 16 January 2023.

The Court has no jurisdiction to assess alleged contraventions that occurred prior to 17 July 2022.

Reimbursement of Expenses

As part of his claim, the Complainant seeks reimbursement of €875.00 which he advanced to a work colleague for his wages and a further sum of €197.14 that he says that he spent on courier expenses.

Payments in respects of expenses incurred by an employee during their employment are not regarded as wages for the purposes of the Act. As a result, any payments made by the Complainant to another employee and to a courier company, on behalf of the Respondent, do not fall within the definition of wages under the Act.

As a result, the Court has no jurisdiction to consider those elements of his complaints.

What Amount is Properly Payable during the relevant period encompassed by the claim?

The Complainant was contractually entitled to receive a salary of €33,000 per annum, which equated to a monthly payment of €2750 (gross) or €2322.09 (net). 

The Complainant’s contract of employment states that his salary was payable monthly in arrears by credit transfer as detailed on his pay statement. The relevant period under consideration encompasses six separate pay periods from July to December 2022.

The Court finds that the Complainant had a contractual entitlement to €2322.09 net for each of the five pay periods that fell in July, August, September, October and November 2022. 

The Complainant resigned his position on 16 December 2022. While the Complainant contends that he is entitled to full months’ pay for December 2022, the Respondent contends that he is entitled to a pro-rata payment of €1690 nett as he did not work for the full month.

As the Complainant did not work for the Respondent after 16 December 2022, the Court finds that the amount properly payable to him for the month of December 2022, having regard to the undisputed information provided, was a pro-rata payment of €1690 nett.

The total amount properly payable to the Complainant during the relevant period that falls within the Court’s jurisdiction to be €13,300.45 (comprising five monthly payments of €2322.09 + €1690).

Was there a shortfall in the amount payable?

The Court must assess whether a contravention of the Act occurred in each of the six pay periods falling within the relevant period.

The Court heard that the Complainant was issued with a monthly payslip on the last Friday of each calendar month. The Respondent provided the Court with copies of the payslips issued to him for the six pay periods encompassed by the complaint. Each payslip detailed the gross and nett payments due to the Complainant that month, together with relevant PAYE, USC and PRSI deductions.

It is accepted that the amounts detailed on each payslip bore no relation to any payments made to the Complainant. Replying to questions from the Court, the Respondent accepted that payments made to the Complainant were irregular and unorthodox and not linked to any amounts stated on his payslips.

The Respondent submitted a schedule of ad hoc payments made to the Complainant in the period from 16 July 2022 to 23 January 2023. No information or breakdown of how any of the payments were calculated were shared with the Complainant or submitted to the Court. The parties disagreed what payments related to what pay periods.

Examining each of the six pay periods the Court found as follows:

Pay period - July 2022

The amount properly payable to the Complainant for the July 2022 pay period was €2322.09.  The Complainant received three payments in July 2022 as follows: 18 July (€550), 19 July (€1,100) and 28 July (€4,519.80). The Complainant contends that payments received in July 2022 related to unpaid wages owing to him that had accrued in the period predating the cognisable period for the within complaint.  The Respondent contends the July payments covers all wages due.

The Court has no jurisdiction to assess alleged contraventions that predate the cognisable period for the complaint.  Based on the facts presented, the finds that Complainant did not suffer a shortfall in wages for the July 2022 pay period. 

Pay period - August 2022

The amount properly payable to the Complainant for the August 2022 pay period was €2322.09.

It is accepted that the Complainant received no payment in August 2022.

Accordingly, the Court finds that the Complainant suffered a deduction in wages for the month of August 2022 of €2322.09. 

Pay period - September 2022

The amount properly payable to the Complainant for the September 2022 pay period was €2322.09.

It is accepted that the Complainant received no payment in September 2022. 

Accordingly, the Court finds that the Complainant suffered a deduction in wages for the month of September 2022 of €2322.09. 

Pay period – October 2022

The amount properly payable to the Complainant for the October 2022 pay period was €2322.09.  It is accepted that the Complainant received no payment in October 2022.

Accordingly, the Court finds that the Complainant suffered a deduction in wages for the month of October 2022 of €2322.09. 

Pay Period – November 2022

The amount properly payable to the Complainant for the November 2022 pay period was €2322.09.

The Complainant received three payments in November 2022 as follows: 1 November (€150), 3 November (€4,500) and 25 November (€498).

Based on the facts presented, the finds that Complainant did not suffer a deduction in wages for the pay period relating to November 2022.

Pay Period – December 2022

The amount properly payable to the Complainant for the December 2022 pay period was €1690.20.

