EMPLOYMENT APPEALS TRIBUNAL
APPEALS OF: CASE NO.
Paul Monahan – appellant PW53/2014
TE36/2014
against the decision and recommendation of the Rights Commissioner in the case of
Lotus Automation (Ireland) Limited t/a Lotus Technical Services and Lotus Works – respondent
under
PAYMENT OF WAGES ACT 1991
TERMS OF EMPLOYMENT ACT (INFORMATION) ACTS 1994 and 2001
I certify that the Tribunal
(Division of Tribunal)
Chairman: Ms A.M. Courell
Members: Mr D. Morrison
Mr T.J. Gill
heard this appeal at Sligo on 3rd September2015
Representation:
Appellant: In person
Respondent: Mr Terry McNamara of IBEC,
Pier 1, Quay Street, Donegal Town
The decision of the Tribunal was as follows:-
This case came to the Tribunal as an employee appeal under the Payment of Wages Act, 1991, against Rights Commissioner Decision r-131497-pw-13/EOS and under the Terms of Employment (Information) Acts 1994 and 2001 Rights Commissioner Recommendation r-131508-te-13/EOS.
Appellant’s Case
The appellant gave evidence. He has 25 years’ experience, starting as a technician, engineer, senior engineer, progressing to project manager. At the time he was considering taking a contract with the respondent a permanent position on design projects was also available in Galway. This position was paying €60 - €70,000.00. The appellant gave evidence that a project manager would expect more for a contract with no guarantee of an extension. The contract with the respondent was one of limited duration and as such one would expect to be paid more for this type of contract. The appellant gave evidence that a validation engineer would earn at least €60,000.00 per year and that a project manager could expect more than this. The appellant introduced documentary evidence of the pay scales available for comparative types of positions.
The appellant met with the operations manager DH and discussed his CV. His role with the respondent was to be tailor made for a particular design transfer project. The appellant explained to DH that in general he would expect a salary of at least €60 - €70,000.00 and he would expect greater than this given that the contract was for a limited period and that he would incur costs travelling from his home in Galway. The appellant also spoke to MF who offered him €55,000.00 without giving details. He took this to mean €55,000.00 for the five month period. She also said that she would do something about his expenses. He also asked about working from home one day a week. He was told that something would be done for him. However, soon after he started he received a phone call from the respondent demanding to know where he was and saying it was untenable for him to work from home. The appellant was not happy about the way the issue was dealt with.
The appellant also went through the written contract which he had signed. The contract was dated the 23rd October 2012 and was signed by the appellant on 24th October 2012. The contract stated at paragraph 2 that “Your contract will commence on the 31st October 2012 and will conclude on the 29th March 2013”. Paragraph 3 of the contract went on to state “Your salary will be €55,000 gross and refers to this assignment only”. There was no mention in the contract that the salary was an annualised one.
When he received his first pay the appellant thought it was a mistake. He was only paid €27 per hour when he had agreed more. The appellant was required to fill in time sheets but was not sure why. He phoned MF about his contract and she told him it was €55,000.00 per annum and not €55,000.00 for the 5 month contract. She asked him to read his contract. The appellant felt that this was crazy wages and his position was two levels above a position which would which would attract this lower level of pay. He was paid as permanent engineer and not as a senior Project Manager as specified in his contract. He would not have taken the position at €55,000.00 a year. He felt that he was totally hard done by and it cost him a lot of money. He continued working because he had bills to pay but he had two job offers on the day he left. The Rights Commissioner made the wrong decision. The appellant felt that his expectations were reasonable.
Respondent’s Case
MF, a recruiter with the respondent business gave evidence. She had a telephone conversation with the appellant on 5th October and again on 8th October 2012. She spoke to him about the proposed position and his work to date. It was a general conversation about expectations. After the appellant met with DH, MF offered him the contract. When he got in touch with her he did not mention salary. Later she did induction with him and he signed the contract.
On 30th November 2012 the appellant contacted her about a problem with his pay. She told him to read his contract. The contract says €55,000. She said that while it does not express the words per annum that this was an annual salary. The respondent has about 70 employees on contracts. The contract has since been amended to make it clear. She regarded €55,000.00 per annum to be a good salary.
The operations manager DH gave evidence. He met the appellant on 9th October 2012. They discussed his technical background. The appellant expected a salary of €60 - €70,000.00 per annum. In late October the appellant was one of 3 contractors starting work for a client business. The appellant did not ask about salary at that time.
