EMPLOYMENT APPEALS TRIBUNAL
CASE NO.
PW113/2012
APPEAL(S) OF:
John McDermott - appellant
against the recommendation of the Rights Commissioner in the case of:
Health Service Executive - respondent
under
PAYMENT OF WAGES ACT, 1991
I certify that the Tribunal
(Division of Tribunal)
Chairman: Mr G. Hanlon
Members: Mr. N. Ormond
Mr N. Dowling
heard this appeal at Dublin on 16th January, 25th and 26th March 2015
Representation:
Appellant(s): Ms. Cathy Maguire BL instructed by Ms. Paula Murphy, Solicitor, Daniel Spring & Co. Solicitors, 50 Fitzwilliam Square, Dublin 2
Respondent(s): Ms. Mary Fay BL instructed by Ms. Gill Woods, Arthur Cox Solicitors, Earlsfort Centre Earlsfort Street, Dublin 2
This appeal came before the Tribunal by way of an appeal by the employee against the decision of the Rights Commissioner reference R-111068-PW-11/DI dated 7 February 2012.
A preliminary decision of the Tribunal issued in this case following a hearing on the 19 June 2013.
Appellant’s Case
The appellant commenced employment at Connolly Hospital in Blanchardstown as a consultant endocrinologist in January 2007 with a category two contract. In July 2008 he received a letter from the hospital manager which stated “I am now authorised to offer you the revised consultant contract”. The Enabling circular, salary scales and a copy of the contract was enclosed with the letter. An incentive to sign the contract at an early stage was offered to the appellant which involved the back dating of the contract to June 2008. The appellant understood from the letter and the enclosed documents that the contract was approved. He opted for the B Star option and met with management and HR and signed the contract on the 26 September 2008. The appellant understood that the contract was approved and as no reference to further ministerial sanction was made he expected the correct payments would be received. As part of the new contract the working hours increased from 33 hours to 37 hours per week. The reporting structures changed with the appellant required to report to a clinical director where previously he had to report to the hospital manager. In addition the appellant was restricted to 20% private practice. In 2009 the salary arrangements were partially implemented.
Under cross examination the appellant did not accept that it was custom and practice that Ministerial sanction was required after the signing of the contract. The appellant explained that he had shown a degree of patience by waiting until the 29 June 2011 to make this claim under the Payment of Wages Act.
Respondent’s Case
The general manager in the HR department (AC) gave evidence of his role in the negotiating of consultant contracts from 2003. Contract negotiations had broken down on a number of occasions however in 2007 and early 2008 intense talks resulted in broad agreement and revised contracts were prepared. The process which the appellant signed up to in 2008 was part of an exercise to identify the numbers who would sign up in order to establish the funding which the organisation would require in implementing new contracts. The witness believed that consultants were aware that ministerial sanction was required and he expected that representative organisations had informed their members of this requirement.
Under cross examination AC stated that it was never contemplated that ministerial sanction would not follow. Public sector finances at the time were of huge concern to the government and the organisation was not in a position to dispute that with the Minister. The respondent could not pay without a ministerial circular sanctioning the pay.
Determination
The Tribunal, having considered the evidence over a number of days, must firstly decide as to whether the salary payable to the appellant pursuant to his contract of the 26 September 2008 is properly payable. The Tribunal heard much evidence from both parties and very helpfully has been furnished with the contract documentation and has considered same in the context of the appeal.
The contract is quite specific and in the preamble advises the employee of the documentation which should be considered as forming part of the contract and states that the documentation “will embody the entire understanding of the parties in respect of the matters contained therein”. The Tribunal heard that the appellant opted for contract type B. It is conceivable that the appellant would have formed a legitimate expectation on entering into the contract that the salary would be paid. Issues around legitimate expectation are not a matter for the Tribunal.
That said, the specific nature of the contract both in terms of its obligations vis a vis the appellant and the respondent, does in the Tribunal’s opinion, assist the Tribunal in determining whether the salary outlined in Clause 23 of the contract renders such payments properly payable within the meaning of the Payment of Wages Act.
Very helpfully, all parties are satisfied that the FEMPI Legislation does not apply in these circumstances. It is obviously the appellant’s case that the salary was at all times properly payable within the meaning of the Act. The respondent has suggested that a further sanction/consent was at some stage required by the Minister for Health and Minister for Finance by virtue of Section 22(4) of the Health Act. The respondent suggested the absence of such consent renders the portion of the salary not received by the appellant as not properly payable.
Whilst it is accepted that the Health Act has at Section 22 a requirement for Ministerial approval of terms under a contract, the notion that an employee must assume or is deemed to be on notice that the Section 22(4) approval and consent is absent at the time of entering into a contractual obligation, (the contract having been settled by the respondent body obliged to ensure Ministerial approval and consent) cannot be accepted.
The contract documentation specifically outlines what is to be the “entire understanding of the parties.” It was always open to the respondent to specifically set out any or all qualifications, be they statutory or otherwise, it wished or indeed was obliged to insert into the contract and/or the contract documents which it furnished to the appellant prior to the execution of same.
In this case the respondent did not do so and stated that because the appellant was a doctor that he must have a working knowledge of the Health Act of 2004 and must have been aware that further consent of the Minister for Finance was needed. A close examination of the relevant section would not lead anyone to believe that the said consent would or could be retrospective. In fact the phraseology of the said section obliging the respondent, with approval and consent of Ministers, “determine” the terms and conditions of a contract, leads to a contrary belief that one would assume that this exercise was completed pre contract. Indeed if contracts are entered into by the HSE in advance of the relevant approval and consent such practice is hardly sound on many fronts.
It is a view of the Tribunal that the said Section obliges the HSE to have such Terms and Conditions approved prior to entering into a contract and not retrospectively. The logical conclusion of the respondents argument in this case is that it entered into contracts in 2008 none of which had the approval under Section 22(4) of the Ministers, or certain sections of the contract were approved whilst other significant parts were not. It would be reasonable to assume that the respondent on producing a very detailed contract with three distinct options for Consultants, namely Contract type A, B and C as defined in the contract, would prior to being furnished to any party for signature, have by implication the Ministerial approval as provided in the Health Act.
Accordingly, the Tribunal is satisfied that the salary as outlined in the contract to include the scales were properly payable within the meaning of the Payment of Wages Act.
The second matter for consideration by the Tribunal is as to whether an unlawful deduction has occurred as outlined in Section 6 of the Payment of Wages Act. The Section is very clear that any deduction must have the consent of the employee and that consent must be furnished in writing. The only documentation furnished to the Tribunal that is executed by the parties concerning the salary of the employee is the actual contract. There is no provision in the contract that the Tribunal can find which allows for the employer to deduct the salary. The deductions being complained of were not allowances or expenses but are clearly outlined in the contract as salary. Accordingly, the non- payment of this portion of the appellant’s salary is a deduction and the McKenzie case as referred to by the respondent in this instance clearly does not apply. Consequently the Tribunal is satisfied that the deduction was unlawful within the meaning of the Payment of Wages Act and that the appellant’s appeal from the Rights Commissioner should be allowed.
The final matter for consideration is the issue of an award to be made by the Tribunal to the appellant. The Tribunal has given this matter considerable thought and agrees with the Claimant’s assertion that there is no provision in the legislation which obliges the Tribunal to limit any award to the difference between what was paid and what should have been paid. In those circumstances, the Tribunal awards the appellant €14000.00
Sealed with the Seal of the
Employment Appeals Tribunal
This ________________________
(Sgd.) ________________________
(CHAIRMAN)