The Complainant received a payment of €1600 on 9 December 2022.

Accordingly, the Court finds that the Complainant suffered a deduction in wages for month of December 2022 of €90.20. 

Were the deductions required or authorised within the meaning of section 5(1)(a) of the Payment of Wages Act 1991?

Having determined that the Complainant suffered a shortfall in wages in August, September, October and December 2022 the Court must consider whether the Respondent was allowed to make a deduction to the Complainant’s wages, having regard to section 5 of the Act.

The Act at Section 5 prohibits an employer from making a deduction from wages that are properly payable to an employee unless the deduction (a) is required or authorised to be made by virtue of any statute, (b) is required or authorised to be made by virtue of a term of the employee's contract of employment or (c) the employee has given his prior consent in writing to it.

No submission was made to the Court to say that the Respondent was required or authorised to make a deduction from the wages properly payable to the Complainant by virtue of any statute.

The Respondent contends there he was reliant on a grant to pay the Complainant and that there was an agreement between the parties that the payment intervals specified in the Complainant’s contract of employment could be varied to allow for wages to be paid to the Complainant at different unspecified intervals.  The Complainant disputed that any arrangement was entered into such that the Respondent could depart from the payment intervals specified in the Complainant’s contract of employment.

No evidence was put to the Court, documentary or otherwise, to support the assertion that the parties had entered into an agreement to vary the payments terms or payment schedule set out in the Complainant’s contract of employment. 

As the shortfall in the wages identified during the cognisable period for the within complaints were not (i) required or authorised by statute, (ii) the result of a contractual term in the Complainant’s employment, or (iii) made by virtue of agreement in writing where the Complainant consented to deductions, the Respondent cannot rely on Section 5(1) of the Act to say that the deductions made from the Complainant’s salary were lawful. 

Finding

The Court determines that an unlawful deduction from the Complainants wages occurred in August, September, October and December 2022. A result the Court finds that these aspects of the complaint are well founded.

Redress 

The Act as section 6 states provides that the Court can direct an employer to pay to the employee compensation of such amount (if any) as it considers reasonable in the circumstances not exceeding—

“(a) the net amount of the wages, or tip or gratuity as the case may be (after the making of any lawful deduction therefrom) that—

(i) in case the complaint related to a deduction, would have been paid to the employee in respect of the week immediately preceding the date of the deduction if the deduction had not been made, or

(ii) in case the complaint related to a payment, were paid to the employee in respect of the week immediately preceding the date of payment,

or

(b) if the amount of the deduction or payment is greater than the amount referred to in paragraph (a), twice the former amount.”

In this case, the Complainant suffered a deduction in wages during four pay periods that fell within the cognisable period for the within complaint.

The total shortfall in wages during that period was €7,056.41, which comprises the following monthly shortfalls: August 2022 (€2322.09), September 2022 (€2322.09), October 2022 (€2322.09) and December 2022 (€90.20).

It is open to the Court to award an amount in compensation for each of the contraventions of the Act that occurred during the cognisable period.

The Respondent accepts that the Complainant had wages owing to him but submits that all payments were ultimately discharged prior to the Complainant making his claim to the WRC.

The Complainant accepts that he received a payment of €6,658.37 on 20 January 2022 after he lodged the within complaint to the WRC, however his position is that no breakdown of calculations was provided to him to explain that payment and €1881.89 in unpaid wages remains outstanding.

In light of the lack of evidence presented by the Respondent to explain any payments made to the Complainant, the Court accepts the Complainant’s submission that he is owed outstanding wages amounting to €1881.89.

An employee is entitled to receive the wages properly payable to him in line with the terms set out in his contract of employment.  In this case, the ad hoc nature of payments made to the Complainant and the failure by the Respondent to pay him any monies at all for months on end was a breach of his contractual entitlement and caused him significant financial hardship.

Having regard to the submissions made and the facts presented, the Court directs the Respondent to pay the Complainant the sum of €3,763.78 (i.e. €1881.89 x 2) which it considers to be reasonable having regard to all the circumstances of this case.

Decision

The Court determines that the Respondent made an unlawful deduction from the Complainant’s wages in four pay periods falling within the cognisable.

The complaints relating to contraventions of the Act in August, September, October and December 2022 are well founded.

The Court directs the Respondent to pay the Complainant the sum of €3,763.78 by way of compensation.

The decision of the Adjudication Officer is varied accordingly. 

The Court so Determines.

	Signed on behalf of the Labour Court
	Katie Connolly
CC	______________________
3rd March 2025	Deputy Chairman

NOTE

Enquiries concerning this Decision should be addressed to Ceola Cronin, Court Secretary.