ADJUDICATION OFFICER DECISION

Adjudication Reference: ADJ-00005912

Complaint:

Date of Adjudication Hearing: 17th February 2017

Workplace Relations Commission Adjudication Officer: Kevin Baneham

Procedure:

On the 12^th November 2016, the complainant referred a complaint to the Workplace Relations Commission pursuant to the Payment of Wages Act. The complaint was scheduled for adjudication on the 17^th February 2017. The complainant was in attendance at the adjudication and he was represented by Roland Rowan, BL. The Head of HR attended for the respondent and it was represented by IBEC.

In accordance with Section 41 of the Workplace Relations Act, 2015 following the referral of the complaint to me by the Director General of the Workplace Relations Commission, 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.

Background:

The complainant worked for the respondent between the 9^th October 2013 and the 14^th October 2016. He was paid €3,263 per month. He asserts that the respondent made an unlawful deduction of €1,461 from his final pay. The respondent asserts that it was entitled to deduct this amount to recover a contribution it made for a Masters course completed by the complainant shortly before his employment ended.

Summary of Complainant’s Case:

The complainant began working for the respondent on a three-year fixed term contract in October 2013, to expire on the 8^th October 2016. During this time, he undertook a Masters course at a named third level institution and received a contribution of €3,000 from the respondent. After the complainant’s employment with the respondent ended, the respondent relied on a clawback to deduct €1,481 from the wages due to the complainant. No notice had been provided to the complainant and the deduction had been done in an unreasonable fashion. The complainant submitted that the monies were not due and owing to the respondent. In interpreting the contract of employment, the requirement was that monies would be owed to the respondent if the complainant left respondent’s employment within 12 months of the completion of the course and the end of the contract.

The complainant outlined that the former Head of HR told him that he would have to pay back the contribution if he ended the contract or if he was let go. The Masters course came to an end in June 2016 and he graduated in October 2016. In respect of his employment with the respondent, the complainant said that he had not received any indication in September 2016 whether his contract would be extended. He sought and obtained alternative employment. He stated that his line manager insisted that he submit a letter of resignation and work four weeks’ notice. This is what was discussed at the meeting of the 29^th September 2016 but he had not been offered a new contract at this meeting. He stated that the letter dated the 7^th October 2016 had been handed to him on the 10^th October 2016. He had asked why it had been dated the 7^th October and the respondent replied that it was because he had been out that day. He denied this and said that he had worked late that Friday.

In reply to the respondent, the complainant said that he had not been in work on the 6^th October 2016 as he did his driving test. He was in work on the 7^th October 2016 as it was an important day. He had a 9am meeting with the respondent CEO. He was in work at 7am on the 10^th October 2016 as he had to complete a named project. He finished his employment on the 14^th October 2016. The complainant submitted that even if the monies were recoverable by the clawback, this did not mean that the respondent could deduct wages. The complainant had objected to the deduction on the 11^th October 2016 and had not given his consent. The complainant asserted that a conjunctive interpretation should be given to the contractual term and that he left at the end of the contract and not before the end of the contract. The complainant had asked the former Head of HR whether he would have to pay back the contribution if his contract ended without being extended. He stated that the meeting of the 29^th September 2016 had taken place at his request. He had only started looking for work in September 2016 and applied for a particular role in mid-September and was offered the role on the 26^th September 2016. He had not been told of the efforts to secure funding for an extension to his contract. It was submitted that an additional clause had been put into the respondent letter setting out an entitlement to bursary. The policy may have been on the intranet, but it was not given to the complainant. He said that he had an issue with changes to his role, moving away from policy to projects.

The complainant exhibits his letter of offer of the 3^rd October 2013 and the fixed term contract for the period of the 9^th October 2013 to the 8^th October 2016. It states that the Unfair Dismissals Acts do not apply to the termination of the contract where such termination is by reason only of the expiry of the fixed term. The respondent granted support of 30% of the tuition fees. The letter of the 3^rd September 2014, countersigned by the complainant, states as follows in relation to reimbursement of fees:

            “The staff member will be required to undertake to return fees   reimbursed/advanced in full/part, such amount to be determined at the       discretion        of the [named manager], in the event of:-

• Non-completion of a year of the course, whether through non-attendance or being unsuccessful at examination, or

• Leaving the [respondent] prior to a) completing twelve months following the academic year/course period and b) contract end date.”

