AJUDICATION OFFICER DECISION/RECOMMENDATION

Adjudication Reference: ADJ-00004965

Complaint(s):

Date of Adjudication Hearing: 06/03/2017

Workplace Relations Commission Adjudication Officer: Gerry Rooney

Procedure:

In accordance with Section 41 of the Workplace Relations Act, 2015 and Section 8 of the Unfair Dismissals Acts, 1977-2015, 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.

Background:

The Complainant was employed with the Respondent from 1^st June 1986 until 17^th May 2015 when she deemed herself constructively dismissed as a consequence of the Respondent’s alleged conduct in failing to address her concerns regarding a non-payment of her social welfare contributions throughout her period of employment, and the alleged manner the Respondent failed to redress the Complainant’s concerns to refund her the losses due to no PRSI contributions being made. The Complainant has also alleged the Respondent failed to provide her with written information on her terms of employment; and under the Organisation of Working Time Act failed to provide her with her rest and intervals at work, Public Holiday entitlements, and proper annual leave entitlements.

The Complainant worked approximately 30 hours a week for €10 per hour, initially working Monday and Tuesday bit this increased over the years.

The Complainant is a resident in Northern Ireland and works in the Republic of Ireland.

Summary of Complainant’s Case:

Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977- CA-00006988-001

The Complainant worked for the Respondent since 1986 where the Respondents are the Complainant’s sister and her sister’s husband.

The Complainant maintained that when she stated working in 1986 she was employed part-time in the kitchen for between 20 to 25 hours a week. In time this work pattern changed and increased to approximately 30 hours work per week.   Over the years, the Complainant was always paid in cash and assumed that her contributions for tax and PRSI had been paid in full.

In 2015 she made some enquiries directly with the Department of Social Protection and discovered that no PRSI contributions had been made in her name. The Complainant contended that the Respondent initially denied they failed to make the tax contributions and maintained that the tax and PRSI had been paid in respect of her employment. However, the Complainant advised that the Respondent eventually accepted no contributions had been made.

From that date the Complainant maintained that she insisted proof that the relevant contributions were being paid, and also requested that the Respondent rectify the arrears. The Respondent started paying the Complainant an extra €100 per week to address the arrears, but the Complainant maintained that this only lasted 4 weeks.

The Complainant then contended that the Respondent offered to pay her €20,000 to redress the lack of PRSI contributions. and that she could also retain her job. However, by that stage the Complainant maintained that her trust in the Respondent had been completely eroded. She had become very concerned that after working for almost 30 years there were no pension contributions made, and as a consequence she would have nothing to live on at retirement age.

The Complainant maintained that the Respondent told her that in order for her to receive the €20,000 they had offered she would have had to sign a document in front of their accountant. However, the Complainant was not clear on how the €20,000 was to be paid (e.g. up front or over a period of time), and as the extra €100 per week that had been offered had stopped she had no confidence in the proposed arrangements. She therefore was not in agreement to accept the €20,000. The Complainant maintained that she was put under undue pressure to accept the money, and she alleged the Respondent called to her home to seek her signature but she refused to sign a form or accept the €20,000. Ultimately, she felt that as nothing was being done to resolve her situation she became very stressed and sought medical advice, and in December 2015 she was certified unfit for work due to work related stress.

To support her complaint the Complainant maintained that her P60 for 2014 only showed earnings of €6,240 yet she earned over €15,000 that year. She submitted evidence to the hearing where as a Northern Ireland resident she had made a tax return to Her Majesty’s Revenue Commissioners showing the full amount she earned and this she argued supported the fact the Respondent had under declared her earnings and PRSI contributions.

As matters remained unresolved, and she was not aware of how to make a grievance about her concerns, she wrote to the Respondent in March 2016 but she did not receive a reply. As a consequence, she advised the Respondent in writing on the 17^th May 2016 that she could no longer work for them as they had not addressed any of her grievances or provided a response as to how she could progress her grievance. She therefore requested her P45 on the basis she had no alternative but to terminate her employment, and the sole reason for making this decision was due to the conduct of the Respondent in not redressing her concerns, and in refusing to resolve the matter.

