FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 27(1), NATIONAL MINIMUM WAGE ACT, 2000 PARTIES : O' LEARY INTERNATIONAL LIMITED (REPRESENTED BY PENINSULA BUSINESS SERVICES IRELAND LIMITED) - AND - VOLDEMARAS RAKAUSKAS (REPRESENTED BY RICHARD GROGAN & ASSOCIATES) DIVISION : Chairman: Mr Duffy Employer Member: Ms Doyle Worker Member: Ms Tanham |
1. Appeal of Rights Commissioner's Decision r-125145-mw-12/MMG.
BACKGROUND:
2. The Claimant appealed the Rights Commissioner's Decision to the Labour Court on 9th January, 2013. The following is the Labour Court's Decision:
DETERMINATION:
Background
This is an appeal by Voldemaras Rakauskas against a decision of a Rights Commissioner in his claim against O’Leary International Limited under the National Minimum Wage Act 2000.
In this Determination Mr Rakauskas is referred to as the Claimant and O’Leary International Limited is referred to as the Respondent. This claim was conjoined with a number of similar claims made under the Act by current or former employees of the Respondent all of which were heard together. The Claimant and many of those associated with the other claims referred to also brought appeals under the Organisation of Woking Time Act 1997. All of these claims were heard together by the Court.
The Rights Commissioner found that the Claimant’s complaint was not well founded for reasons that were not fully explained. Consequently no assistance could be obtained in addressing the points at issue in these cases from the decision of the Rights Commissioner.
Facts
At all times material to his claim the Claimant was employed as long distance truck drivers. He worked out of the Respondent’s premises in New Ross Co. Wexford and he was required to undertake the duties of his employment in various countries in Great Britain and mainland Europe. He was paid a daily rate of €60.55, or €302.75 per week. He also received additional payments by way of subsistence allowance which are not reckonable for the purpose of determining if he received the national minimum rate of pay. A central issue in the case concerns the number of hours per week to which the weekly rate of €302.55 applied.
The Law
These claims must be considered by application of various provisions of the Act of 2000. That Act was enacted to establish a national minimum rate of pay which is expressed in terms of a rate applicable to every hour worked. Where a rate of pay is fixed by reference to a period of time other than per hour (as in this case a rate per day) in determining if the Act is complied with it is first necessary to establish the number of hours to which the payments relate. This is determined in accordance with s.8 of the Act of 2000. It provides: -
- 8.—(1) For the purpose of determining under this Act whether an employee is being paid not less than the minimum hourly rate of pay to which he or she is entitled in accordance with this Act, but subject tosection 9, “working hours”, in relation to an employee in a pay reference period, means—
- (a) the hours (including a part of an hour) of work of the employee as determined in accordance with—
- (i) his or her contract of employment,
(ii) any collective agreement that relates to the employee,
(iii) any Registered Employment Agreement that relates to the employee,
(iv) any Employment Regulation Order that relates to the employee,
(v) any statement provided by the employee's employer to the employee in accordance withsection 3(1) of theTerms of Employment (Information) Act, 1994,
(vi) any notification by the employee's employer to the employee undersection 17of theOrganisation of Working Time Act, 1997,
(vii)section 18of theOrganisation of Working Time Act, 1997, or
(viii) any other agreement made between the employee and his or her employer or their representatives that includes a provision in relation to hours of work,
(b) the total hours during which the employee carries out or performs the activities of his or her work at the employee's place of employment or is required by his or her employer to be available for work there and is paid as if the employee is carrying out or performing the activities of his or her work,
whichever, in any case, is the greater number of hours of work. - (i) his or her contract of employment,
(2) “Working hours” under this section shall include—- (a) overtime,
(b) time spent travelling on official business, and
(c) time spent on training or on a training course or course of study authorised by the employer, within the workplace or elsewhere, during normal working hours,
but shall not include—- (i) time spent on standby or on call at a place other than a place of work or training provided by or on behalf of the employer for whom the employee is on standby or on call,
(ii) time spent absent from work on annual leave, sick leave, protective leave, adoptive leave, parental leave, while laid-off, on strike or on “lock-out”, or time for which the employee is paid in lieu of notice, or
(iii) time spent on travelling between an employee's place of residence and place of work and back.
