EMPLOYMENT APPEALS TRIBUNAL
APPEAL OF: CASE NO.
EMPLOYEE– appellant PW538/2011
against the decision of the Rights Commissioner in the case of:
EMPLOYER - respondent
under
PAYMENT OF WAGES ACT, 1991
I certify that the Tribunal
(Division of Tribunal)
Chairman: Mr L. Ó Catháin
Members: Mr D. Hegarty
Mr O. Wills
heard this appeal at Cork on 10th July 2013
Representation
Appellant:
Respondent:
The determination of the Tribunal is as follows:
This case came before the Tribunal by way of an appeal by an employee of a Rights Commissioner’s Decision reference r-107791-pw-11/POB.
The appellant’s representative told the Tribunal that to comply with the provisions of Section 7 (2) of the Payment of Wages Act 1991 the appellant sent notice of her appeal to the former acting CEO of the respondent. The notice was not sent by registered post.
Appellant’s Case
The appellant gave evidence. In October 2010 she was informed that her wages would be cut by 8% effective from 31st October 2010. She immediately objected and proposed a reduction in hours while maintaining her hourly rate of pay. The respondent’s management refused to engage with her counter proposal saying that the cost-cutting measures had been discussed with employees on 22nd September 2010. The appellant had not attended that meeting because she was on lay-off at the time. The appellant was told that the pay cut had been negotiated with SIPTU but she was not a member of the union.
At the end of her probation the appellant requested a pay rise. Instead she was paid an annual bonus. Conditions attached to this payment but they were written to be achievable and to ensure that operational matters beyond the appellant’s control would not influence her bonus. The appellant’s bonus was not reviewed as part of the cost cutting exercise.
In January 2011 the appellant applied for a promotion but was not successful. She resigned on 28th February 2011 and her employment ceased on 21st March 2011. During her last year with the respondent the appellant was not paid a bonus for quarter 2 or quarter 4. When she contacted the respondent’s financial controller to ask about her unpaid bonus she received a cheque for €745.06 which she did not cash because she refused to be bound by the gagging order that went with it.
Respondent’s case
The financial controller gave evidence. The respondent received a grant from the local authority to enable it to survive but restructuring was required. 10 redundancies were implemented. Payroll was the major cost and without the pay cut the operation would not have been viable. A reduction in hours would not have been viable in the appellant’s area. There was no scope to cut hours. Everything was looked at in an effort to cut costs but wages had to be cut.
The appellant raised the issue of her bonus with the financial controller after she left. In the financial controller’s view the appellant was not due a bonus payment for Q2 because the operation was closed for 12 weeks and as a result the appellant was on lay off and collecting social welfare. The financial controller looked at the records and following the previous year’s calculations, he calculated her bonus for Q4 and sent her a cheque.
Determination
The Tribunal carefully considered the evidence adduced. The Tribunal is satisfied that S. 7 (2) of the Act was complied with and therefore that it had jurisdiction to hear the appeal. It was common case that the respondent was in such serious financial difficulty that it had no option but to cut costs. The appellant was unhappy with the reduction in her wages but she did not make a formal complaint while her employment lasted. Also the appellant had been employed in a management role and therefore in a position to appreciate the necessity for significant cost cuts.
The Tribunal finds that the appellant tacitly accepted the reduction in her wages despite her initial complaint and the rejection of her alternative proposals. The appeal for compensation for the appellant’s loss due to the reduction in her wages fails.
The Tribunal accepts the evidence of the financial director that the appellant is entitled to a payment in respect of her bonus. The appellant is awarded the sum of €745.06 under the Payment of Wages Act 1991 and the decision of the Rights Commissioner is varied.
Sealed with the Seal of the
Employment Appeals Tribunal
This ________________________
(Sgd.) ________________________
(CHAIRMAN)