ADJ-00003377

Adjudication Decision Reference: ADJ-00003377

Complaint(s)/Dispute(s) for Resolution:

Date of Adjudication Hearing: 27/07/2016

Workplace Relations Commission Adjudication Officer: Gerry Rooney

Procedure:

In accordance with Section 41(4) of the Workplace Relations Act, 2015 and Section 6 of the Payment of Wages Act 1991, following the referral of the complaints to me by the Director General, I inquired into the complaints and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaints.

This claim refers to an alleged unlawful deduction from wages by the respondent on three separate occasions contrary to Section 5 of the Payment of Wages Act, 1991.  

The Claimant is employed with the Respondent since 3^rd June 2014 as an Equipment Technician. His gross pay is €2,2278 fortnightly.

Attendance at Hearing:

Complainant’s Submission and Presentation:

The Claimant advised that he has received a Court Order which orders an attachment to his earnings and that the Respondent has incorrectly applied this attachment. The Claimant alleges this occurred on three separate occasions.

The Claimant further maintained that he has attempted to have the matter addressed through the Respondent’s grievance procedures but to no avail.

Complaint CA-00004855-001

The Claimant maintains that on the 13th of August 2015 the Respondent unlawfully deducted €119 from his wages. The Claimant contended that the deductions required are clearly stated in the Court Order and that the Respondent failed to follow the correct procedure. The Claimant argued that the attachment of earning order does not allow for the Respondent to take arrears from his income and therefore the deduction was not made in accordance with the determination of the appropriate authority and as such the Respondent incorrectly interpreted the Court Order.

Complaint CA-00004855-002

The Claimant maintains that on the 3rd December 2015 the Respondent again unlawfully took a deduction of €225 from his wages. The Claimant contended that the deductions required are clearly stated in the Court Order and that the Respondent failed to follow the correct procedure in deducting the sum of €225 from his wages.

In his evidence the Claimant advised that he met with the respondents HR support on 8^th December 2015 to address his concerns and where he raised a grievance which were dealt with as a Level 3 investigation. A further meeting took place on 14^th December 2015 with the Factory Manager in accordance with the grievance procedures and the Claimant got a response of the company’s decision on 4^th January 2016 which was not satisfactory to the Claimant in that the Respondent concluded it had done nothing wrong

Complaint CA-00004855-003

The Claimant maintains that on the 11 February 2016 the Respondent again unlawfully deducted €400 from his wages. The Claimant argued that the Attachment of Earnings Order does not allow for the Respondent to take arrears from his income. The Claimant argued that the deduction was not made in accordance with the determination of the appropriate authority and the Respondent incorrectly interpreted the Court Order unlawfully deducting €400 from his wages. This amounted to a net payment of €241 which the Claimant argued was contrary to the court ordered attachment which instructed he was not to be left with less than €300 in his wages.

In relation to this complaint, the Claimant advised that on 28^th January 2016 he had a further meeting with the Factory Manager where he was informed another €400 was to be deducted from his wages and as it was a legal matter he had no right to appeal.

On 3^rd February 2016 the Claimant sent an email to the Factory Manager requesting the €400 deduction was not to be made, and the Claimant further advised the Respondent that they would be receiving correspondence from the Claimant’s solicitor. The Respondent advised the Claimant on the same day that there were no further steps of appeal on the matter.

On 10^th February 2016 the Respondent advised the Claimant that the €400 deduction would be taken from his wages in the next pay run.

On 20^th June 2106 the Claimant attended an appeal meeting to his grievance, and the outcome of that appeal was that the Respondent did not uphold the appeal and where it advised the Claimant that it had to deduct payments from his salary in accordance with the court order. The Claimant   was also advised that there is no obligation on the Respondent to advise the Claimant of this matter as he would have received a copy of the court order himself directly from the Court.

Respondent’s Submission and Presentation:

The Respondent submitted that it did not unlawfully make deductions from the Claimant’s wages. The Respondent maintained that the deductions were lawful and were based on maintenance orders received from the District Court, and thus the Respondent in making the deductions was in compliance of its legal obligations in accordance with the District Court orders.