- (i) time spent on standby or on call at a place other than a place of work or training provided by or on behalf of the employer for whom the employee is on standby or on call,
- (a) the hours (including a part of an hour) of work of the employee as determined in accordance with—
It seems clear that the effect of subsection (1)(a) of this section is to provide that the working hours of an employee, for the purposes of determining if the Act has been complied with, are the hours during which he or she is contractually obliged to be available to his or her employer. Paragraph (b) of subsection (1) deal with a situation where no working hours are specified by one of the instruments referred to in paragraph (a) of the subsection or where the actual hours worked are different to those determined in accordance with paragraph (a). Significantly, where there is a difference in working hours as determined in accordance with paragraph (a) as compared to those determined in accordance with paragraph (b), whichever mode of determination produces the greater number of hours is to be used.
The net effect of this provision is that where an employee’s hours of work are determined in accordance with paragraph (a) and they work additional hours during a reference period the applicable hours should be calculated in accordance with paragraph (b). Conversely, where an employee actually works less hours in a reference period than those determined in accordance with paragraph (a), his or her working hours for the purpose of the section are nonetheless determined by reference to paragraph (a).
A reference period, for the purpose of the Act, is determined in accordance with s.10. This provides that 'an employer shall select as a pay reference period for the purposes of this Act a period not exceeding one calendar month'.
The effect of this provision is that where the amount per hour varies, it can be averaged over the prescribed reference period. This is of little practical relevance in the instant case. As will be seen from what follows, the Claimant receive the same rate and had the same contractual working hours at all times.
Application to the instant case
In this case the Claimant was furnished with a statement of the main terms and conditions of his employment pursuant to S.3(1) of the Terms of Employment (Information) Act 1991. The statement recites the following under the heading ‘Hours of Work’: -
- Your normal hours of work will be in accordance with the European Committee Driving Hours Regulations, Friday to Thursday. You will be expected to stay overnight on a regular basis in your vehicle. You will receive breaks that are in line with the European Committee Driving Hours Regulations.
- Your take home pay is currently €100 per day payable weekly by credit transfer as detailed on your pay statement. The above rate of pay includes a daily allowance which is payable in line with the European Committee Driving Hours Regulations and Revenue. The allowance is only paid on days worked.
It is agreed between the parties that the actual rate of pay was €60.55 per day with the remaining amount being a daily subsistence allowance which is non-reckonable for present purposes.
With regard to working hours, the contractual obligation of the Claimant was to be available to the Respondent for such hours as are permitted by the ‘European Committee Driving Hours Regulations’. The import of this expression is unclear. The Court was, however, informed by the Respondent that it is intended to refer to Regulation (EC) 561/2006, commonly referred to as EU Rules on Driving Hours. It follows that the Claimant was contractually required to be available to drive for the maximum number of hours permitted by that Regulation. It is also clear from the Claimant’s contract of employment read as a whole that the specified rate of €60.55 per day was intended to remunerate him for the hours in respect of which he was contractually required to be available to work.
Regulation (EC) 561/2006
Article 6(3) of Regulation (EC) 561/2006 provides that the total accumulated driving time of a Driver to whom the Regulation relates shall not exceed 90 hours in any two consecutive weeks. However, this Regulation also imports the maximum working hours prescribed by Directive 2002/15/EC, namely 48 per week (Recital (2) and Article 6(2) thereof). Hence, even if the Claimant did not in fact actually undertake work for the maximum permissible period provided for by the Regulation, in the absence of any other contractual term concerning working hours,he was contractually obliged under his contracts of employment to be available for work over that period. In these circumstances it is reasonable to conclude that the Claimant’s daily rate of pay, namely, €60.55, was intended to cover the hours that he was expected to be at the place of his employment (in this instance in or with their truck in whatever country to which he was directed by the Respondent) and available to undertake the duties of his employment. This, in the opinion of the Court, necessarily arises from the combined effect of the contractual terms referred to above and the application of s.8 of the Act to those contractual terms.
