FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 27(1), NATIONAL MINIMUM WAGE ACT, 2000 PARTIES : EAMONN MORRISSEY T/A VALCON INTERNATIONAL TRANSPORT (REPRESENTED BY EAMONN MORRISSEY) - AND - MR GIRTS MILTOVICS (REPRESENTED BY RICHARD GROGAN & ASSOCIATES) DIVISION : Chairman: Ms Jenkinson Employer Member: Ms Doyle Worker Member: Mr McCarthy |
1. Appeal of Rights Commissioners Decision r-133168-MW-13/EH
BACKGROUND:
2. This is an appeal by the employer of Rights Commissioner's Decision No: r-133168-mw-13/EH made pursuant to Section 27(1) of the National Minimum Wage Act, 2000. A Labour Court hearing took place on the 18th September 2014. The following is the Court's Determination:
DETERMINATION:
This is an appeal against the decision of a Rights Commissioner in a claim made by Mr. Girts Miltovics (the Complainant) against his former employer, Eamon Morrissey t/a Valcon International Transport (the Respondent) under the National Minimum Wage Act 2000 (the Act).
In his Decision the Rights Commissioner decided that the Complainant was entitled to arrears of €11, 262.50 under the Act and ordered the Respondent to pay this sum not later than 6 weeks from the date of the Decision.
The Complainant worked for the Respondent as a Driver, from 12thSeptember 2011 until 17thJune 2013. He submitted his claim under the Act to the Rights Commissioner on 30thApril 2013. He claims that he was underpaid the national minimum wage by €2.65 per hour.
The Court is satisfied that the Complainant has complied with the mandatory requirements of Section 23 of the Act.
Summary of the Complainant’s Case
Mr Richard Grogan, Solicitor, Richard Grogan & Associates, Solicitors, on behalf of the Complainant contended that the Complainant normally worked 50 hours per week. He stated that the Complainant was paid €600.00 per week however, based on the Respondent’s tax returns to the Revenue Commissioners, €300.00 of this was treated as travel & subsistence allowance, therefore he contended that the Complainant was not paid in accordance with the statutory national minimum wage.
Summary of the Respondent’s Position
Mr John Canty, John Canty & Co. Chartered Accountants, on behalf of the Respondent stated that the Complainant did not work the claimed average of 50 hours per week. He argued that the Tachograph records disclose that the Complainant worked considerably less hours per week. Furthermore he stated that based on incorrect advice the Respondent received from a previous firm of accountants that the Respondent had made incorrect returns to the Revenue Commissioners. Mr Canty stated that €450.00 of the €600.00 paid to the Complainant should have been returned to the Revenue Commissioners as wages and the remainder was in respect of travel & subsistence allowances and accordingly submitted that the Complainant was paid in line with the national minimum wage for the hours worked.
Findings of the Court
The Court cannot accept the Respondent’s contention that the records of hours worked based on the Tachograph records provide evidence of the Complainant’s working hours. In the Court’s opinion Tachograph records do not constitute a reliable means of showing that the Act is being complied with within the meaning of Section 22(1) of the Act. At best they record time actually or physically worked. But do not provide details of the hours that the Complainant was contracted to work.
Section 22(1) of the Act places an obligation on an employer to keep records showing compliance with the Act. Section 22(3) states:-
- (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.
It is not in dispute that the Complainant was paid €600.00 per week. Mr Grogan contended that this amount was paid on the basis that €300.00 was treated as wages and €300.00 as travel & subsistence allowance. Whereas the Respondent contended that €450.00 was wages and the remainder as approved subsistence allowances. The Court notes that when this was first raised at the Rights Commissioner hearing, a relative of the Respondent who attended the hearing for the purposes of seeking an adjournment due to the non-availability of the Respondent (that application was refused) declined to answer. Therefore the Court is satisfied that no evidence was given at the Rights Commissioner's hearing on behalf of the Respondent on this issue.
The Court notes that the Revenue approved travel & subsistence payments for drivers is dependent on the number of hours worked away from base. The Revenue Commissioners allow a payment of €13.71 for periods between 5 hours and 10 hours away from base and €33.61 for period over 10 hours per day working away from base. In the absence of employer records and in order to give the benefit of the doubt to the Complainant’s contention regarding the hours he worked the Court measures the travel & subsistence payments at €168.05 per week. Part 11 of the Schedule to the Act provides that for the purposes of calculating reckonable hourly rates of pay, travel & subsistence payments are non-reckonable. Therefore, the Court must find that the remainder of the payments made to the Complainant were in the form of wages. Accordingly, the Court finds that the Complainant was paid the sum of €431.95 gross per week; however as only €300.00 of this amount was declared to the Revenue Commissioners it appears that there was a contravention of tax and social welfare obligations.
The question of compliance with tax and social welfare obligations are dealt with in Section 40 of the Act. It states: -
Section 40 (2) of the Act,
- 40.—(1) Where a term or condition of the contract of employment concerned contravenes theTaxes Consolidation Act, 1997, or the Social Welfare Acts, the employee concerned shall, notwithstanding the contravention, be entitled to redress under this Act for any under-payment of an amount of pay to which he or she would otherwise be entitled under this Act.
(2) Where, in proceedings under this Act, it is shown that a term or condition of a contract of employment contravenes theTaxes Consolidation Act, 1997, or the Social Welfare Acts, the rights commissioner, the Labour Court, an inspector or the Circuit Court, as the case may be, shall notify the Revenue Commissioners or the Minister for Social, Community and Family Affairs, as may be appropriate, of the matter.
The Respondent accepted that part of the payment made to the Complainant did not comply with the Taxes Consolidation Act, 1997 or the Social Welfare Acts and that it intended to rectify this situation. In accordance with its obligations under Section 40 (2) of the Act, the Court will send a copy of this Determination to the Revenue Commissioners for such action as is deemed appropriate.
The Complainant’s Representative, in the course of the hearing, stated that the Complainant normally worked 50 hours per week. The period covered by the claim under the Act relates to the period from 12thSeptember 2011 until 30thApril 2013, when the claim was submitted under the Act to the Rights Commissioner. Therefore, the Court finds that the Complainant was paid €431.95 gross per week for 50 hours per week; this equates to €8.639 per hour and results in a shortfall under the Act of .011c per hour, for 50 hours per week, for a period of 85 weeks, giving rise to an underpayment of €46.75.
Determination
The Court finds the Respondent was in breach of the Act, and that the Complainant was underpaid under the Act in the amount of €46.75. The Court upholds the Rights Commissioner’s Decision to award expenses of €50.00 to the Complainant.
Therefore, based on the findings of the Court the decision of the Rights Commissioner is varied, and the Respondent’s appeal partially succeeds. The Respondent should therefore pay the Complainant a total of €96.75 in discharge of his claim under the Act. The Court orders the Respondent to pay this sum to the Complainant not later than 6 weeks from the date of this Determination.
The Court so Determines.
Signed on behalf of the Labour Court
Caroline Jenkinson
21st November 2014______________________
AHDeputy Chairman
NOTE
Enquiries concerning this Determination should be addressed to Andrew Heavey, Court Secretary.