ADJUDICATION OFFICER DECISION

 Adjudication Decision Reference: ADJ-00002558

Complaint for Resolution:

Date of Adjudication Hearing: 14/10/2016

Workplace Relations Commission Adjudication Officer: Aideen Collard

Procedure:

In accordance with Section 41 of the Workplace Relations Act 2015, following receipt of a complaint by the Workplace Relations Commission (hereinafter ‘WRC’) on 31^st March 2016 under Section 27 of the Organisation of Working Time Act 1997, seeking redress for the underpayment of pay in lieu of public holidays and referral to me by the Director General, I inquired into the complaint and gave the Parties an opportunity to be heard and to present any relevant evidence. Detailed documentation pertaining to the Complainant’s hours of work and pay was submitted by both Parties. I proceeded to a hearing of these complaints on 14^th October 2016. Both Parties were in attendance and represented themselves. I outlined the issues in lay terms and also indicated that I would be relying upon the relevant statutory provisions and case law governing public holiday statutory entitlements.

Complainant’s Submission and Presentation:

The Respondent is an Educational Charity and the three Directors and Management Committee act in a voluntary capacity. The Complainant was a founder member and originally a Director of the Respondent. On 1^st July 2010, she resigned as a Director and took up a paid part-time role within the organisation as a General Manager. She signed a written contract as furnished, the relevant provisions providing as follows: “Weekly hours: This contract will be for eighteen hours worked per week. Normal hours of work: Monday to Friday: to be agreed from time to time between employer and employee, subject to 18 hours per week being completed, any change in hours subject to mutual agreement by employer and employee.”, “Rate of Remuneration: €24,000 per annum.” and “Pay Intervals: Monthly.” The Complainant had determined her own pattern of work including what days and times she worked to make up the contracted 18 hours per week and as such, there was no formal agreement with the Respondent regarding same. She was paid €2,000 monthly for her work.

The Complainant resigned from her employment on 31^st December 2015, having given verbal notice of same in or around September 2015. It is common case between the Parties that although the contract did not provide for overtime, either paid or time off in lieu, for operational reasons, the Complainant had been required to work a considerable number of overtime hours in 2012-13. She had been paid for 100 hours and by agreement had been taking time off in lieu of the balance in the years preceding her resignation. Upon giving notice of her resignation, the Management Committee agreed to pay her for any outstanding overtime hours and holiday pay and this dispute arises in respect of the adequacy of same and in particular, the calculation of payment in respect of her public holiday pay. The Complainant confirmed that as of the date of the hearing, she had been paid for 144 of the 205 hours claimed, leaving a balance of 61 hours outstanding at a rate of €25 per hour. She explained that this related to a retrospective deduction in respect of public holiday pay spanning the last 4.5 years of her employment. She had submitted spreadsheets claiming 5 hours leave in respect of each public holiday which the Respondent reduced to 3.6 hours (being one fifth of her contracted weekly working hours) when calculating her actual hours worked as against her overtime hours claimed. She contended that as she normally worked 3 x 6 hour days per week including at least 6 hours on Mondays, she was therefore entitled to a payment for 6 hours in respect of each public holiday falling on a Monday. In her correspondence to the Respondent, she had referred to various methods of calculating her normal daily hours for the purposes of calculating her public holiday pay. It should be noted that there was no written agreement between the Parties to the effect that the final ex gratia payment was in full and final settlement of any outstanding sums due and owing.

I explained that pursuant to Section 41(6) of the Workplace Relations Act 2015, I only had jurisdiction to investigate any complaint under the Organisation of Working Time Act 1997, for a period of six months from the date of contravention until the date of referral unless there was reasonable cause for extending time to 12 months under Section 41(8) of the Act. The Complainant confirmed that there was no basis for seeking an extension of time. As this complaint was received on 31^st March 2016, I confirmed that I could only examine the public holidays falling during her employment and within the preceding six month period, which included Monday 26^th October 2015, Friday 25^th December 2015, Monday 28^th December 2015 and Friday 1^st January 2016 (as falling within the last week of her employment and therefore comprising part of her public holiday entitlement).

