Complainant

Respondent

Anonymised Parties

A   Stylist

A Hairdressing Salon

Representatives

None

None

Act

Complaint Reference No.

Date of Receipt

Complaint    seeking adjudication by the Workplace Relations Commission under section 6    of the Payment of Wages Act, 1991

CA-00007521-001

10/10/2016

The   complainant asserts that he is owed €1,461.70 in   wages as of the end of his employment; the respondent disputes the claim and   asserts that the deduction was lawful.

The complainant outlined that he   worked for the respondent for five years and submitted his resignation by   email. He also asked for his P45 and his last pay slip. The accountant then   informed him that he owed €900 for a hairdressing course and the amount of   €1,400 was later deducted from his pay. After the complainant resigned, the   respondent held onto his P45 for a week, affecting his wage in his new job.   The complainant said he did not receive any pay after he left the respondent.   He is owed €1,707.50 gross and €1,461.70 net.

The complainant said he never signed   a contract of employment and he had never seen the contract exhibited by the   respondent. The contract states that he would pay for Level 1 courses, but he   was always at Level 3 or higher. The document is dated three days after he   started. The complainant said he had completed three or four courses in his   time with the respondent. Some courses were free as suppliers put them on to   promote their products. The course in dispute here was the only paid course   he had undertaken.

The complainant was promoted to   manager some two years earlier and the respondent wanted all managers to be   at the same level. One representative of the respondent asked him to go on   the course. The complainant also gave lessons of what he had learned on the   course. The course started in December and finished in May, and was given in   week-long modules, lasting five weeks in total. He had to take days off to   attend the course and was awarded a Diploma. The complainant that he stayed   behind every Tuesday evening to show colleagues the skills he had acquired.   He was not paid for these classes, but was paid for other classes he gave not   connected with the course. He had not resigned on the first day of his   holiday, but on the first Thursday of his holiday.

In reply to the respondent, the   complainant said that he had not been aware of the clause allowing recovery   of the cost of the course. He became aware of this in an email sent after his   resignation. He had not signed the contract or agreement. When he had been   promoted to manager, the respondent had been uneasy about increasing his   salary. They later agreed on a duty manager fee. He said that he had been   made an offer from another company at a time when he was already on holiday.   He had previously sought to stop doing the Tuesday classes, but the   respondent had persistently contacted him about this decision. This is why he   sent the email to ask that he be contacted only by email. He had not said   anything to his clients about leaving and the new job came via a friend on   Facebook. It was a better offer as he had been underpaid for years.

The respondent outlined that the   complainant had been promoted to manager and it was a surprise to the   respondent that he did not know of contract provisions. The clause was a   standard clause regarding recovery of fees paid by the employer from the pay   of the employee. He stated that the employee only ever signed the contract   and the complainant had signed a contract at the start of his employment. As   a manager, the complainant also had access to the filing cabinet where the   contracts were stored during his employment.

In respect of the course, the respondent   said that one named supplier charged for all courses, including short ones.   The respondent covered the cost of such courses. It also paid for the longer   course and it was subject to the clause in the contract. The course finished   in May and the complainant left in August, leading to a 20% discount on what   he owed. The respondent stated that the complainant was paid for attending   the course. It was not plausible that he had not known of the contractual   provision. The cost of the course was €3,000 and the clause was in the   contract to ensure that the respondent got value from the course. He outlined   that the complainant was paid for the Tuesday evening classes, and some   classes were given by others.

The respondent outlined that it was   40 years in business and they did things by the book. They had been surprised   to receive the resignation by email and it affected clients who were booked   for after the complainant’s return from annual leave. It had been difficult   for the respondent and they described this as bad behaviour.

The respondent replied that it did   not accept what the complainant says. He was no longer with the company he   left the respondent for. What mattered was how the resignation happened. It   was clear from the contract what would happen where an employee resigns after   finishing an expensive course. It was about recovering the outlay for which   the employee has received the benefit of. It was submitted that the   complainant had to pay for the course because he left. It has not been   necessary to inform the complainant of the recovery clause at the time he was   doing the course.

What is in dispute in this adjudication is the   amount of €1,707.50 gross (and €1,461.70 net) deducted from the complainant’s   final pay cheque following the end of his employment on the 1^st   September 2016. The respondent relies on clause 7.2 of the contract of   employment in the complainant’s name. This provides “The company will at its own discretion and expense provide ongoing   training for its employees. From time to time you may be required to attend   training courses, classes or demonstrations. On completion of such training   should you leave the company within a period of 10 months after such training   you will be required to refund the salon with the cost of this training as   per the following scale…”

The complainant resigned on the 18^th   August 2016 at a time he was on annual leave. The respondent emailed him on   the 12^th September 2016 regarding deductions to be made to the   complainant’s pay, as well as outstanding annual leave, commission etc. In the email, the respondent   states that the above deduction has been made to his pay and that the   complainant also owes it an additional €938.30. In effect, the complainant   received no pay in his final pay cheque.

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.”

Before considering whether the deduction made to the   complainant’s pay was ‘fair and reasonable’, and whether the other elements   have been complied with, it falls to consider whether the respondent had the   contractual basis to make the deduction. There was a sharp conflict in   evidence between the parties on this matter. The complainant said he had not   seen the exhibited contract before receiving it after the end of his   employment; the respondent said in reply that it had been supplied to the   complainant and he had signed it. There is reference to the complainant   having access to the filing cabinet in which the contracts of employment were   kept.

Before the respondent can rely on a contractual term   to lawfully deduct an amount of wages as per section 5 of the Payment of   Wages Act, it must show that there is such a contractual term, whether   express or implied. In assessing the evidence, I note the chain of emails   exchanged by the complainant and a representative of the respondent; it is   clear that he was not aware of the contractual terms and seeks information   about the basis of the deduction. Given that the document exhibited is not   signed by either the complainant or the respondent, it is difficult to attach   sufficient evidential weight to the document to negate the evidence of the   complainant, supported by his email correspondence, in particular the email   of the 20^th September 2016.

For this reason, I find that the deduction made to   the complainant’s final pay cheque is unlawful and the amount deducted should   be paid by the respondent to the complainant. I appreciate that the   respondent has incurred outlay that it believes it will not get the benefit   of because of the complainant’s later resignation. There is clearly scope for   clearer information to be provided to such employees prior to their   undertaking training courses, and for the employees to sign or initial as   acknowledgement of their receipt.

CA-00007521-001

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.

I find that the complaint made pursuant to the   Payment of Wages Act is well-founded and the respondent shall pay to the   complainant the net amount of wages deducted, that is the amount of   €1,461.70.

Payment of Wages Act, section 5