ADJUDICATION OFFICER DECISION

Adjudication Decision Reference: ADJ-00000280

Complaint for Resolution:

Date of Adjudication Hearing: 12/07/2016

Workplace Relations Commission Adjudication Officer: Pat Brady

Procedure:

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(s)/dispute(s).

Complainant’s Submission and Presentation:

The complainant commenced employment with the respondent on the 1st January 2009 in a permanent, full time capacity as an Industrial Relations Executive

A copy of her terms and conditions of employment were exhibited and she stated that these were the basis of her contract of employment with the respondent.

She was a member of the respondent pension scheme and pays contributions as part of this membership. Her contract of employment explicitly defines her pension contribution as being 1.5%.

Following legislative changes in the UK and Northern Ireland to Public Sector pensions schemes it was decided to apply these to her.

She was informed by the respondent that her monthly contributions would increase from 1.5% to 5.45% of pensionable pay from the 1^st April 2015 with substantially poorer pension benefits. She objected to this increase and drew the respondent's attention to her contract of employment, which, as noted, makes reference to the rate of contribution being 1.5%.

Following this, the respondent made deductions from her monthly salary at the increased level, commencing in April 2015. The complainant submitted pay slips from the preceding month and from this month to show that the amount deducted increased by €160.34, from €60.89 to €221.23.

The complainant states that the additional amount deducted is unlawful and she does not accept the respondent's submission that it is a deduction “required by law”.

At the adjudication, the complainant submitted legal opinion (which was submitted in a previous case on the same facts) 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 noted 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.

The complainant’s submission was that 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.

The complainant says 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.

The complainant also relies on a supplemental legal submission dated March 24^th 2016, (in respect of ADJ 254) where it was state 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, neither is it a statutory instrument.

While acts to implement the Belfast Agreement, as an international agreement, are valid, they do not have the status of statutory instruments or statutes unless specifically incorporated into an Act of the Oireachtas.

The British-Irish Agreement Act, 1999 permits the making of regulations for matters arising from the Act, but no such regulation has been adopted relevant to this complaint.

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 the exemption in 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.

She is challenging the increase in her contributions from 1.5% of pensionable pay to 5.45% of pensionable pay; an increased deduction of €160.34.

Respondent’s Submission and Presentation

The respondent was represented by its ‘parent’ civil service department which stated that the North/South scheme was a statutory scheme and although the respondent was not one of the Implementation Bodies specified in the founding legislation, the British-Irish Agreement Act, 1999, it had subsequently opted to be included.

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.

The respondent outlines that in February 2015, at a meeting of the North-South Ministerial Council, the Irish Minister for Public Expenditure and Reform and the Northern Ireland Minister for Finance and Personnel formally agreed amendments to the pension scheme, increasing the contributions made by members.

This was the sixth time an amendment was made to the scheme and it is the most significant. It is referred to as Amendment no. 6 Scheme and it came into effect on April 1^st 2015 and provided for a change in contribution rates which in the complainant’s case resulted in an increase from 1.5% to 5.45%, an increase of 3.95%

The amendment was agreed by the relevant Ministers, North and South and was formally agreed by the North South Ministerial Council.

Attempts were made to achieve an industrial relations settlement of the matter at a conciliation conference at the (then) Labour Relations Commission.

It was agreed that Republic of Ireland members of the scheme, including the complainant in this case would be given a choice and could either opt for the ‘old’ or the ‘new’ scheme.

There was a requirement that they do so by March 31^st 2015, or in the absence of a decision to opt would, by default remain in the amended North South scheme with the higher rates.

The respondent accepted that the complainant had indicated her objection to the proposed change but had not done so on the official form required.

The respondent says that the adoption of the scheme by the relevant Minister is ‘in effect’ the implementation of a statutory provision and that the definition of ‘statute’ in the Statutory Instruments Act, and an order, regulation, rules, scheme or bye law.