The Complainant submitted that she was not currently working, and at the time of the hearing she remained on sick leave due to the stressful situation she has found herself in, and the conduct of the Respondent regarding its failure to address her concerns.

Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994-CA-00006988-002

The Complainant maintained she received no written terms and conditions of employment.

Complaint seeking adjudication by the Workplace Relations Commission under Section 27 of the Organisation of Working Time Act, Rest and Intervals At Work1997-CA-00006988-003

The Complainant maintained that she worked as a cook but received no statutory rest and intervals at work breaks on Mondays. Although she could take toilet breaks she was not afforded proper rest breaks during her working day. She confirmed that she would have received breaks on Tuesday and Wednesday, but there was no policy adhered to by the Respondent to ensure employees took their breaks. On that basis the Complainant maintained that the Respondent was in breach of Section 12 of the Organisation of Working Time Act, 1997.

The Complainant argued that as the rest periods were not provided, and where the Complainant was not allowed take her rest breaks, the Van Colson principles applied, and as such a penalty should be imposed to act as a deterrent, and this was particularly needed in light of a 2013 NERA inspection at the workplace and where the Respondent still failed to meet its obligations under the Act.

Complaint seeking adjudication by the Workplace Relations Commission under Section 27 of the Organisation of Working Time Act, 1997- Public Holiday Entitlements CA-00006988-004The Complainant maintained that as she always worked Mondays she did not receive any public holiday entitlements. She maintained that she approached the Respondent during 2015 and asked for her public holiday entitlements to be backdated but she was not provided with them

Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997- CA-00006988-005The Complainant maintained that she did not receive her annual leave entailments.

Summary of Respondent’s Case:

The Respondent disputed the Complainant’s version of events and argued that the Complainant did not work for 30 hours a week until 2015. Prior to that the Respondent maintained the Complainant only worked up to 16 hours per week.

The Respondent also contended that the Complainant was not accurate in her version of events, and that the Restaurant had been subject to a NERA inspection in 2013 where it was found at that time that no contracts of employment, no employee handbook, and no record of hours worked by staff had been maintained. The Respondent submitted that these issues had been rectified and it has been in compliance with its obligations from the 2013 NERA inspection. The Respondent maintained that the Complainant was aware of the NERA inspection because time sheets were kept after the NERA inspection.

The Respondent also submitted that the Complainant had engaged with her legal representative from December 2015, and as her complaint was not formally made to the WRC until September 2016 it should be deemed to be out of time.

Response to Complaint Under Section 8 of the Unfair Dismissals Act, 1977- CA-00006988-001

The Respondent maintained that the Complainant worked up to 22^nd December 2015 when she reported unfit for work. The Respondent maintained that the Complainant had become aware of her concerns regarding the non-payment of PRSI contributions in 2014 and therefore argued that nothing had changed during 2015 that would have warranted a constructive dismissal. The Respondent inferred it was a historical matter that it had been trying to resolve with the Complainant.

The Respondent maintained that offers had been made to resolve matters during 2015, that PRSI payments were made during 2015, and that the Complainant had taken advice at this time, and she continued working. It therefore maintained that it did not act in a way that warranted a constructive dismissal. The Respondent also maintained that due to the Complainant’s sister, who was a co-owner of the restaurant, having a stroke towards the end of 2014 the Complainant agreed to do more hours where she increased her hours to 30 hours per week during 2015. The Respondent submitted payslips and a copy of the Complainant’s P60 for the for 2015 to support this assertion.

The Respondent submitted that during 2015 it never attempted to force the Complainant to sign an agreement to accept €20,000 in settlement of the PRSI contributions. The Respondent maintained that it was advised the PRSI contributions id had not made would have amounted to between €6,000 to €7,000; and in December 2015 they offered the Complainant €20,000 to resolve the matter. The Respondent stated the Complainant’s daughter became involved in the discussions at that time and asked for more money but they were not in a position to offer more.

The Respondent argued they did all they could to resolve the matter, and as the Complainant was a sister of one of the Respondents they were anxious for a resolution, but the Complainant left before matters could be resolved. It advised that the offer of €20,000 was no longer available.

The Respondent referred to the fact that the Complainant has been unfit to work since she left and as such she would not have suffered any financial loss in earnings since leaving her job.

