PWD173

FULL RECOMMENDATION

PW/16/92

DETERMINATIONNO.PWD173

ADJ-00000251 CA-00000290-001

SECTION 7(1), PAYMENT OF WAGES ACT, 1991

PARTIES :

FITZPATRICK MORRIS FINANCIAL SERVICES LIMITED T/A INVESTWISE

- AND -

TERESA KINANE

DIVISION :

Chairman: Mr Haugh
Employer Member: Ms Doyle
Worker Member: Ms Tanham

SUBJECT:
1. Appeal of Adjudication Officer Decision No. ADJ-00000251.

BACKGROUND:

2. The employee appealed the Decision of the Adjudication Officer to the Labour Court on the 22 November 2016. A Labour Court hearing took place on the 8th February 2017. The following is the Court's Determination:

DETERMINATION:

This is Ms Kinane’s appeal of a decision of an Adjudication Officer (ADJ-0000251) dated 13 October 2016 under the Payment of Wages Act 1991 (“the Act”). The Adjudication Officer found at first instance that the claim was not well founded. Ms Kinane’s notice of appeal was served on the Respondent and thereafter received by the Court on 22 November 2016. Ms Kinane is referred to hereinafter as the Complainant; Fitzpatrick Morris Financial Services Limited T/A Investwise is referred to as the Respondent.

The Complainant worked for the Respondent from 13 April 2015 until her resignation took effect on 17 July 2015. At the outset of their relationship, she was offered a written statement of contractual terms by the Respondent but declined to sign it at any stage. This statement provided as follows in relation to remuneration:

“You are entitled to 70% of all income earned. This includes all fees, initial commission and renewal commissions. 30% of earned income will be retained by the company to cover administrative costs and support services. You will be paid monthly, on 15^thof every month.”

The claim relates to the non-payment of a potential commission payment on a new pension account that the Complainant handled. Both parties accepted that in fact no commission was payable on this account as the client had not been informed in advance about any commission structure. Furthermore, the client engaged with the Respondent on a fee-only basis and did not require ongoing advice from the Respondent once his account had been set up and was not therefore minded to enter into any commission arrangement. The Respondent submitted that the Complainant was, in fact, ultimately, paid her 70% share of the once-off professional fee negotiated with the client in question.

Discussion and Decision

Section 1(1) of the Act includes the following definition of wages for the purposes of the Act:

“wages”, in relation to an employee, means any sums payable to the employee by the employer in connection with his employment, including—
(a) any fee, bonus or commission, or any holiday, sick or maternity pay, or any other emolument, referable to his employment, whether payable under his contract of employment or otherwise, and
(b) any sum payable to the employee upon the termination by the employer of his contract of employment without his having given to the employee the appropriate prior notice of the termination, being a sum paid in lieu of the giving of such notice: Provided however that the following payments shall not be regarded as wages for the purposes of this definition:
(i) any payment in respect of expenses incurred by the employee in carrying out his employment,
(ii) any payment by way of a pension, allowance or gratuity in connection with the death, or the retirement or resignation from his employment, of the employee or as compensation for loss of office,

(iii) any payment referable to the employee's redundancy,
(iv) any payment to the employee otherwise than in his capacity as an employee,
(v) any payment in kind or benefit in kind.

Section 5(6) of the Act provides:

“(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 isproperly payableby 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 areproperly payableto 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.”
  (Emphasis added)

It is clear to the Court - based on the parties’ submissions and on the answers given by the parties to the Court’s questions - that both sides agree that the client in question was not given advance notice of the potential commission before the Complainant began the necessary work in connection with his pension account. In any event, when the matter was put to him, he unambiguously opted for a once-off initial fee arrangement and declined to enter into a commission arrangement as his intention was to manage the pension portfolio himself and he didn’t require ongoing advices from the Respondent. Accordingly, the Court finds that no commission was properly payable to the Complainant in all the circumstances. Therefore, the appeal fails and the decision of the Adjudication Officer is affirmed.

The Court so determines.

Signed on behalf of the Labour Court

Alan Haugh
LS______________________
10 February 2017Deputy Chairman

NOTE

Enquiries concerning this Determination should be addressed to Louise Shally, Court Secretary.