The respondent submits that the scheme can be termed a statutory provision and refers to the definition of the expression “statutory instrument” in the Statutory Instruments Act, 1947. It states that a scheme made in exercise of a power conferred by statute; viz the British Irish Agreement Act 1999 is a statutory instrument.

On this basis it says that it is entitled to make the increased deductions from 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 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.

The 1999 Act allows for the provision and maintenance of a pension scheme (by the implementation bodies) and therefore any scheme made on foot of this provision would be termed a 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.

In supplementary submissions in respect of the complaint made under ADJ 254, 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 and is a ‘presentational matter’.

The respondent also outlined there that there must be a statutory basis for the expenditure of any public monies on a pension scheme and that the 1999 Act provided this authority for the North-South Pension Scheme.

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.

Findings and Conclusions:

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 was 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 whether the pension scheme and the decision to increase the complainant’s contribution fall within the definition of “statutory instrument” as provided for by the Act of 1947.

There have been a number of identical cases on the facts in this case with different complainants.

I have issued a decision in which I found for the respondent on the basis of the arguments set out in respect of the powers being exercised under the various cross border legislative enactments giving the decision the standing of a statutory instrument.

This is the issue on which the case turns.

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.

Since then a fellow adjudicator heard another case in the sequence with the benefit of significant new legal submissions on both sides, both at and subsequent to the hearing.

He found for the complainant in ADJ 254. He noted that earlier decisions were not binding on him ‘in particular where there may have been different facts and also due to the more detailed submissions made by the parties’.

His reasoning there was as follows.

The ‘Belfast’ Agreement (note that this refers to the actual agreement as distinct from the ensuing statute) and the annexes do not have the force of law (on the authority of the Supreme Court in O’Neill v The Governor of Castlerea Prison, see below)

Secondly, he addressed in some detail the question of whether the provision meets the definition of a statutory instrument, or as it was submitted in this hearing is ‘in effect’ a statutory instrument.

In this regard he had before him the submission of counsel for the complainant to the effect that the agreement between the British and Irish governments establishing the Implementation bodies did not have the power of statute in the Republic of Ireland. He decided to accept that as a correct interpretation of the law and so do I.

In my earlier decision I did not have the benefit of these submissions but I regard them as having decisive significance and I have considered them independently and on their merits.

Having had the benefit of reading ADJ 254 before the hearing I drew it to the parties’ attention at the hearing of this complaint; notably to the respondent’s attention to give every opportunity to address the legal arguments which influenced the decision in ADJ 254.

It had nothing to add to the submission made in relation to ADJ 254 which I also considered. I reproduce below the assessment of the submissions in that case, all of which were laid before me.

For example, in its legal response in ADJ 254 the respondents submitted the British Irish Agreement Act fulfills the criterion in section 1 (1 (d) of the Statutory Instruments Act that it is ‘an Act of the Oireachtas..’

But the submission made by the complainant in both ADJ 254 and this case is that an annex to the British Irish Agreement, although appended to the British-Irish Agreement Actdoes not form part of the statute and therefore other ’enactments’ made on the foot of it do not have statutory effect, although they may be valid otherwise.

The respondent has relied on that annex to argue the status of the decision regarding the pension to be ‘in effect’ a statutory instrument. (The phrase ‘in effect’ is somewhat ambiguous in this context and could mean either ‘roughly equivalent to’ or ‘in terms of its impact, outcome or effect’; in my opinion neither definition meets the requirements of the exemption in the Payment of Wages Act).

On the question 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.

I refer to the following in the decision in ADJ 254.

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.

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.”

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).

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.

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.

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.

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.

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.

I accept this reasoning, and on the basis of the largely identical facts in this case find it to be fully applicable in reaching my decision

Decision:

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.

The additional deductions of 5.45% 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.

I uphold complaint CA-00000441-001 and the respondent shall reimburse the complainant the amount of €160.34 for April 2015 and for all amounts subsequently unlawfully recovered.

Dated:  13/10/2016