Response to Complaint Under Section 7 of the Terms of Employment (Information) Act, 1994 CA-00006988-002

The Respondent advised that it was in compliance with its obligations under the Terms of Employment (Information) Act, inferring that following a NERA investigation written information on the Complainant’s job was in place.

Response to Complaint Under Section 27 of the Organisation of Working Time Act, 1997 Rest and Intervals at Work-CA-00006988-003

The Respondent maintained that this complaint was out of time as the Complainant initially raised it in 2015 but did not formally make it as a complaint until September 2016. The Respondent argued that complaints should be made within six months, and as the Complainant had taken advice on the matter during 2015 there were no extraordinary reasons for a delay in making her complaint.

The Respondent maintained that the restaurant was open from 09:30 am to 8pm and the Complainant worked three days a week from 11 am until 8pm. The restaurant was busy from 12 to 2pm and from 5pm to 7pm. The Respondent therefore maintained that the Complainant would have been afforded the opportunity to take two to three breaks in the rest room and was provided with meals free of charge.

The Respondent presented work rosters that it maintained were signed by the Complainant and that indicated the hours she had worked, and where these records when completed were provided to their accountant to pay the wages. At the hearing the Complainant denied that she had signed these records, and the evidence presented indicated different signatures for the Complainant were used in the records presented to the hearing. In cross examination, the Respondent could not explain how this happened. It also acknowledged that the records did not note rest breaks provided to the Complainant, but it maintained rest breaks were in fact provided despite the absence of records being kept.

Response to Complaint Under Section 27 of the Organisation of Working Time Act, 1997 Public Holiday Entitlements - CA-00006988-004The Respondent maintained that the Complainant was provided with her public holiday entitlement as she was paid a set amount each week and this included weeks where public holidays fell and when the Complainant did not work on the public holiday.

The Respondent submitted that the Complainant was provided with her public holiday entitlements during 2015. The Respondent advised that as the Complainant did not work Mondays from May 2015 she would have been paid a full week on the weeks the public holidays fell. The Respondent therefore maintained that the Complainant received her public holiday entitlement for June, August and October 2015 as they fell on a Monday and therefore no public holiday entitlements were due. They maintained that any claims were otherwise out of time.

Response to Complaint Under Section 27 of the Organisation of Working Time Act, 1997- Annual Leave Entitlements CA-00006988-005The Respondent maintained that it did provide the Complainant with holiday pay and where the Complainant was paid €300 per week when on leave. The Respondent provided a record of payslips for 2015 and a P60 which indicated the Complainant was paid each week during 2015. However, no records were provided to confirm periods of annual leave taken.

The Respondent also maintained that the Complainant was paid for her holiday pay for 2014, and following the NERA inspection her accrued annual leave had been paid.

Findings and Conclusions:

Finding to Complaint Under Section 8 of the Unfair Dismissals Act, 1977- CA-00006988-001

The breach of a contract of employment is a very serious matter and which in cases of unfair dismissal, requires an examination of whether an employer acted fairly. This test is a demanding one involving a mix of both procedural and substantive issues. The onus falls on the employer in such cases to justify any termination. In cases where an employee breaks the contract, and then seeks to pursue the employer for constructive unfair dismissal, as in this case, the bar is set just as high. Likewise, the burden of proof, which now passes to the employee, is set at a high level.

In such cases the critical issue is the behaviour of the employer, although the employee’s behaviour must also be considered. Generally, the criterion regarding the behaviour of the employer is taken to mean something that is so intolerable as to justify the Complainant’s resignation, and something that represents a repudiation of the contract of employment. In this regard The Supreme Court has said that:

‘The conduct of the employer complained of must be unreasonable and without proper cause and its effect on the employee must be judged objectively, reasonably and sensibly in order to determine if it is such that the employee cannot be expected to put up with it.’ (Finnegan J in Berber v Dunne’s Stores [2009] E.L.R. 61).In effect the question is whether it was reasonable for the employee to terminate the contract on the basis of the employer’s behaviour.

