ADJUDICATION OFFICER DECISION

Adjudication Decision Reference: ADJ-00002363

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

Date of Adjudication Hearing: 09/05/2016

Workplace Relations Commission Adjudication Officer: Emer O'Shea

Procedure:

In accordance with Section 41(4) of the Workplace Relations Act, 2015 [and/or Section 8(1B) of the Unfair Dismissals Act, 1977, and/or Section 9 of the Protection of Employees (Employers’ Insolvency) Act, 1984, and/or Section 79 of the Employment Equality Act, 1998, and/or Section 25 of the Equal Status Act, 2000] following the referral of the complaint(s)/dispute(s) to me by the Director General, I inquired into the complaint(s)/dispute(s) 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).

The respondent did not attend and was not represented at the hearing.The respondent left a written submission at the hearing venue.

Complainant’s Submission and Presentation:

It was submitted that the matters at issue in the case had already been before the Rights Commissioner Service and the EAT where the complaints of breaches of the Payment of Wages Act 1991 had been upheld.The chronology of hearings and investigation by the High Court was set out and it was emphasised that the High Court had referred the cases back to be reheard by the Tribunal because of the Tribunals failure to provide reasons for their determination.It was submitted that it had been highly disingenuous for the respondent to misrepresent the High Court finding on the matter.It was submitted that the Court had made no finding of fact on the matter of a contractual right or otherwise to unilaterally cut wages.

It was submitted that the employer was precluded from making the deductions from pay since May 2011 to the present day.This had been confirmed by previous Rights Commissioners decisions and the EAT. It was submitted that the imposition of a 10% pay cut constituted an illegal deduction under the Act.It was advanced that there was no substantive difference in matters for consideration in making a determination , other than the period to which the claim refers and the respective amounts now being claimed.It was contended that the respondent had neither requirement or authority to make the deductions from wages that they did , either by virtue of statute or any term of contract , express or implied , that was in force at the time of the deductions , nor had they authority to make the deductions in respect of having the written consent of the claimants.It was advanced that the respondent was paying less than that which is properly payable to the claimants under the Act.

Respondent’s Submission and Presentation:

The respondent’submission set out the backdrop to the adverse trading conditions in 2011 when the viability of the company was threatened and all of its banking facilities had been withdrawn.It was submitted that the Directors had an obligation to comply with the Companies Act which required them to use their skill and judgement to act in the best interests of the company and its employees.Having exhausted all other cost saving measures, the company were left with no option but to introduce a wage cut in May 2011.It was submitted that meetings were held with staff and the situation was fully explained.It was advanced that a genuine emergency existed at the time and that the written acceptance by employees was not required as Section 8.2 of the Handbook provides

“From time to time, these terms and conditions of employment may need to be revised , to take account of new circumstances.Such revisions may be brought about by legislation , employee request or management’s requirements and will be discussed with employees as necessary.”

It was contended that it became apparent that a minority of employees would never accept the reduction in pay and consequently management unilaterally effected the reduction – relying on the authority to do so in the handbook.An account of the respondents efforts to mitigate the reduction in wages through a Profit Sharing Scheme were chronicled in the written submission.

It was submitted that the EAT determination of Feb. 2014 was appealed to the High Court and the grounds for the appeal were set out in detail.It was contended that Justice Kearns overturned the decision of the EAT.

The respondent invoked the provisions of Bateman v Asda Stores [2010] All ER (D) 277 to support their contention that an employer can vary contractual terms through a retained power in a staff handbook.

It was submitted that 5 changes to terms and conditions of employment had been introduced in May 2011 , that the employees accepted that the company was entitled to make the other 4 changes and that it cannot be argued that an employer is entitled to make some changes but not others.It was submitted that the High Courthad utterly rejected the claim that the written consent of employees is required in order for an employer to make a deduction from wages and that the EAT had failed to provide adequate reasons for its findings.

It was contended that the Rights Commissioner Service had already accepted that notwithstanding a finding that a 10% reduction in wages had infringed the Act , no compensation was awarded to the claimant.

The company denied that it had made a deduction from wages , rather a reduction and contended that it had demonstrated that it had no option but to reduce wages – the reduction was a last resortamounting to a mere 7% of overall cost reduction.All jobs had been retained and efforts were made to mitigate the loss of earnings of employees .

Decision

On the basis of the evidence presented at the hearing , I cannot accept the respondent’s contention that the High Court overturned the EAT determination referred to above.The matter was referred back to the EAT because of their failure to provide an explanation for their findings.I understand a reconvening of the Tribunal is expected in the short term.

I have considered the submissions of the respondent with respect to the handbook and their reliance of the provisions contained therein to effect a reduction in pay. Having reviewed the terminology contained in the document I cannot accept that any compelling evidence was advanced to support their contention that it allows for the imposition of a pay cut without the consent of the employee.

In arriving at my decision , I am taking account of the EAT determinations in Hogan v HSE( PW 770/2012) and McDermott v HSE (PW 113/2012) where it was found that “ deductions being complained of were not allowances or expenses but are clearly outlined in the contract as salary.Accordingly , the non payment of this portion of the appellant’s salary is a deduction ….” It was found that the deductions were unlawful and that the claimants should be compensated.Additionally I am taking account of the judgement of Mr.Justice McDermott in the case of Sandra Cleary v Others v B&Q Ireland Limited where it was held that the refusal to pay a bonus was an unlawful deduction under the Act.In light of the foregoing I am upholding the complaint and require the respondent to pay the claimant’s the following amounts of compensation within 4 weeks of the date of this decision:

EMER O SHEA

RIGHTS COMMISSIONER/ADJUDICATION OFFICER

30 September 2016