Respondent’s Submission and Presentation:

The Respondent disputes the Complainant’s complaint and contends that she has been paid above and beyond any amounts due and owing in her final ex gratia payment. Members of the Management Committee gave evidence confirming that they felt they had been particularly reasonable in paying her in lieu of her historic outstanding overtime hours claimed when there was no provision for same in her contract. They confirmed that in calculating her public holiday entitlement, the Organisation of Working Time (Determination of Pay for Holidays) Regulations 1997 (S.I. 475/1997) had been consulted by the Directors who also took advice from a number of external sources including a Solicitor, HR contact and the external auditor. They contended that Regulation 5(2)(a) applied to the Complainant’s situation as she did not work on public holidays and her pay was calculated by reference to Regulation 3(2) i.e. a fixed salary, which is clearly set out in her contract. Therefore and as per Regulation 5(2)(a), she was entitled to one fifth of the sum paid in respect of her normal weekly hours i.e. one fifth of 18 hours equates to 3.6 hours. They refuted the Complainant’s argument that an exception should be made in her case as her hours and times worked varied from day to day. They also referred to her spreadsheets which showed no particular pattern of working hours and refuted her contention that she normally worked 3 x 6 hour days per week including at least 6 hours on Mondays. Overall, they could not understand the basis for her calculations.

Findings and Conclusions:

It is necessary to examine the aforesaid facts in light of the relevant legislation to confirm whether the Complainant was given her correct public holiday entitlements. In relation to public holiday entitlements, Sections 21 & 22 of the Organisation of Working Time Act 1997 provide as follows:

“Entitlement in respect of Public holidays.

21(1) Subject to the provisions of this section, an employee shall, in respect of a public holiday, be entitled to whichever one of the following his or her employer determines, namely—

(a) a paid day off on that day,

(b) a paid day off within a month of that day,

(c) an additional day of annual leave,

(d) an additional day’s pay:

Provided that if the day on which the public holiday falls is a day on which the employee would, apart from this subsection, be entitled to a paid day off this subsection shall have effect as if paragraph (a) were omitted therefrom.”

Section 21(2) provides that an employee may, not later than 21 days before a public holiday, request an employer to determine which option applies under Section 20(1) and notify the employee within 14 days of the public holiday. Section 21(3) provides that if the employer fails to do so the employee is entitled to a paid day off on that day or an additional day’s pay if the proviso to Section 21(1) applies. Section 21(4) provides that the aforesaid provisions apply to part-time workers if they have worked at least 40 hours during the period of 5 weeks ending on the day before that public holiday.

“22(1) The rate—

(a) at which an employee is paid in respect of a day off under section 21, and

(b) of an employee’s additional day’s pay under that section, shall be such rate as is determined in accordance with regulations made by the Minister for the purposes of that section.

(2) For the purposes of section 21, time off granted to an employee under that section or section 19 shall be regarded as time worked by the employee.”

Accordingly, the Organisation of Working Time (Determination of Pay for Holidays) Regulations 1997 (S.I. 475/1997) (hereinafter ‘the Regulations’) provides for the calculation of public holiday pay (along with the calculation of holiday pay), Regulations 3 & 5 being the most relevant as follows:

“3(1) The normal weekly rate of an employee's pay, for the purposes of sections 20 and 23 of the Act (hereafter in this Regulation referred to as the "relevant sections"), shall be determined in accordance with the following provisions of this Regulation.

(2) If the employee concerned's pay is calculated wholly by reference to a time rate or a fixed rate or salary or any other rate that does not vary in relation to the work done by him or her, the normal weekly rate of his or her pay, for the purposes of the relevant sections, shall be the sum (including any regular bonus or allowance the amount of which does not vary in relation to the work done by the employee but excluding any pay for overtime) that is paid in respect of the normal weekly working hours last worked by the employee before the annual leave (or the portion thereof concerned) commences or, as the case may be, the cesser of employment occurs.

(3) If the employee concerned's pay is not calculated wholly by reference to any of the matters referred to in paragraph (2) of this Regulation, the normal weekly rate of his or her pay, for the purposes of the relevant sections, shall be the sum that is equal to the average weekly pay (excluding any pay for overtime) of the employee calculated over—

(a) the period of 13 weeks ending immediately before the annual leave (or the portion thereof concerned) commences or, as the case may be, the cesser of employment occurs, or

(b) if no time was worked by the employee during that period, over the period of 13 weeks ending on the day on which time was last worked by the employee before the annual leave (or the portion thereof concerned) commences or, as the case may be, the cesser of employment occurs.”

“5(1) If the employee concerned works or is normally required to work during any part of the day which is a public holiday, then—

(a) in case the employee's pay is calculated wholly by reference to any of the matters referred to in Regulation 3(2) of these Regulations, the relevant rate in respect of that public holiday shall be the sum that is equal to the sum (including any regular bonus or allowance the amount of which does not vary in relation to the work done by the employee but excluding any pay for overtime) paid to the employee in respect of the normal daily hours last worked by him or her before that public holiday,

(b) in any other case, the relevant rate in respect of that public holiday shall be the sum that is equal to the average daily pay (excluding any pay for overtime) of the employee calculated over— (i) the period of 13 weeks ending immediately before that public holiday, or (ii) if no time was worked by the employee during that period, the period of 13 weeks ending on the day on which time was last worked by the employee before that public holiday.