In the case within, the Complainant has claimed she was constructively dismissed as a consequence of the Respondent’s conduct towards her when she discovered in 2014/15 that the Respondent had not paid PRSI contributions for the entire time the Complainant was employed by the Respondent i.e. from 1986 to 2014. The Complainant has submitted that during 2015 in attempting to have the matter addressed with the Respondent she became frustrated, and where she felt she was being compelled to sign a settlement agreement for €20,000 which she did not feel adequately met the shortfall in her pension contributions. She could not agree the settlement proposed by the Respondent.

It is clear from the evidence presented during the hearing that the situation had become acrimonious between the parties, and where it appears the situation was particularly difficult in light of the family relationship that existed between the Complainant and the Respondent. Whatever occurred between the parties in an attempt to resolve mattes, and there is a conflict of evidence between them with regard to such interventions, it is clear the matter was not resolved by December 2015.

Central to what occurred in this case was the failure of the Respondent to pay the Complainant’s PRSI contributions for some eighteen years. Payment of PRSI contributions is a legal obligation, but also one that every employee has a reasonable expectation their employer will make. Failure to make these payments, and in this particular case over such a long period of time, amounts to a fundamental breach of the trust that lies within the employment relationship.

It is noted that the Complainant remained in employment during 2015 where she sought to have matters rectified, and hoped that the Respondent would make reasonable efforts to address the situation. The situation was further complicated due to the family relationship that existed and where the Complainant’s sister, a co-Respondent in this case, was taken ill. As a consequence of her sister’s illness, the Complainant agreed to increase her working hours during 2015 to facilitate the absence of her sister from the workplace. Notwithstanding, her grievance regarding non-payment of PRSI contributions was not resolved during 2015.

I am satisfied, based on the evidence provided, and on the balance of probability, that the Complainant was approached and put under pressure in an attempt to have her sign an agreement to settle her claim; however, she was unhappy to agree to the Respondent’s proposal which she felt undervalued the missed contributions. This appears to have been the breaking point in the relationship, and in light of the seriousness of the situation the Complainant found herself in, it was reasonable for her to conclude that the conduct of the Respondent made her position untenable. Under these circumstances the Complainant, out of frustration, felt she had no option but to terminate her employment so she could pursue her claim.

It is noted that she made this decision following a period of sick leave between December 2015 and May 2016, and where over this time, despite being represented by a solicitor and making further attempts to have her complaint addressed, matters were not resolved. The evidence supports that the Respondent ignored the Complainant’s grievance from January to May 2016, and in particular ignored a letter from the Complainant in March 2016 seeking a resolution of matters.

Accordingly, under these circumstances I uphold that it was reasonable for the Complainant to conclude that the Respondent’s conduct, by not only failing to pay the Complainant’s PRSI contributions but in also failing to address her grievance in an appropriate way, was so unreasonable that the trust in the relationship was frustrated and could not be restored.   I therefore find that the Complainant had no option but to conclude a fundamental breach of trust had occurred, and as such I find that she was constructively dismissed.

Finding to Complaint Under Section 7 of the Terms of Employment (Information) Act, 1994 CA-00006988-002

The evidence presented does not confirm that the Complainant was provided with written information on the terms of her employment up to the time of her termination of employment on 17^th May 2016. As such I uphold that the Respondent was in breach of Section 3 of the Terms of Employment (Information) Act, 1994 in that it failed to provide the Complainant with her written statement of terms of employment, and whilst such terms may have been noted on the file after the NERA inspection in 2013, there was no credible evidence presented to confirm the written terms were provided to the Complainant. I therefore find the complaint is upheld.

Finding to Complaint Under Section 27 of the Organisation of Working Time Act, 1997 Rest and Intervals at Work-CA-00006988-003; and Public Holiday Entitlements - CA-00006988-004

Section 12 of the Organisation of the Organisation of Working Time Act, 1997 requires that:

1. An employer shall not require an employee to work for a period of more than 4 hours and 30 minutes without allowing him or her a break of at least 15 minutes; and

2. An employer shall not require an employee to work for a period of more than 6 hours without allowing him or her a break of at least 30 minutes; such a break may include the break referred to in subsection (1).

Section 21 of the Organisation of Working Time Act, 1997 provides entitlements for Public Holidays.

