ADJUDICATION OFFICER DECISION

Adjudication Decision Reference: ADJ-00000254

Complaint for Resolution:

Date of Adjudication Hearing: 10/03/2016

Workplace Relations Commission Adjudication Officer: Kevin Baneham

1. Procedure:

1. On the 22^nd October 2015, the complainant referred a complaint to the Workplace a Relations Commission pursuant to the Payment of Wages Act. The complainant is the finance manager of the respondent. The respondent is a company limited by guarantee and has as its objectives the development of an identified service on the island of Ireland.
2. The complaint was scheduled for adjudication on the 10^th March 2016. The complainant attended in person and was accompanied by two work colleagues. The company secretary attended for the respondent and he was accompanied by a civil servant from the Department of Public Expenditure and Reform as well as the recently retired chaired of the Pension Committee.
3. In accordance with Section 41(4) of the Workplace Relations Act, following the referral of the complaint to me by the Director General, I inquired into the complaint and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint.

2. Complainant’s Submission and Presentation:

2.        The complainant commenced employment with the respondent on the 5^th January 2009 and continues to work as Finance Manager. He is a member of the respondent pension scheme and pays contributions as part of this membership. He was informed by the respondent that his monthly contributions would increase from 1.5% to 7.35% from the 1^st April 2015. He objected to this increase and drew the respondent's attention to his contract of employment, which makes reference to the rate of contribution being 1.5%. Following this, the respondent made deductions from his month salary, commencing in April 2015 equivalent to 7.35%. The complainant submitted pay slips from the preceding month and from this month to show that the amount deducted increased from €81.25 to €398.13. The complainant states that the additional amount deducted is unlawful and does not accept the respondent's submission that it is one “required by law”.

2. At the adjudication, the complainant submitted a legal opinion regarding whether the decision of the pension scheme is such that it is required by law and could fall within the scope of section 5(1)(a) of the Payment of Wages Act. It is submitted that the respondent is a company limited by guarantee and subject to the Companies Acts. It is not one of the six Implementation Bodies established under the Belfast/Good Friday Agreement. Decisions of the scheme are not such that they are required or authorised by statute or any instrument made under statute. The British-Irish Agreement Act, 1999 did not provide the respondent with the statutory basis to make such deductions and while the pension scheme is referred to in the Annex, the provisions of the Annex do not have the force of law.

2. In supplemental legal submissions, the complainant states that acts carried out pursuant to the Belfast Agreement, such as the North-South Pension Scheme, do not in turn give the Pension Scheme the force of statute, and nor is it a statutory instrument. It was submitted that while Article 29(7)(2) of the Constitution provides for the establishment of north south bodies, and following this, the North-South Pension Scheme is valid. While acts to implement the Belfast Agreement, as an international agreement, are valid, they do not have the status of statutory instruments. While the British-Irish Agreement Act, 1999 permits the making of regulations for matters arising from the Act, no such regulation has been adopted relevant to this complaint.

2. In further submissions, the complainant submits that the fact that the Belfast Agreement is appended as a Schedule to the Act of 1999 does not give the Agreement itself the status of a domestic statute; it is the enacting sections in the statute itself that have such status. It is submitted that there would be no need for the provisions of the Act if the Agreement exhibited in the Schedule already had the force of law. While the North-South Pension Scheme is a valid pension scheme, actions of the pension scheme do not have the status of law (and therefore do not fall under section 5(1)(a) of the Payment of Wages Act). It is further submitted that the reference in the respondent’s Memorandum and Articles of Association to a power regarding pension contributions cannot amount to delegated legislation.
3. At the outset of the hearing, the respondent outlined that in spite of this and other similar complaints, everyone involved had continued their excellent working relationship. The change in the pension scheme arose from significant changes in the UK in public sector pensions. The pension scheme in question was established pursuant to the British-Irish Agreement Act, 1999 and provides for the employees of the six Implementation Bodies established under the Act. The respondent was created after the Agreement and refers in its Memorandum of Association to carrying out its objects and performing its functions in accordance of the policy directives of the North-South Ministerial Council.

3. Respondent’s Submission and Presentation:

3. The respondent outlines that in February 2015 meeting of the North-South Ministerial Council, the Irish Minister for Public Expenditure and Reform and the NI Minister for Finance and Personnel formally agreed amendments to the pension scheme, increasing the contributions made by members. This was the sixth amendment made to the scheme and the most significant. The scheme is administered by a Pensions Administrator, who attends committee meetings with the six CEOs of the Implementation Bodies and the CEO of the respondent. It carries out the wishes of the North-South Ministerial Council.

