DWT0043

FULL RECOMMENDATION WTC/00/59 DETERMINATIONNO.DWT0043 (WT2095/00/GF) SECTION 28(1), ORGANISATION OF WORKING TIME ACT, 1997 PARTIES : WOLF SECURITY - AND - MR JOHN O DONNELL DIVISION : Chairman: Mr Duffy Employer Member: Mr Pierce Worker Member: Mr. Somers

SUBJECT:
1. Appeal against Rights Commissioner's Decision WT2095/00/GF.


BACKGROUND:

2. The Court heard the above appeal in Waterford on the 6th of December, 2000.

DETERMINATION:

The claimant made a complaint to a Rights Commissioner alleging that his employer failed to provide him with paid annual leave or public holidays throughout his period of employment from 12^thJanuary 1996 to 24^thJuly 2000. A hearing to investigate the complaint was held by a Rights Commissioner on 28^thSeptember 2000 which the Claimant failed to attend. On being told by the employer that the claimant had received his full holiday entitlements the Rights Commissioner dismissed the complaint. The Claimant appealed that decision to the Court.

The employer told the Court that he operated a system whereby employees were given a choice between two methods of receiving holiday pay. They could accept a standard rate per hour and receive holiday pay at the time of taking holidays, or they could opt for an enhanced rate consisting of an additional 50p per hour representing the equivalent of statutory holiday pay. The claimant had signed a contract with the employer to accept the enhanced rate. This contract provides in relevant part as follows:

• 
  "Should an employee wish to forego all claims for holiday pay he or she will be paid an hourly rate of £4.30 per hour."
  

The employer claimed that this arrangement complied fully with the Act, since all payments were made in advance and the amount received by the employee over the year is equal to or in excess of the amount due in respect of all holidays including Public Holidays. The employer told the Court that all employees of the firm opted for this arrangement. The employer accepted that the Claimant never in fact took holidays during his period of employment but did have breaks consisting of lay-offs between contracts.

The Claimant said that he failed to attend the Rights Commissioner hearing due to a mistake on his part as to the date of the hearing.

The claimant told the Court that that he signed the contract in question some eighteen months after he commenced in the employment. He said that these contracts were introduced after some employees sought payments for holidays and employees were given no choice in the matter. They could either sign the document or lose their jobs. The claimant told the Court that at the time he signed the contract he was already on the higher rate and did not receive any increase in pay.

Conclusions.

The Organisation of Working Time Act, 1997 (the Act) was enacted to transpose into National Law, European Council Directive 93/104/EC concerning certain aspects of the organisation of working time. Article 1 of the Directive defines its purpose as stipulating the minimum safety and health requirements for the organisation of working time.
Article 7 of the Directive provides as follows:

1. Member States shall take the measures necessary to ensure that every worker is entitled to paid leave of a least four weeks in accordance with the conditions for entitlement to, and granting of, such leave laid down by national legislation and/or practice.

2. The minimum period of paid leave may not be replaced by an allowance in lieu, except where the employment relationship is terminated.

The clear purpose of Article 7 of the Directive is to ensure that workers receive the minimum periods of leave which are consistent with the safety and health requirements of the organisation of working time. Thus, the fundamental obligation on an employer is to provide the minimum period of leave, for which the employee must be paid at his/her normal rate. This is clear from the provision at Article 7(2), which normally prohibits the payment of an allowance in lieu of granting the minimum leave.

Part 111 of the Act gives effect to Article 7 of the Directive. Section 37 of the Act gives effect to Article 7(2) and provides as follows:

• "Save as expressly provided otherwise in this Act, a provision in an agreement (whether a contract of employment or not and whether made before or after the commencement of the of this Act) shall be void in so far as it purports to exclude or limit the application of, or is inconsistent with any provision of this Act."
  

It is settled law that a provision in National Legislation intended to fulfil an obligation under a Directive must be interpreted and applied so as to achieve the result envisaged by the Directive. By the application of that principle, the primary obligation on an employer under the Act is to provide employees with the leave specified therein and parties cannot contract out of that obligation. Furthermore, in the Court's view, any agreement or arrangement, the likely practical effect of which is that employees will not take holidays, is inconsistent with the result envisaged by the Directive, which is to protect the health and safety of workers, and must be regarded as inconsistent with the Act.

Time Limit.

Section 27(4) of the Act provides that a complaint cannot be entertained by a Rights Commissioner (and by extension, the Court) if it is made more than six months after the date of the contravention of the Act to which it relates. Section 27(5) provides that this limitation period may be extended by a further twelve months where the delay is due to reasonable cause. The present complaint was referred to a Rights Commissioner on 21^stAugust 2000. It relates to non-compliance with the relevant provisions in each leave year since the commencement of the claimant's employment in January 1996.

The Court considers that reasonable cause exists to extend the limitation period in accordance with Section 27(5) of the Act. On that basis the only complaints which the Court can entertain are those relating to the holidays due to the claimant in the eighteen months prior to 21^stAugust 2000.

For the reasons that follow, the Court is satisfied that the Claimant's complaints are well founded:

The contract in issue was signed by the claimant some eighteen months after he commenced employment and at a time when the employer was already pursing a policy of not providing paid holidays. He did not receive any increase in pay which could be regarded as being in consideration of holidays.

The claimant never received holidays and, therefore, no element of his pay could be properly regarded as pay for holidays.

It is noted that the relevant clause in the agreement expressly provides that the higher hourly rate is in consideration of the employee forgoing all claims for holiday pay. In so far as this purports to provide that an element in the Claimant's pay was in lieu of his entitlement to holidays, it is to that extent void by operation of Section 37 of the Act and Article 7(2) of the Directive.

The arrangement in issue (even if the Court accepted, which it does not, that an element in the Claimant's ongoing pay was intended to cover holidays) has the inherent capacity to result in employees deciding for economic reasons not to take holidays. This is indicated by the fact that the Claimant never took holidays over a four and a half year period. This defeats one of the health and safety imperatives of the Directive and is inconsistent with the result which the Directive was intended to achieve. On that account also it must be regarded as inconsistent with the Act.

Order.

Having decided that the complaint is well founded the claimant's appeal is allowed. The Court considers that compensation pursuant to Section 27(3)(c) of the Act is the appropriate form of redress. The Court measures the compensation due to the Claimant herein at £1,500 and makes an order in his favour in that amount.



Signed on behalf of the Labour Court



Kevin Duffy
20th December, 2000______________________
FB/CCDeputy Chairman



NOTE

Enquiries concerning this Determination should be addressed to Fran Brennan, Court Secretary.