The Respondent argued that these complaints were out of time as the Complainant has not been working since 22^nd December 2015, and her complaint was not made until 14^th September 2016, some 39 weeks after her last day at work.

In accordance with Section 41(6) of the Workplace Relations Act, 2015 subject to subsection (8), an adjudication officer shall not entertain a complaint referred to him or her under this section if it has been presented to the Director General after the expiration of the period of 6 months beginning on the date of the contravention to which the complaint relates.

In accordance with Section 41(8) of the Act I am entitled to entertain a complaint after the expiration of six months (but not later than 6 months after such expiration) if I am satisfied failure to present the complaint within that period was due to reasonable cause.

I find that the evidence presented indicates that the Complainant, through her legal representative, wrote to the Respondent on 12^th February 2016 raising concerns regarding her grievance, and where these concerns inter alia referred to alleged breaches of the Organisation of Working Time Act, 1997 including intervals at work breaks. In this correspondence, the Complainant advised that if her grievance was not addressed she would consider pursuing her complaint to the WRC. Further correspondence from the Complainant to the Respondent on 14^th and 22^nd March 2016 also refer to her complaints.

Whilst acknowledging that the Respondent, through its legal representative, refuted the complaints on 10^th March 2016, I am satisfied that by this time the Complainant was being legally advised and represented, and from at least 12^th February 2016 was aware of her right to make a complaint to the WRC. However, she failed to make the complaints within the six months of the last alleged occurrence, circa 22^nd December 2015 for breaches under section 12 of the Organisation of Working Time Act, and circa the 1^st January 2016 for breaches of her entitlements under Section 21 Organisation of Working Time Act. Under the Workplace Relations Act 2015 the Complainant had until circa 22^nd June 2016 to raise her complaint for breaches of her rests and intervals at work, and 1^st July 2016 for breaches of her public holiday entitlements, but she did not do so until 14^th September 2016.

It has been argued by the Complainant that due to being unwell she was not in a position to make her complaint to the WRC until 14^th September 2016. However, in light of the correspondence from the Complainant in February 2016, and again two further letters the Complainant sent in March 2016, I am satisfied she was aware of her rights at this time, was clearly fit to communicate to the Respondent and instruct her solicitor, and could have made a complaint to the WRC within the time limits set out in Section 41(6). However, the complaints were not made until some eight and a half months after the alleged breaches. I do not find there is reasonable cause for a delay in her complaints of alleged breaches under the Organisation of Working Time, 1997 (regarding her breaks and public holiday entitlements) to have been submitted until 14^th September 2016. I therefore find that this complaint is outside the statutory time to be entertained, and therefore is not upheld.

Finding to Complaint Under Section 27 of the Organisation of Working Time Act, 1997- Annual Leave Entitlements CA-00006988-005The Respondent argued that this complaint was out of time as the Complainant has not been working since 22^nd December 2015, and her complaint was not made until 14^th September 2016, some 39 weeks after her last day at work.

As the Complainant’s employment did not terminate until 14^th May 2016, and as she had accrued   annual leave entitlements up to this time, I find this complaint is made within the time limits stipulated   in accordance with Section 41of the Workplace Relations Act, 2015.

The Organisation of Working Time (Records) (Prescribed Form and Exemptions) Regulations 2001 requires all employers to keep detailed records of start and finishing times, hours worked each day and each week and leave granted to employees. This Regulation is part of the Organisation of Working Time Act 1997. The employer must keep these records for 3 years.

Whilst the pay records provided by the Respondent indicate that the Complainant was paid regularly throughout the year, no records of her actual annual leave period were submitted. The pay slips provided note that holiday pay was made over three weeks, namely March, June and November 2015, and two further 8 hour periods of holiday pay were made during 2015. It is noted that the Respondent in their evidence advised the hours recorded for pay purposes were signed by the Complainant, however the evidence presented has raised reasonable doubts as to whether the Complainant had in fact signed any working hours records.

The Respondent has failed to provide a record of the actual leave provided to the Complainant, and in accordance with Section 25 of the Organisation of Working Time Act, and the 2001 Regulations, the Respondent is obliged to maintain such records for a period of three years.   Furthermore Section 25 (4) of the Act states the onus of proving, in proceedings before a rights commissioner or theLabour Court, that the said provision was complied with in relation to the employeeshall lie on the employer. Based on the evidence provided, and the absence of records other than the disputed records compiled for the basis of pay, I find that on the balance of probability the Complainant did not receive her correct holiday entitlements.