3. The respondent outlines that it is entitled to make the increased deductions of the complainant's salary as it is a measure required by statute or an instrument made under a statute. The pension scheme was established pursuant to Annex 1, Part 7 of the British-Irish Agreement Act, 1999 and extended to include employees of the respondent on its formation in 2000. The respondent submits that the scheme can be termed as a statutory provision and refers to the definition of the expression “statutory instrument” in the Statutory Instruments Act, 1947. The respondent says that the decision to amend the scheme arose from a decision of the North-South Ministerial Council and as such as, falls within the definition of statutory instrument. It follows, therefore, that the deductions are required or authorised by law and fall within section 5(1)(a) of the Payment of Wages Act. The respondent acknowledges that no formal statutory instrument has been promulgated and asserts that the scheme is made pursuant to a statutory power and is, therefore, a statutory instrument

3. In supplementary submissions, the respondent outlines that the fact the Belfast Agreement is appended as a Schedule to the Act of 1999 does not give it lesser legal effect. It refers to the wider implication any such finding would have on the Irish statute book. It refers to the Long Title of the Act of 1999 that makes provision for the Implementation Bodies created under the Belfast Agreement. The respondent outlines that a statutory basis is required of every public section pension scheme. In this case, the 1999 Act provides the basis for the North-South Pension Scheme. Within the respondent’s Memorandum of Association is its obligation to carry out the directives of the North-South Ministerial Council and provides for a pension scheme with the approval of the North-South Ministerial Council and the respective Finance Ministers. The respondent outlines that it was permitted to join the North-South Pension Scheme as the wording at paragraph 3.2 of Part 7 of Annex 2 of the Agreement was wide enough to encompass it. It is submitted that if the pension scheme itself has statutory basis, then amendments made by the scheme must also have this same statutory basis.

3. The respondent submits that it is entitled to rely on the Statutory Instruments Act, 1947 as the Act of 1999 falls within the definition of “statute” in section 1(1) of the Act, this being an Act of the Oireachtas. It further submits that acts of the North-South Ministerial Council fall within the purview of section 2(1)(b)(v), i.e. a statutory instrument made by “any person or body, whether corporate or unincorporate, exercising throughout the State any function of government, or discharging throughout the State any public duties in relation to public administration”. Section 2 further refers to the statutory instrument as required by statute to be laid before both or either the Houses of the Oireachtas or is of such character as affects the public generally or any particular class or classes of the public. Section 2(1)(d) refers to the statutory instrument as not a statutory instrument which is required by a statute to be published by Iris Oifigiúil. The respondent outlines that the Act of 1999 does not require the statutory instrument to be published in Iris Oifigiúil. The respondent submits that all four criteria apply and the scheme established in accordance with paragraph 3.2 of Annex 1, Part 1 of the Act of 1999 falls within the definition of statutory instrument provided by the Act of 1947. It follows that the deductions fall within the section 5(1)(a) of the Payment of Wages Act.

4. Findings and reasoning:

4. Section 5(1)(a) of the Payment of Wages Act permits deductions to be made by an employer of wages where the deduction “is required or authorised to be made by virtue of any statute or any instrument made under statute.” It follows that the question to be determined in this case is whether the additional monthly deductions made by the respondent to the complainant’s wages are so required or authorised. As with cases involving section 14 of the Equal Status Acts, these cases can involve WRC Adjudication Officers engaging in statutory interpretation of statutes well outside the corpus of employment and equality law. In this case, the statutes are the British-Irish Agreement Act, 1999, the Agreement and its Annexes as well as the Statutory Instruments Act, 1947.

4. The second facet of this case is that it is one of a number of complaints referred by employees of the same respondent to the Workplace Relations Commission. This led to an evolving argument between the parties, such that at the adjudication of this complaint, the parties sought to address the points made by the other side at the earlier adjudications of the other complaints. The parties sought, and were granted, the facility of making additional written, legal submissions. The respondent refers to other adjudication decisions where it succeeded in defending similar claims. While it is appropriate to have regard to such decisions, they are not binding on this adjudication, in particular where there may have been different facts and also due to the more detailed submissions made by the parties.

4. It is worth noting at this juncture that the complainant has been subject to enhanced pension deductions required by the Financial Emergency Measures in the Public Interest legislation. The validity of those deductions is not the subject of this adjudication.

4. For the respondent to succeed in this case, the respondent must show that the increased contribution recovered from the complainant’s wages was one that is required or authorised by statute. This involves consideration of the legal status of the Agreement and its Annexes contained in a Schedule to the Act of 1999. It also involves consideration of the questions of whether the pension scheme and the decision to increase the complainant’s contribution fall within the definition of “statutory instrument” as provided by the Act of 1947.

4. In answer to the first question, it is clear from the Supreme Court authority of O’Neill v Governor of Castlerea Prison [2004] 1 I.R. 298 that the complainant is correct in his assertion that the Agreement and the Annexes do not have the force of domestic law. At page 311, Keane C.J. held

“Article 29.6 of the Constitution provides that no international agreement is to be part of the domestic law of the State save as may be determined by the Oireachtas. The British-Irish Agreement itself, accordingly, did not become part of our domestic law, although the 19^th Amendment enabled the State to be bound by it, that being part of the mechanism by which the amendments contemplated to Articles 2 and 3 of the Constitution were effected by referendum. There is no basis in law whatever, in my view, for the proposition advanced on behalf of the applicant that the Good Friday Agreement, which was set out in Annex 1 to the British-Irish Agreement, was incorporated at any stage in the domestic law of the State and both its language and the language of the 1998 Act is wholly irreconcilable with that proposition.”