The Respondent also submitted that the Adjudication Officer has no jurisdiction whatsoever to hear the complaint given that the deductions were made on clear and concise instructions of the District Court. On foot of such orders the Respondent maintained such deductions are clearly excluded under Section 5 of the Payment of Wages Act, 1991. The Respondent further contended it was obliged to comply with the legally binding order of the Court.

The Respondent also argued that under section 6 (4) of the Payment of Wages act 1991, a complaint should not be entertained “unless it is presented to him within the period of six months beginning on the date of the contravention complaint relates”. The Respondent argued that the complaint was presented on 26 May 2016 and as it relates to the period 27^th November 2015 to 26 May 2016 that the Claimant has in fact attempted to include deductions from his salary outside of this timeframe. The respondent argued therefore that the alleged unlawful deduction 13^th August 2015 is out of time as that claim was not presented to a the WRC within six months of the date of the deduction, that being 13 August 2015 and therefore the Adjudication Officer has no jurisdiction to hear the claim.

The Respondent also argued that, in relation to the notice of the deductions in question, there is no requirement under the Act to provide minimum notice of the deduction or indeed any notice of deduction where the employer is obliged to make deductions in accordance with an Order of the Court under section 5 (g) and/or in accordance with section 5 (1) (a) of the Payment of Wages Act 1991.

Complaint CA-00004855-001

The Respondent submitted that it received an “Attachment of Earnings Order” made under the Family Law (Maintenance Of Spouses And Children) Act 1976. The Respondent maintained this order, dated 27 July 2015, stated that the Claimant had been ordered to pay support for two dependent children and where the original Court Order had been made on 30^th of July 2014. This provided the payment of a weekly sum of €119, and payment of two annual sums the “first payment in the sum of €400 to be paid on or before 1^st September each year commencing on 1^st September 2014 and the second payment in the sum of €300 to be paid on or before 10^th of December each year commencing on 10 December 2014”. The Respondent maintained that it learned about the Court Order on 6^th August 2015 and that the Claimant had been served with a summons relating to these payments as it had not been paid by the Claimant in accordance with the 2014 Court Order. In an order dated 27 July 2015, the Respondent was ordered by the Court to deduct sums from the Claimant’s earnings commencing 31^st of July 2015 as per the original Court Order. In this regard the Respondent maintained that it was ordered to transmit the said sums to a named recipient and further outlined that the protected earnings rate was €300 per week “below which the earnings should not be reduced by reason of this order”. The Respondent therefore submitted that it duly complied with this order.

The Respondent explained it operates a fortnightly payment cycle with payment of wages in arrears. In order to comply with the Court Order, the Respondent deducted two weekly payments from each fortnightly salary payment to the claimant. It was on this basis the sum of €119 deducted every week from claimant’s earnings, which included the €119 deduction on 12^th August 2015.

Complaint CA-00004855-002

The Respondent submitted that on 24^th November 2015 it received a further “Attachment of Earnings Order” where a named recipient of the payments applied to the Court regarding the original Court Order seeking an amendment to reflect annual lump sum payments. The Respondent maintained that second Court Order dated 23^rd November 2015 advised that lump sum payment of €400 to be paid by 1 September each year for school expenses and the lump sum payment of €300 to be paid by 10 December each year in support of Christmas expenses. The Respondent submitted that the Court ordered the lump sum payments be paid as follows: four weekly payments of €100 each in the month August plus the weekly maintenance in the sum of €119 amounting to €219 per week for four weeks in August each year and four weekly payments of €75 in the month of November plus weekly maintenance in the sum of €119 totalling €194 per week of the four weeks November each year.

The respondent submitted that it duly complied with this order and amended the deductions for the claimant’s pay, and on 3rd December 2015 a deduction of €776 was made which included the November 2015 lump sum deduction of €300. The respondent therefore contended that the €225 payment in December 2015 was in accordance with the Court Order.