(2) If the employee concerned (not being an employee to whom paragraphs (a), (b) and (c) of Regulation 6 of these Regulations apply) does not work on a day which is a public holiday, then—

(a) in the case the employee's pay is calculated wholly by reference to any of the matters referred to in Regulation 3(2) of these Regulations, the relevant rate in respect of that public holiday shall be the sum that is equal to one-fifth of the sum (including any regular bonus or allowance the amount of which does not vary in relation to the work done by the employee but excluding any pay for overtime) paid in respect of the normal weekly hours last worked by the employee before that public holiday,

(b) in any other case, the relevant rate in respect of that public holiday shall be the sum that is equal to one-fifth of the average weekly pay (excluding any pay for overtime) of the employee calculated over— (i) the period of 13 weeks ending immediately before that public holiday, or if not time was worked by the employee during that period, the period of 13 weeks ending on the day on which time was last worked by the employee before that public holiday:

Provided that the relevant rate to which the employee concerned shall be entitled under this paragraph in respect of a public holiday shall not exceed the relevant rate to which he or she would be entitled in respect of that holiday if subparagraph (a) or (b), as the case may be, of paragraph (1) of this Regulation were to apply to him or her.”

 

It appears that in the final calculation of the Complainant’s pay upon the termination of her employment with the Respondent, she was paid in respect of the outstanding overtime hours worked above her contracted hours actually worked. When calculating same, payment in lieu of 3.6 hours was allowed in respect of every public holiday falling within the last 4.5 year period. The Complainant contends that she should have received at least 6 hours in respect of each public holiday falling on a Monday as she routinely worked at least 6 hours on Mondays. The Respondent contends that as she did not work on public holidays, the correct calculation of pay in lieu of her public holidays is based upon one fifth of her contracted weekly hours/pay as per Regulation 5(2)(a). As the Complainant had been informed that she would be paid any outstanding amount owed upon the termination of her employment, no issue arose as to a possible contravention of her public holiday statutory entitlements at the material time. This complaint under the Organisation of Working Time Act 1997 arises in respect of the manner in which her final payment was calculated and in particular, the fact that 3.6 hours was credited in respect of each public holiday as against the 5 hours she had originally claimed. Arguably, this complaint is therefore one of an unlawful deduction from wages and should have been more properly brought under the Payment of Wages Act 1991. However, for the purposes of giving clarity and finality to the Parties, I deem it appropriate to adjudicate on what pay in lieu of public holidays for the material period within time was properly payable to the Complainant.

Firstly, I am satisfied from the spreadsheets provided, that as the Complainant had worked at least 40 hours during the period of 5 weeks ending on the day before each of the public holidays in question (Monday 26^th October 2015, Friday 25^th December 2015, Monday 28^th December 2015 and Friday 1^st January 2016), she qualified for public holiday statutory entitlements under the Organisation of Working Time Act 1997. Secondly, as it is not in dispute that the Complainant’s pay was calculated wholly by reference to a fixed salary of €24,000 per annum, payable at €2,000 per month for an 18 hour working week that did not vary in relation to the work done by her, I am satisfied that it falls within Regulation 3(2) as being pay that is ”…calculated wholly by reference to a time rate or a fixed rate or salary or any other rate that does not vary in relation to the work done by him or her…” and find that the Respondent is correct in this respect. Thirdly, I am satisfied that as the public holidays in question all fell on either Mondays or Fridays, being days that the Complainant normally worked part thereof, albeit with no particular pattern and her pay was calculated by reference to Regulation 3(2), Regulation 5(1)(a) and not Regulation 5(2)(a) applied to her situation and the Respondent is incorrect in this respect. This means that a different method of calculation of public holiday pay applied.

In Revenue Commissioners -v- Gerard Doyle, DWT0625, the Labour Court provides useful guidance on the interpretation of Regulation 5(1)(a) where Regulation 3(2) applies to part-time work as follows:

“The employer accepts that the complainant's pay should be calculated wholly by reference to matters referred to in Regulation 3(2) of the Regulations. The Court is satisfied that the complainant is normally required to work “during any part of the day” when a public holiday falls on a Monday or a Friday, and for this reason Regulation 5 (1)(a), which covers the relevant rate, should apply in his case. This provides that the complainant should be paid the amount payable in respect of the normal daily hours last worked prior to the holiday (excluding pay for overtime).

