ADJUDICATION OFFICER DECISION/RECOMMENDATION

Adjudication Reference: ADJ-00006467

 Complaints:

Date of Adjudication Hearing: 08/03/2017

Workplace Relations Commission Adjudication Officer: Rosaleen Glackin

Location of Hearing: Lansdowne House, Dublin 4

Procedure:

In accordance with Section 41 of the Workplace Relations Act, 2015 and 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.

The Complainants referred a complaint to the Workplace Relations Commission on 14^th December 2016 alleging their Employer had breached the Act in relation to an unlawful deduction from their wages. Both Claimants are claiming payment of €856.12 in cash rather than payment of this by way of Company Vouchers.

Summary of Claimants Position.

Following a Collective Agreement between A Trade Union and the Company the Complainants are entitled to payment of a Christmas Bonus. This is set out in a letter dated 21^st November 1997 from a named Manager of the Respondent and the Trade Union. The Agreement provides that the Complainants will receive an increase in the Christmas Bonus from 1 week’s pay to 1 and half week’s pay with effect from Christmas 1997. The Company made a unilateral change to the Collective Agreement and decided without agreement or consultation to pay the Christmas Bonus in the form of Vouchers.

In 2004 the Company stated that due to changes in taxation policy that henceforth the vouchers would be subject to tax. The Complainants requested their Christmas Bonus be paid in cash.

This issue has been the subject of complaints to the Rights Commission Service and to the Workplace Relations Commission and on appeal to the Employment Appeals Tribunal between 2005 and 2015.

The issue again arose in December 2016 when the Complainants were due to be paid their Christmas Bonus in cash on 6^th December 2013. The Company refused to pay the Complainants.

Summary of Employer’s Position.

The Respondent confirmed the existence of the proposals dated 21^st November 1997, which provides for a Christmas Bonus of 1 and half weeks pay starting Christmas 1997.

Between 1997 and 2004 every employee of the Company received at their election either vouchers or cash. By 2004 the overwhelming majority of employees had opted for vouchers and this was supported by the Trade Union as it was perceived there might be a tax advantage to their members.

In 2004 the Company decided that all employees would receive their Christmas Bonus in vouchers. Since that date a small number of employees have contended that the Employer was not entitled to vary the practice. The Claimants are the only two remaining employees who state they are entitled to cash.

The Respondent acknowledged that the issue has been before a number of Rights Commissioners and Adjudication Officers and also before the Employment Appeals Tribunal where the complaints have been upheld.

The provision of the Christmas Bonus to employees was always subject to variation as occurred in 1997 when the amount was increased and subsequently when employees had the option of cash or vouchers. The Complainants have no agreement with their Employer and this is detrimental to their case. The High Court Decision of Justice Finnegan in Dunnes Cornelscourt Limited v Lacey & Another (2007) was referenced in support of this contention.

The Respondent also referenced the Decision of the High Court in Lichters v Depfa Bank plc (2012) where it was found the Employer was entitled to vary the terms of the Bonus Scheme provided that it acted reasonably.

On the basis of the evidence and written submissions from both parties I find and decide as follows.

Both Parties have referenced the 1997 document, which provides as follows:

“ In addition, they will receive an increase in Christmas Bonus from 1 weeks pay to 1.5 weeks pay (with effect from Christmas 1997) and an increase of 1 day in annual holiday entitlement (with effect from 1998 holiday year) commencing 1^st January 1998”.

The Payment of Wages Act, 1991 provides a definition of wages at Section 1 of the Act. It includes “(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”.

It is clear that the payment of the Christmas Bonus was agreed between the Company and the Trade Union representing the employees of the Company and that this was modified in 1997. This is confirmed in the letter dated 21^st November 1997 in a letter from a named Director of the Company to the Trade Union. There was no evidence presented to me at the Hearing or since to show that this agreement was varied by agreement between the parties.

Therefore I find that the Payment of the Christmas Bonus, in cash as per the Agreement, is wages as defined by Section 1 of the Act.

I further note that “cash” is defined at Section 1 (1) of the Act as “means cash that is legal tender”.

Vouchers cannot be deemed to be legal tender as defined by the Act.

I find that the unilateral Decision of the Respondent to pay the Claimants their Christmas Bonus by way of vouchers is an unlawful deduction as defined by Section 5 of the Act.

In accordance with Section 41 (5) of the Workplace Relations Act 2015 I declare the complaints are well founded. The Employer has breached Section 5 of the Act.

I direct the Respondent to pay the Complainants the sum of €856.12 each within 42days of the date of this Decision.

Dated:   15/06/2017

Workplace Relations Commission Adjudication Officer: Rosaleen Glackin

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