Complaint CA-00004855-003

The respondent submitted that in correspondence dated 22^nd January 2016 the solicitor acting on behalf of the named recipient of the payments ordered in Court wrote to the Respondent stating that the August lump sum payment had not been made and requested that the respondent should bring the arrears up to date. The Respondent also acknowledged receiving correspondence dated 3^rd February 2016 from a solicitor acting for the Claimant in which the Claimant alleged the Respondent, applied the Court Order incorrectly.

The Respondent maintained that the Claimant submitted an internal grievance relating to the payments and pursued this grievance through the company procedure where the final outcome of the grievance did not uphold the claimant’s complaint.

In February 2016 the Respondent maintained it altered the deductions in order to apply the August 2015 deduction, and therefore on 11^th February 2016 a deduction of €638 was made which included a €400 lump sum for the August 2015 payment.

In response to the complaint that the Claimant’s weekly pay was reduced below €300 in February 2016, the Respondent submitted that at that time the Claimant chose to put 100% bonus payment into the Respondent’s profit sharing scheme and this was a separate transaction to the Court Order which in fact brought the Claimant’s wages below €300. The Respondent maintained therefore it did not make an unlawful deduction of wages. The Respondent submitted that this is a voluntary payment by the Claimant to put 100% of his bonus into its approved profit sharing scheme and when an employee of ops to do this the payroll system deducts PRSI, USC, and in the Claimant’s case a portion of his salary was also invested into the company’s share purchase plan. The Respondent therefore argued that it was the Claimant’s decision to invest his wages in such a manner that caused the salary to fall below €300, and not the deduction in accordance Court Order.

Decision:

Section 41(4) of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaints in accordance with the relevant redress provisions under Schedule 6 of that Act, and whether there has been a breach of Section 5 of the Payment of Wages Act 1991.

Section 5(1) of the Payment of Wages Act 1991 required that an employer shall not make a deduction from the wages of an employee (or receive any payment from an employee) unless—

1. the deduction (or payment) is required or authorised to be made by virtue of any statute or any instrument made under statute,

2. the deduction (or payment) is required or authorised to be made by virtue of a term of the employee's contract of employment included in the contract before, and in force at the time of, the deduction or payment, or

3. in the case of a deduction, the employee has given his prior consent in writing to it.

Section 5 (5(g) of the Act states that nothing in this section applies to a deduction made by an employer from the wages of an employee where the purpose of the deduction is the satisfaction (whether wholly or in part) of an order of a court or tribunal requiring the payment of any amount by the employer to the court or tribunal or a third party out of the wages of the employee.

Complaint CA-00004855-001

Having reviewed the evidence presented I am satisfied that the deductions of wages on 13^th August 2015 were for the purpose of satisfying a Court Order in relation to family maintenance requirements, and as such they are not found to have been unlawful.

Complaint CA-00004855-002

Having reviewed the evidence presented I am satisfied that the deductions of wages on 3^rd December 2015 were for the purpose of satisfying a Court Order in relation to family maintenance requirements, and as such they are not found to have been unlawful.

Complaint CA-00004855-003

Having reviewed the evidence presented I am satisfied that the €400 deduction of wages on 11^th February 2016 was for the purpose of satisfying a Court Order in relation to family maintenance requirements, and as such they are not found to have been unlawful.

However, I have also considered that the Claimant’s income fell below the €300 threshold on 11^th February 2016 due to the deductions that occurred on that date. Whilst acknowledging the deductions were made to satisfy a Court Order, additional deductions were also made to pay the Claimant’s contribution to a voluntary profit sharing scheme. This deduction is also lawful in that it was consented by the Claimant by virtue of the fact that he had sanctioned the payment of 100% of his bonus to the scheme.

It is also clear from the evidence that the Respondent was late in paying the August 2015 court order, and paid that in February 2016. However, even allowing for this payment the Claimant would not have fallen below the €300 threshold but for the fact that his profit sharing contribution was also deducted at that time. Whilst acknowledging that the combined deductions in February 2016 were hard on the Claimant, and perhaps the deduction of payments for the profit sharing scheme might have been handled more sensibly by the Respondent, I am nonetheless satisfied that all the deductions were lawful.

Therefore, I do not uphold that the Respondent has breached the Payment of Wages Act, 1991, and the claim must therefore fail.

Dated:   7^th November 2016