  On the 4^th October 2016, the complainant sent an email to the respondent where he said “Following on from conversations last week, I would like to formally inform the [respondent] that I am not seeking to renew my contract which is due to expire October 8 2016.”

  In his letter of the 11^th October 2016, the complainant said that as of the last week of September 2016, he had not been informed whether his contract was to be renewed. He states that the respondent is not entitled to recover the bursary as the respondent had not extended his contract or made an offer of extension. The last pay slip furnished to the complainant is in the amount of €1,195.77 net, made up of salary of €1,501 and annual leave of €1,801.20 and the deductions include the bursary deduction of €1,481.

Summary of Respondent’s Case:

The respondent submitted that the complainant had tendered his resignation on the 27^th September 2016 and that the offer of renewal had been made on the 29^th September 2016. The complainant had a fixed term contract that was due to expire on the 8^th October 2016 and not on the 29^th September 2016. The respondent had been able to secure funding at the last minute to preserve the role. The respondent stated that there had been conflict between the complainant and the line manager. There had also not been a Head of HR for six months, and there had only been a HR assistant. The respondent submitted that significant efforts had been made to secure funding to extend the complainant’s contract, but this was not communicated by the line manager to the complainant. A colleague had handed the letter to the complainant on the 10^th October 2016 as the complainant had taken a day’s annual leave on the previous Friday in order to attend a wedding. The respondent outlined it had drafted a written agreement to allow the complainant undertake the course. It has only deducted half of the amount due as this was reasonable. The respondent stated that it was a publicly funded body, subject to the Comptroller and Auditor General. The post occupied by the complainant was funded by a Government Department.

In reply to the complainant, the respondent said that it was normal to secure funding late in the day to renew contracts, but the complainant had not raised this issue with his line manager. The HR Manager outlined that she began her role in October 2016. In respect of the respondent Study Scheme, the only way for the clawback to happen was by way of a deduction. The auditors would not be happy with outstanding shortfalls.

The respondent exhibits the respondent Study Scheme Policy and this provides that the employee undertakes to refund fees reimbursed/advanced in the event of “leaving the [respondent] prior to completing twelve months service following the academic year/course period, in respect of which payment has been made.”

The respondent exhibits an email chain between the Chief Executive and the acting Head of Division, which indicates that the complainant informed the acting Head of Division that he found a new role on the 27^th September 2016. The respondent exhibits a memo of a meeting of the 29^th September 2016, at which the complainant was informed that his contract would be extended. It refers to the respondent’s intention to inform the complainant of this and refers to the absent head of HR and communication difficulties with the line manager.

In correspondence of the 7^th October 2016, the respondent acknowledges the complainant’s email of the 4^th October 2016 and states:

            “You were in receipt of an education bursary of €5,925 for a two year part-time           MSC … on the premise that funds would be reimbursed to the [respondent] should       you leave the [respondent] within one year of completion of the course.

            Only half of the 2^nd year bursary (€2,962) shall be deducted from your final pay in        October - €1,481. The remaining €1,481 is payable to the [respondent] by 15^th         December 2016 in line with auditing requirements.”

Findings and Conclusions:

The complainant asserts that the deduction made by the respondent of €1,481 in his last pay slip was an unlawful deduction pursuant to section 5 of the Payment of Wages Act. The respondent denies the claim and asserts that it was entitled to deduct this amount to recover part of the contribution it made to a Masters qualification completed by the complainant.

Section 5 of the Payment of Wages Act regulates certain deductions made to the pay of an employee. The relevant parts of section 5 are:

“5.— (1) An employer shall not make a deduction from the wages of an employee (or receive any payment from an employee) unless— … (b) 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,

… (2) An employer shall not make a deduction from the wages of an employee in respect of— …

