FULL RECOMMENDATION
SECTION 28(1), ORGANISATION OF WORKING TIME ACT, 1997 PARTIES : GROUP 4 SECURITAS IRELAND LTD. (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - MR PAT LYNCH (REPRESENTED BY SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION) DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Carberry Worker Member: Ms Ni Mhurchu |
1. Appeal against Rights Commissioner's Decision WT5335/01/MR.
BACKGROUND:
2. The Company appealed the Rights Commissioner's decision to the Labour Court on the 1st of March, 2002, in accordance with Section 28(1) of the Organisation of Working Time Act, 1997. A Labour Court hearing took place on the 11th of September, 2002, in Limerick.
The following is the Court's determination.
DETERMINATION:
The complaint to which this appeal relates is that the employer failed to pay the claimant his full pay for annual leave for the Holiday Year 2000/2001 in breach of Section 20 (2) (b) of the Organisation of Working Time Act 1997 (The Act) and Statutory Instrument No 475 of 1997 Organisation of Working Time (Determination of Pay for Holidays) Regulations 1997.
The Union's position
The Union contends that the claimants normal working week is forty- eight hours. He works and has worked since he was employed four twelve hour shifts each week. He is paid a flat rate for each hour worked. Premium payments are only paid for hours worked in excess of 48. However, the claimants holiday pay is calculated on the basis of a flat 40 hour week.
The Union contends that the claimants normal weekly working hours as calculated in accordance with the provisions of paragraph 3 (2) of statutory instrument Number 475 of 1997 is forty-eight hours and therefore the Employee has been under paid holiday pay by a sum equivalent to eight hours per week.
The Employer's position
The employer claims that the Rights Commissioner erred in that he did not take cognisance of the hours contracted to be worked by the claimant, which the employer contends, are 40 hours per week. Furthermore it is the industry practice to grant holidays at 8 hours per day or 40 hours per working week. This practice is further enshrined in the Employment Regulation Order for the Security Industry, wherein it is accepted that the normal working week is 40 hours. In October, 2000, an agreement was reached on a composite rate of pay incorporating all overtime premia up to forty-eight hours.
When on a week's annual leave the claimant is paid this composite rate for 40 hours as is the practice in the Security Industry. The employer claims that this practice is justified by the provisions of Article 7.1 of the Working Time Directive (93/104/EEC) which provides as follows:-
"Member States shall take the measures necessary to ensure that every worker is entitled to paid annual leave of at least four weeks in accordance with the conditions for entitlement to and granting of such leave laid down by national legislation and/or practice."
The employer states that the use of the word practice in the context means the practice in the relevant industry.
The employer further contends that the employee gets paid breaks during his working week and these should be deducted when calculating the normal weekly number of hours worked.
The facts
It is an undisputed fact that the claimants normal working week is 48 hours and that he is paid an equal amount for each hour worked. He works four twelve hour shifts per week. Premium payments apply once 48 hours have been worked in any week. It is an accepted fact that the employer only pays the Employee for a forty hour week when he is on annual leave. It is an accepted fact that this is the practice in the Security Industry. It is an accepted fact that the claimant receives paid meal breaks.
The employer has contended that the word "practice" in article 7 (1) of the Directive is to be looked at in isolation and to be taken as applying to the practice in the Security Industry. The employer has further contended that paid meal breaks should be deducted when calculating the normal weekly working hours of the claimant which would then have the effect of reducing the claimants working hours to approximately forty hours per week.
The Law
The Working Time Directive (93/104/EEC), adopted by the Council of the European Union on 23 November 1993, lays down minimum requirements concerning certain aspects of the organisation of working time. The Directive was adopted as a health and safety measure on the basis of Article 118a of the EC Treaty under the qualified majority voting procedure. The relevant Article of the Directive is Article 7.1 which has already been quoted above. The directive was transposed into Irish Law by The Organisation of Working Time Act 1997. Sections 19 and 20 transpose into Irish Law the relevant provisions of the Directive in relation to holiday pay. The relevant section of the Organisation Working Time Act which applies to this case is section 20 (2) which provides as follows:-
(2) the pay in respect of an employee's annual leave shall-
(b) be at the normal weekly rate or, as the case may be, at a rate which is proportionate to the normal weekly rate.
Section 20 (4) provides as follows:
(4)in this section "normal weekly rate" means the normal weekly rate of the employee concerned's pay determined in accordance with regulations made by the Minister for purposes of this section.
By Statutory Instrument Number 475 of 1997 - Organisation of Working Time (Determination of Pay for Holidays) Regulations 1997 the Minister made regulations defining the normal weekly rate of pay.
The relevant provisions in the regulations is paragraph 3 (2) which provides as follows:
"If the employee concerned's pay is calculated wholly by reference to time rates or a fixed rate or salary or any other rate that does not vary in relation to the work done by him or her, the normal weekly rate of his or her pay, for the purposes of the relevant sections, shall be the sum (including any regular bonus or allowance the amount of which does not vary in relation to the work done by the employee but excluding any pay for overtime) that is paid in respect of the normal weekly working hours last worked by the employee before the annual leave (or portion thereof concerned) commences or, as the case maybe, the cesser of employment occurs."
Section 19 and 20 of the Act and Paragraph 3 (2) of the Regulations give effect to Article 7 of the Directive and must be interpreted so as to achieve the result envisaged by the Directive.
In the Court's view what is required by Article 7 of the Directive and by the Act, is that workers should receive annual leave paid at their normal weekly rate. The employers contend that the word "practice" in the Directive must be looked at in isolation. The Court cannot accept this contention. The Directive is quite clear. It states that paid annual leave should be granted in accordance with the conditions for entitlement laid down by national legislation and or practice. The Court is satisfied that Section 2 Article 7 of the Directive was a direction to the Member States to decide either to cater for annual leave arrangements within the national collective agreements or to transpose the Directive by means of legislation. By virtue of Article 18 Ireland has transposed the Directive by the adoption of the Organisation of Working Time, Act 1997. Therefore, thepracticewithin the industry must be compliant with the Act to abide by the provisions of the Directive and in this instance the Court is satisfied that is not the case.
If the Court were to accept the employers contention, it would mean that the legislation transposing the Directive could be ignored by any individual or group of employers who could then impose a practice on their employees. This could not be the result envisaged by the Directive.
The employers have contended again that meal breaks which are paid should be deducted when calculating the normal weekly pay. The Court cannot accept this contention. The normal weekly pay is the sum received by the employee for his or her week's work. If the employee is paid during a break, that is part of the employee's normal weekly pay.
In this case the Court is satisfied that a normal week's pay calculated by reference to Paragraph 3(2) of The Organisation of Working Time (Determination of Pay for Holidays) Regulations 1997 is 48 hours pay calculated at the composite rate of pay.
The Court concurs with the decision of the Rights Commissioner and rejects the employer's appeal. The claimant lodged his claim with the Rights Commissioner on the 12th July 2001. No claim has been made for an extension of time and therefore the year affected by this claim is the holiday year from 1st April 2000 to the 31st of March 2001. The employee is entitled to 32 hours pay at the composite rate in respect of that year. The rate to be applied is that paid to him at the time he took his annual leave. The Court has not been furnished with figures to allow it to calculate the relevant sum, but if the parties have difficulty in agreeing the sum to be paid, either of them may revert to the Court for assistance.
The Court so decides.
Signed on behalf of the Labour Court
Caroline Jenkinson
25th October, 2002______________________
HMCD/BR.Deputy Chairman
NOTE
Enquiries concerning this Determination should be addressed to Helena McDermott, Court Secretary.