Meaning of “normal daily hours”

The application of Regulation 5(1)(a) requires an interpretation of what is meant by the expression “normal daily hours last worked by him” as is appears in that paragraph. The term “normal daily hours” can have many shades of meaning. In the context in which it is used in the Regulations it can mean the hours routinely or regularly worked on a particular day or it can mean the hours worked on a day to which no special or particular arrangements apply. It could also mean the normal hours worked by the employee and averaged over a period of time. The Court is satisfied however that what appears not to be open on the language of the statutory provision is an interpretation which would fix an employee’s entitlement in respect of a public holiday by reference to the daily rate to which he or she would have been entitled had they worked on the day.

Having examined his contractual working pattern, the Court is satisfied that in this case a special arrangement applies to the Complainant which results in his working week - 80% of the working time of a full-time member-being spread over five days, and therefore the hours worked on Mondays and Fridays cannot be regarded as his normal daily hours.

The Court is assisted in this conclusion by the terms used in Regulation 5(1)(b) states:

(b) in any other case, the relevant rate in respect of that public holiday shall be the sum that is equal to the average daily pay (excluding any pay for overtime) of the employee calculated over—

(i) the period of 13 weeks ending immediately before that public holiday, or,

(ii) if no time was worked by the employee during that period, the period of 13 weeks ending on the day on which time was last worked by the employee before that public holiday.

Section 5(1)(b) clearly provides for the calculation of an “average” daily pay (excluding overtime pay) calculated over a set period. This averaging provision is in line with that provided in section (1)(a) also. The Court is furthermore satisfied that Regulation 5(2) and Regulation 6 “Relevant rate for certain categories of job sharers” similarly provides methods for calculating an “average” daily rate.

Therefore, the Court is satisfied that a calculation of the complainant’s rate of pay for the purposes of his public holiday entitlement in respect of public holidays which fall on Mondays and Fridays should be an average daily rate, based on his contracted working arrangement, i.e. 1/5th of his weekly rate of pay = 6.56 hours.”

The Complainant’s contract did not specify how her contracted 18 hours were to be spread out over the working week and it is common case that she determined her own working pattern. Having examined her spreadsheets for the relevant period in question, it is clear that she had no particular pattern of working hours, save than that she tended to work more hours on average on Mondays than any of the other weekdays. She takes issue only with the pay allowed in lieu of Mondays when she tended to work longer hours. This complaint relates to four public holidays falling on two Mondays and two Fridays. I am satisfied that as her pay is determined by Regulation 3(2), Regulation 5(1)(a) as opposed to 5(1)(b) (which averages out the day of the week in question for the last 13 weeks) applies for the purposes of calculating her ‘normal daily hours’. Regulation 5(1)(a) provides: “…the relevant rate in respect of that public holiday shall be the sum that is equal to the sum (including any regular bonus or allowance the amount of which does not vary in relation to the work done by the employee but excluding any pay for overtime) paid to the employee in respect of the normal daily hours last worked by him or her before that public holiday.” Therefore some form of averaging exercise is required. Applying the Complainant’s rationale, if her hours worked on Mondays for the relevant period (or for argument’s sake the 13 working Mondays preceding the two Monday public holidays in question) are averaged out, she worked +/- 6 hours on average. However, if the same exercise is conducted in relation to Fridays, she worked +/- 2 hours per day on average. Hence Mondays and Fridays balanced each other out. In my view, a more equitable outcome is achieved by applying the rationale set out in Revenue Commissioners -v- Gerard Doyle and taking an average daily rate for public holidays based upon the Complainant’s contractual arrangement to work 18 hours weekly between Monday and Friday i.e. one fifth of her weekly hours = 3.6 hours. The result is much the same and of little consequence in this particular case. Therefore and despite being arrived at by a different route, I conclude that the Respondent’s calculation of pay for 3.6 hours in lieu of the Complainant’s public holidays was correct. In any event, I am satisfied that the Respondent paid the Complainant above and beyond what she was contractually entitled upon her resignation and any possible shortfall in public holiday pay was more than negated within the ex gratia payment.

Decision:  

Section 41(4) of the Workplace Relations Act 2015 requires that I make a decision in relation to this complaint in accordance with the relevant redress provisions under the Organisation of Working Time Act 1997. For the aforesaid reasons, I find that the Complainant was paid correctly in respect of her public holiday entitlements and this complaint is therefore unfounded. Accordingly I dismiss same.

Dated:   29 November 2016