On 30 November 2012 the appellant sent an email to payroll saying he had been paid €27 per hour when his agreed rate was €55 per hour. DH was adamant that he had never offered the appellant €55 per hour. His salary was €55,000.00 per annum and not €55 per hour. DH met the appellant face to face on 23rd January 2013 and explained to him what his contract said. DH has been operations manager since 2007 and he never heard of a salary of €55k for a 5 month contract. The respondent has between 60 and 70 staff on the same format contract as the appellant and there are no other disputes. DH accepted that the contract did not say €55,000.00 per annum.
The HR manager MB gave evidence. He signed the appellant’s contract on behalf of the respondent. The salary was €55,000.00 gross and what was meant by this was that it was an annual salary. It is a standard contract.
When the appellant’s solicitor queried his salary, MB wrote to the appellant and clarified his contract. In his view the prospects for earning €132,000 per annum were unlikely. Moreover, MB said told the Tribunal that it was prudent to change the contract following the appellant’s complaint to remove doubt.
Determination
Dissenting opinion of Mr Desmond Morrison:
The burden of proof in this case rests with the appellant and it is my opinion that he fails to discharge this burden, for the following reasons:
I have to look at the definition of the wages that were properly payable under the Payment of Wages Act
A) Direct evidence given by appellant to a pay rate agreed with Ms F at €55 per hour and confirmed by email sent by the respondent on 30/11/12.
B) The appellant is now seeking €55k for the five month contract. This would be equal to €132,000 per annum. I find that this rate is unreasonable.
C) The appellant’s own expectation for this kind of work was €60k to €70k per annum. I accept that this was a legitimate expectation for this type of work.
D) The respondent’s evidence given by Ms F was that she offered him an annual salary of €55k on 17/10/12 and the appellant said he would think about it and then he accepted it the following day.
E) Evidence was also given that this was the rate paid by the respondent for this type of work and that it was also the custom and practice.
Based on the oral evidence given at the Hearing I find that the €55k salary was an annualised one. Therefore I affirm the Rights Commissioner decision.
Majority Decision
This case came before the Tribunal by way of an appeal of the Rights Commissioner decision pursuant to Section 7 of the Payment of Wages Act, 1991. A majority of the Tribunal finds that the non-payment of €55,000.00 for the five month assignment constitutes a breach of section 5 of the Payment of Wages Act, 1991.
The Tribunal accepts that the appellant expected to be paid more than a permanent member of the respondent’s staff because the contract was for a period of five months only and that he would have to travel an hour and a half each day from where he lived. The appellant’s oral evidence was supported by the documentary evidence of comparators which he submitted into evidence. The appellant would not have accepted the position if the figure of €55,000.00 represented an annualised salary as there were alternative positions available at a higher rate and closer to home.
The Tribunal also has to have substantial regard to the wording of the contract dated 23rd October 2012. The contract was signed by the appellant on the 24th October 2012. The contract stated at paragraph 2 that “Your contract will commence on the 31st October 2012 and will conclude on 29th March 2013”. Paragraph 3 of the contract went on to state “Your salary will be €55,000.00 gross and refers to this assignment only”. While it is custom and practice to express a wage in terms of an annualised salary the wording of the contract in this case expressly states that it “refers to this assignment only”. The Tribunal has to look at the meaning of the words used in the contract against the relevant discussion between the parties. Looking at the express wording of the contract from the point of view of either business common sense or the officious by-stander test or giving the words used their ordinary meaning, the contract must be construed as providing for a rate of pay of €55,000.00 for the five months of the assignment. The respondent had total control over the drafting of the contract and its terms entitle the appellant to €55,000.00 for the five month period. It is significant that the respondent has since amended its contract to include specific reference to the term “per annum”.
Accordingly, the Tribunal finds that the appellant’s complaint is well founded and it sets aside the decision of the Rights Commissioner. Having so determined, the Tribunal is required to order the respondent to pay the appellant compensation of such an amount as it considers reasonable. In this regard, the Tribunal notes that the appellant contacted the respondent at the end of November 2012, when he became aware that he was being paid less than he had agreed. He was then advised of what his employed had intended to mean by the reference to “€55,000 gross”. The appellant did not terminate his contract, despite having the option of doing so with a notice period of four weeks. Furthermore, the Tribunal accepts that the respondent did not act in any way to deliberately mislead the appellant.
The Tribunal allows the appeal under the Payment of Wages Act, 1991 and measures the compensation payable to the appellant in the amount of €11,000.00.
In respect of the appeal under the Terms of Employment (Information) Acts 1994 and 2001, having reviewed the evidence present at the Hearing, the Tribunal unanimously finds that the respondent did not act in breach of the legislation. The recommendation of the Rights Commissioner is upheld.
Sealed with the Seal of the
Employment Appeals Tribunal
This ________________________
(Sgd.) ________________________
(CHAIRMAN)