(b) any goods or services supplied to or provided for the employee by the employer the supply or provision of which is necessary to the employment, unless— (i) the deduction is required or authorised to be made by virtue of a term (whether express or implied and, if express, whether oral or in writing) of the contract of employment made between the employer and the employee, and (ii) the deduction is of an amount that is fair and reasonable having regard to all the circumstances (including the amount of the wages of the employee), and (iii) before the time of the act or omission or the provision of the goods or services, the employee has been furnished with— (I) in case the term referred to in subparagraph (i) is in writing, a copy thereof, (II) in any other case, notice in writing of the existence and effect of the term, and (vi) in case the deduction is in respect of goods or services supplied or provided as aforesaid, the deduction is of an amount not exceeding the cost to the employer of the goods or services, and (vii) the deduction or, if the total amount payable to the employer by the employee in respect of the act or omission or the goods or services is to be so paid by means of more than one deduction from the wages of the employee, the first such deduction is made not later than 6 months after the act or omission becomes known to the employer or, as the case may be, after the provision of the goods or services. … (5) Nothing in this section applies to— (a) a deduction made by an employer from the wages of an employee, or any payment received from an employee by an employer, where— … (i) the purpose of the deduction or payment is the reimbursement of the employer in made (for any reason) by the employer to the employee, and (ii) the amount of the deduction or payment does not exceed the amount of the overpayment, (6) Where— (a) the total amount of any wages that are paid on any occasion by an employer to an employee is less than the total amount of wages that is properly payable by him to the employee on that occasion (after making any deductions therefrom that fall to be made and are in accordance with this Act), or (b) none of the wages that are properly payable to an employee by an employer on any occasion (after making any such deductions as aforesaid) are paid to the employee, then, except in so far as the deficiency or non-payment is attributable to an error of computation, the amount of the deficiency or non-payment shall be treated as a deduction made by the employer from the wages of the employee on the occasion.

The complainant worked for the respondent over the course of a three-year fixed term contract. This contract included a standard clause to exclude the application of the Unfair Dismissals Act where the termination of the contract is due only to the expiry of the fixed term. In September 2014, the respondent made a 30% contribution to assist the complainant undertake a Masters programme, which he completed in 2016. It is not clear why the wording of the clause to allow the respondent recover the contribution differs between the respondent Study Scheme Policy and the letter of the 3^rd September 2014. The relevant part of the policy states “leaving the [respondent] prior to completing twelve months service following the academic year/course period, in respect of which payment has been made.” The relevant part of the letter quotes the policy as being “Leaving the [respondent] prior to a) completing twelve months following the academic year/course period and b) contract end date.” The letter of the 3^rd September 2014 does not address what would happen should the complainant’s contract not be renewed in October 2016.

The complainant stated that when he was not told by late September 2016 whether or not his contract was to be extended, he sought alternative employment. This was perfectly understandable, in particular in the light of the poor working relationship in the team, as acknowledged by both parties. He found alternative employment and accommodated the respondent by delaying his departure until mid-October. While the respondent indicated to the complainant at the end of September 2016 that it had secured funding to extend his role, no new contract was given to the complainant. It was not clear whether this was to be another fixed term. If so, it was not clear what the duration for the fixed term would be or whether the respondent would put forward objective grounds for the renewal.

It is clear that the complainant did not remain in employment with the respondent for a 12-month period after he completed the Masters course. It is disputed by the parties whether the complainant “left” the respondent’s employment in October 2016 or whether his contract ended through the expiry of the fixed term.

The legal test in section 5 provides that any deduction must be required or authorised by a term of the contract and also be fair and reasonable in the circumstances. On the 14^th October 2016, the complainant was paid for untaken annual leave and only €190 in salary, the respondent having deducted €1,481 for the bursary. Given that almost the entire pay due in the last pay cheque was deducted to meet part of the cost of the contribution, it is hard to envisage that the deduction was fair and reasonable. While I accept the respondent’s explanation regarding the delay in indicating to the complainant that he would be offered an extension, given the delay as well as the imprecise and unwritten nature of what was on offer, I find that the complainant cannot be said to have “left” the employment in the sense of the policy. What occurred when the complainant’s employment with the respondent ended is markedly different to an employee leaving by serving notice, for example in the course of a fixed term. For these reasons, I find that the deduction of €1,481 contravened section 5 of the Payment of Wages Act and the complainant is entitled to recover this amount.

Decision:

Section 41 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.

CA-00008147-001

For the reasons outlined above, I find that the claim is well founded and the respondent shall pay to the complainant €1,481 less any lawful deductions.

Dated:   23^rd August 2017

Workplace Relations Commission Adjudication Officer: Kevin Baneham

Key Words:

Payment of Wages Act

Deduction made to cover education bursary