4. In relation to the question of the applicability of the Statutory Instruments Act, the following issues arise. The first issue relates to the meaning of the word “scheme”. According to Dodd “Statutory Interpretation in Ireland”, the term “scheme” is often used where power is given to make detailed arrangements relevant to an administrative function. “Scheme” is included in the definition of “statutory instrument” in the Act of 1947 and schemes are frequently employed in relation to superannuation. Dodd gives as an example of an enabling provisions section 2 of the Superannuation and Pensions Act, 1976, and the Civil Service Widows’ and Children’s Contributory Pension Scheme, 1977 as an example of a scheme established in accordance to such a provision. It is worth noting that the superannuation scheme was created further to a statutory instrument and its amendments also provided by statutory instruments, for example of 1979 (S.I. 177/79) and 1981 (S.I. 56/81).

4. In Hogan and Morgan “Administrative Law in Ireland” 4^th Edition, the authors outline that the Statutory Instruments Act 1947 provides for the publication of all items of delegated legislation. The Act lists the offices and bodies within the scope of the Act and this includes “Any person or body, whether corporate or incorporate, exercising throughout the State any functions of government or discharging throughout the State any public duties in relation to public administration.” Up to the enactment of the Statute Law Revision Act, 2015 on the 18^th July 2015, the Attorney General retained the power to exempt the application of the Act of 1947 to particular provisions. Notice of an exemption must be published in Iris Oifigiúil. It is also worth noting that no such exemption was issued in respect of this matter.

4. Section 3(1) of the Act of 1947 (as amended by section 1 of Statutory Instruments Act, 1955) provides that a copy of each statutory instrument to which the Act applies must be sent to certain listed libraries within 10 days of their being made. A notice of the making of the statutory instrument shall be published in Iris Oifigiúil. There are a number of statutory provisions that provide an exemption to these publication requirements, for example section 8(3) of the Roads Act 1993, section 101 of the Central Bank and Credit Institutions (Resolution) Act 2011, section 62 of the Credit Institutions (Stabilisation) Act 2010 and section 1 of the Anglo Irish Bank Corporation Act 2009. Certain other provisions require the authority to publish rules, bye-laws etc and they are not, therefore, subject to the Act of 1947: see section 61(9) of the Roads Act, 1993, section 8(8) of the Irish Takeover Panel Act 1997, Wildlife (Amendment) Act 2000 section 16(1). As the respondent points out, the Act of 1999 does not provide for a publication requirement for regulations issued pursuant to the Act. This cannot, however, be construed to an exemption from section 3 of the Act of 1947, as amended.

4. Section 3(2) of the Act of 1947 provides that “the validity or effect or the coming into operation of any statutory instrument to which this Act primarily applies shall not be affected by any non-compliance with subsection (1) of this section.” It follows that, in civil proceedings, non-compliance with the publication requirement does not affect the validity or effect of the provision in hand.

4. It is clear that the respondent has not complied with the publication requirements provided in section 3. It is not claimed that the Attorney General has issued an exemption regarding publication. This failure, of itself, does not invalidate the additional deductions made by the respondent from the complainant’s salary, except to note that the respondent seeks to rely on sections 1 and 2 of the Act of 1947, without compliance with section 3.

4. As submitted by the complainant, I find that the respondent is not entitled to rely on the Act of 1947 because the pension scheme does not have statutory force in this jurisdiction, so that increases in contributions cannot be said to be “required or authorised” by statute. This is the case because of the dicta in O’Neill v Governor of Castlerea Prison regarding the status of the Agreement and its Annexes included in the Schedule to the Act of 1999. The matter falls to be determined according to the complainant’s contract of employment. The parties agreed that this provides the rate of contribution as being 1.5%. Since April 2015, the complainant has been subject to deductions of 7.35% grounded on the measure subject to this case. According to the findings of this report, the complainant has been subject to an unlawful deduction of 5.85% per month since April 2015 and in the month of April 2015 was unlawfully deducted €316.88. The complainant should, therefore, be refunded the equivalent of 5.85% deducted from his salary for each month since April 2015.
5. Section 41(4) of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint in accordance with the relevant redress provisions under Schedule 6 of that Act.

5. Decision:

5. The additional deductions of 5.85% recovered by the respondent from the complainant for each month since April 2015 are “not required or authorised by statute”, and are therefore unlawful deductions and each represents a breach of the Payment of Wages Act. The respondent shall reimburse the complainant the amount of €316.88 for April 2015 and for all amounts subsequently unlawfully recovered.

Dated:   21^st June 2016