Records
Section 22 of the Act provides: -
- 22.(1)—An employer shall keep, at the premises or place where his or her employee works or, if the employee works at 2 or more premises or places, the premises or place from which the activities that the employee is employed to carry on are principally directed or controlled, such records as are necessary to show whether this Act is being complied with in relation to the employee and, subject tosection 23(5), those records shall be retained by the employer for at least 3 years from the date of their making.
(2) An employer who, without reasonable cause, fails to comply with subsection (1) shall be guilty of an offence and be liable on summary conviction to a fine not exceeding £1,500.
(3) Without prejudice to subsection (2), where an employer fails to keep records under subsection (1) in respect of his or her compliance with a particular provision of this Act in relation to an employee, the onus of proving, in proceedings before a rights commissioner or the Labour Court, that the provision was complied with lies on the employer.
Subsection (1) of this section obligates an employer to maintain such records as are necessary to show whether the Act is being complied with. The Act does not provide that the records must be in any particular form. But they must be in sufficient detail so as to show that the worker was paid not less than the national minimum rate for the hours of work to which the payments received by the worker relate. In this context ‘hours of work’ has the meaning ascribed to that term by s.8 of the Act.
In contending that records were maintained, the Respondent relied on tachograph records and pay statements issued to the Claimant. The tachograph records, at best, relate to the time actually worked by the driver in question. That may be sufficient compliance with the requirement to keep records for the purpose of other enactments. But, as previously noted, working hours for the purpose of the Act of 2000 can relate to the hours during which the worker is contracted to work and for which he or she is paid. That may, or may not, correspond to the time actually worked in a given reference period.
Moreover, s.8(2) of the Act expressly provides that time spent travelling on official business constitutes working time for the purpose of determining if an employee is being paid less than the national minimum wage. It follows that, in part at least, time spent by the Claimant in travelling with his vehicles on ferries can constitute part of his working time for the purposes of the Act. Further, it is significant that the Claimant’s contract of employment (the relevant provision of which is reproduced above) provides that he was regularly required to stay overnight in his vehicle. The effect of this provision is that the Claimant was not free to dispose of his time as he wished in the period during which he was so required. This time too can constitute working time for the purposes of the Act of 2000 if during those periods the Claimant could be required to perform any work including securing the safety of the vehicle.
In the Court’s opinion, in consequence of these considerations, tachograph records do not constitute a reliable means of showing that the Act of 2000 is being complied with within the meaning of s.22(1) of the Act. At best they record time actually or physically worked. But, on the analysis of the relevant statutory provisions above, the Claimant’s entitlement is to be paid the national minimum wage in respect of the hours that he was contracted to work.
Result
In the absence of records that comply with s.22 of the Act of 2000, it is for the Respondent to prove that the Claimant received the national minimum wage. It is not disputed that he was paid at the rate of €60.55 per day. In evidence he claimed to have worked an average for 50 -60 hours per week. However, having considered the evidence as a whole the Court does not consider that likely. As a matter of probability the Court considers that the actual hours were closer to the contractual hours of 48 per week.
Having regard to all the circumstances of this case the Court is satisfied that the Claimant’s working hours should be ascertained in accordance with s.8(1)(a)(i) of the Act. In this case the contractual hours of the Claimant were 48 per week and it is in respect of that number of hours that he is entitled to be paid the national minimum wage. Having so found it follows that the Claimant was not paid the national minimum wage over the course of his employment. He is therefore entitled to an award of arrears of pay.
The Court measures the arrears of pay to which he is as follows: -
Number of week worked covered by the claim: 174
Amount Received: 174 x €302.75 = €52,678.50
Number of weeks @ €8.65 per hour: 174 x 48 x €8.65 = €72,244.80
Less amount received (€52,678.50): €19,556.30
Amount of Arrears Due: €19,556.30
Determination
The Court finds that the within complaint is well-founded. The Respondent is directed to pay to the Claimant arrears of wages in the amount of €19,556.30. The decision of the Rights Commissioner is set aside and substituted with the terms of this Determination.
Signed on behalf of the Labour Court
Kevin Duffy
3rd March, 2014______________________
JMcCChairman
NOTE
Enquiries concerning this Determination should be addressed to Jonathan McCabe, Court Secretary.