Decision:

Section 41 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.

Section 8 of the Unfair Dismissals Act, 1977 requires that I make a decision in relation to the unfair dismissal claim consisting of a grant of redress in accordance with section 7 of the 1977 Act.

Decision Regarding Complaint Under Section 8 of the Unfair Dismissals Act, 1977- CA-00006988-001 Section 8 of the Unfair Dismissals Act, 1977 requires that I make a decision in relation to the unfair dismissal claim consisting of a grant of redress in accordance with section 7 of the 1977 Act.

Having found that the dismissal amounts to Constructive Dismissal and as such was unfair, I must consider, in accordance with Section 7 of the Act, whether the Complainant should be entitled to readdress consisting of either reinstatement, reengagement; or if the employee incurred any financial loss attributable to the dismissal, payment to her by way of compensation in respect of the loss (not exceeding an amount of 104 weeks’ remuneration in respect of the employment for which she was dismissed) and is just and equitable having regard to all the circumstances.

In accordance with Section 7(2)(a) of the Act, in determining the amount of compensation payable regard should be had to the extent (if any) to which the financial loss was attributable to an act, omission, or conduct by or on behalf of the employer, and the measures (if any) adopted by the employee, or as the case may be, her failure to adopt measures to mitigate the loss of the aforesaid. In this regard whilst the dismissal was entirely attributable to the employer, and could have been avoided, and in light of the Complainant’s experiences with the Respondent where a complete breakdown in trust has occurred, I find that compensation is the most appropriate remedy.

I am also satisfied the Complainant has been on certified sick leave and where the events she experienced in work has been the causation to why she went sick. The Complainant has also maintained that she has not been available for work due to illness. If a person is unavailable for work due to factors attributable to the employer i.e. where the behaviour of the employer has caused the illness than that period of time may be taken into account in awarding compensation (Allen v Independent Newspapers (Ireland Ltd) [2002] E.L.R. 84; and Browne v Ventelo Telecommunications (Ireland) Ltd. UD 597/2001

Future loss is the loss attributable to future loss of earnings. At the time of the hearing, as the Complainant had still not found alternative work due to her medical situation, and appears unlikely to be fit for work for some time, and where I find the employed has contributed to this situation I find the Complainant’s financial loss is attributable to the employer and therefore must be taken into account when assessing future earnings.

I therefore award the Complainant compensation of €25,000.

Decision Regarding Complaint Under Section 7 of the Terms of Employment (Information) Act, 1994 CA-00006988-002

I have found that the Respondent is in breach of its obligations under Section 3 of the Terms of Employment (Information) Act, 1994. In accordance with Section 7 of the Act, I order the Respondent to pay the Complainant compensation of four weeks’ remuneration at €10 per hour based on a 30-hour week, amounting to €1,200. As this award is made as a compensation it is to be paid net.

Decision Regarding Complaint Under Section 27 of the Organisation of Working Time Act, 1997 Rest and Intervals at Work-CA-00006988-003, and Public Holiday Entitlements - CA-00006988-004

The complaints regarding intervals and breaks at work and public holiday entitlements are deemed to be out of time.

Decision Regarding Complaint Under Section 27 of the Organisation of Working Time Act, 1997- Annual Leave Entitlements CA-00006988-005I have found that the has Respondent failed to provide credible evidence and records that the Complainant was provided with her correct holiday entitlements up to and including 17^th May 2016. The Respondent is therefore in contravention of its obligations under Section 20 of the Organisation of Working Time Act, 1997.

In accordance with Section 27 of the Act, I declare the complaint is well founded and order the Respondent to pay the Complainant the sum of €1,600 for her annual leave entitlements for 2015 and up to 17 May 2015; plus €5,000.00 in compensation, i.e. a total payment of €6,210.46 must be paid to the Complainant. 

Dated:   29^th August 2017

Workplace Relations Commission Adjudication Officer: Gerry Rooney

Key Words: