ADJUDICATION OFFICER DECISION

Adjudication Decision Reference: ADJ-00003524

Complaint for Resolution:

Date of Adjudication Hearing: 29/08/2016

Workplace Relations Commission Adjudication Officer: Aideen Collard

Procedure:

Following receipt of a complaint under Section 39 of the Redundancy Payments Act 1967 (as amended) by the Workplace Relations Commission (hereinafter ‘WRC’) on 13^th June 2016, seeking redress for the underpayment of statutory redundancy 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. The Complainant represented herself and a Director of the Respondent attended at the hearing on 29^th August 2016 on its behalf. I outlined the relevant provisions of the Act and possible consequences of a decision in relation to any other potential claims in lay terms. The Complainant confirmed that she had received advice and was happy to proceed with this complaint.

Complainant’s Submission and Presentation:

The Complainant confirmed that she had been employed by the Respondent for over eight years as an Accountant. She had initially worked full-time hours for approximately six and a half years from 18^th February 2008 until 1^st September 2013. From 2^nd September 2013 until she was made redundant on 31^st May 2016, she had worked reduced hours (from 35 to 25 hours per week) at her own request to facilitate her childcare arrangements. The reduction in hours was confirmed in a written addendum to her contract of employment with the Respondent as furnished and referred to as a ‘temporary agreement’ and subject to review depending on changing business needs. It had been extended by mutual agreement at various intervals up until the date of redundancy. When the Complainant was made redundant on 31^st May 2016, the Respondent paid her statutory redundancy at her reduced salary being €515.12 gross per week for the full period of her service, totalling €9054.22. She confirmed that figure was her correct gross weekly salary at the material time.

The Complainant confirmed that she had always intended going back full-time when her children were in school from September 2016. Whilst she took no issue with the redundancy itself, she felt that she should have been paid at the statutory ceiling of €600 gross per week to take into account her full-time salary which would have exceeded this rate. In circumstances where she had worked for the Respondent full-time for six and a half years and had intended on returning to work full-time, she contended that it was unfair that her redundancy payment was based on her reduced salary. In support of her position, she relied upon the following information from the Welfare.ie website:

“Reduced hours and short-time work

If you were made redundant within a year of being put on reduced hours or pay, your redundancy payment would be based on your earnings for a full week. If you are made redundant after working reduced hours for more than a year, how your payment will be calculated depends on whether you accepted being on reduced hours or not. If you fully accepted the reduced working hours as your normal week and never asked to return to full-time work, then your redundancy payment will be based on your gross pay for the reduced working hours. If, on the other hand, you never accepted the reduced working hours as your normal hours and continually asked to be put back on full-time working, your payment would be based on your normal weekly earnings.

If you have been put on short time and then are made redundant your redundancy payment may be based on your pay for a full week.

If you have a dispute about this with your employer you could make a claim to the Workplace Relations Commission.”

The Complainant interpreted this information as confirming that if she had not accepted that her reduced working hours were a permanent arrangement, then her statutory redundancy payment should have been calculated based upon her prior full time weekly earnings. In other words, she felt that as her reduced working hours was a temporary arrangement with the intention of returning to work full-time, she had never accepted them as her normal weekly hours. When questioned, she accepted that albeit temporary, the reduced working hours were by mutual agreement.

The Complainant took no issue with her other statutory payments received from the Respondent.

Respondent’s Submission and Presentation:

The Director for the Respondent confirmed the aforesaid employment history for the Complainant and furnished the calculation of her statutory redundancy payment. He confirmed that her reduced working hours from 2^nd September 2013 and existing at the date of her redundancy on 31^st May 2016 were by mutual agreement at her request to facilitate her childcare arrangements. He further confirmed that in accordance with the rules for calculating statutory redundancy, the Complainant’s payment was based upon the gross weekly salary for her reduced hours which was €515.12. Accordingly, she had received two weeks gross pay per year of service at €515.12 per week for a period of 8 years and 15 weeks service plus one bonus week’s gross pay totalling €9054.22. He further contended that she had misinterpreted the rules and information in relation to reduced working hours and would only have been entitled to payment based upon her full-time weekly salary if the reduction in hours was not voluntary and in the instant case they had been at her own request.

Findings & Conclusions:

It is necessary to examine the relevant legislation in light of the aforesaid facts to confirm whether the Complainant was paid her correct statutory redundancy under the Redundancy Payments Act 1967. Paragraph 13 of Schedule 3 to the Act provides the definition of ‘normal weekly remuneration’ as “…earnings (including any regular bonus or allowance which does not vary in relation to the amount of work done and any payment in kind) for his normal weekly working hours as at the date on which he was declared redundant, together with, in the case of an employee who is normally expected to work overtime, his average weekly overtime earnings as determined in accordance with paragraph 14.” Therefore the applicable salary for the purposes of calculating statutory redundancy is that existing on the date which the Complainant was declared redundant.

I also obtained clarification as to the basis for the information on Welfare.ie as relied upon by the Complainant from the Department of Social Protection. It was confirmed that it is the Department’s practice to calculate statutory redundancy based upon full-time weekly earnings where an employee is on reduced working hours for less than a year beforehand or if in excess of a year, not on a voluntary basis. It was also confirmed that in the latter case, it requires evidence that the reduced hours was not voluntary. This is to mitigate any unfairness to employees on forced reduced hours.

I am satisfied that the Complainant was on reduced working hours for in excess of a year as at the date she was declared redundant by agreement with the Respondent based upon her own evidence. This is not negated by the fact that she intended to return to work full-time in the future. It appears that she misinterpreted the online information in this respect and the timing of the redundancy was also unfortunate. Applying the relevant statutory provisions and practice as set out above, I am satisfied that the relevant weekly salary for the purposes of calculating statutory redundancy was that applicable on 31^st May 2016. Therefore, I find that it was correctly calculated based upon her reduced weekly gross salary, being her normal weekly remuneration at the material time.

Decision:

Accordingly and for the aforesaid reasons, I dismiss this claim as not being well-founded.

Dated: 5^th October 2016