ADJUDICATION OFFICER DECISION & RECOMMENDATION
Adjudication Reference: ADJ-00005528
Parties:
| Complainant | Respondent |
Parties | A Trainee | A Tax Consultancy |
Complaint(s):
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Act | Complaint/Dispute Reference No. | Date of Complaint. |
Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991 | CA-00007623-001 | 14/10/2016 |
Complaint seeking adjudication by the Workplace Relations Commission under Section 11 of the Minimum Notice & Terms of Employment Act, 1973 | CA-00007623-002 | 14/10/2016 |
Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991 | CA-00007623-003 | 14/10/2016 |
Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977 | CA-00007623-004 | 14/10/2016 |
Complaint seeking adjudication by the Workplace Relations Commission under section 13 of the Industrial Relations Act, 1969 | CA-00007623-005 | 14/10/2016 |
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Date of Adjudication Hearing: 13/09/2017
Workplace Relations Commission Adjudication Officer: Michael McEntee
Procedure:
In accordance with Section 41 of the Workplace Relations Act; Section 8 of the Unfair Dismissals Acts, 1977 – 2015; Section 6 of the Payment of Wages Act, 1991; Section 11 of the Minimum Notice & Terms of Employment Act, 1973 and Section 13 of the Industrial Relations Act, 1969 following the referral of the complaint(s)/dispute(s) to me by the Director General, I inquired into the complaint(s)/dispute(s) and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint(s)/dispute(s).
Background:
This case largely centres on the question of the liability for Examination fees and Study leave taken by the Employee. The Respondent Employer argues that the Contract of Employment provided for the recovery of fees from wages payable on termination of employment. |
1: Summary of Complainant’s Case:
Act | Complaint/Dispute Reference No. | Summary Complaint |
Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991 | CA-00007623-001 | Outstanding wages and holiday pay due at the end of the employment |
Complaint seeking adjudication by the Workplace Relations Commission under Section 11 of the Minimum Notice & Terms of Employment Act, 1973 | CA-00007623-002 | Pay in Lieu of Notice Four weeks pay claimed. |
Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991 | CA-00007623-003 | An unlawful deduction from my wages - disputed exam and study leave costs being withheld. |
Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977 | CA-00007623-004 | Alleged constructive Dismissal on the 17th May 2016 |
Complaint seeking adjudication by the Workplace Relations Commission under section 13 of the Industrial Relations Act, 1969 | CA-00007623-005 | Industrial relations dispute regarding Exam costs and pay in lieu of notice. |
2: Summary of Respondent’s Case:
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Act | Complaint/Dispute Reference No. | Summary Response |
Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991 | CA-00007623-001 | Outstanding wages and holiday pay due at the end of the employment. Any outstanding monies need to be offset against outstanding liability for Exam Fees. |
Complaint seeking adjudication by the Workplace Relations Commission under Section 11 of the Minimum Notice & Terms of Employment Act, 1973 | CA-00007623-002 | Pay in Lieu of Notice Four weeks pay claimed. Complainant resigned voluntarily – no legal liability for a four weeks notice period. |
Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991 | CA-00007623-003 | An unlawful deduction from wages - disputed exam and study leave costs being withheld. Deduction for Exam Fees and Costs provided for in the Contract of Employment – a perfectly legal and proper deduction. |
Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977 | CA-00007623-004 | Alleged constructive Dismissal on the 17th May 2016` (1) Claim is out of time (2) Complainant resigned voluntarily. |
Complaint seeking adjudication by the Workplace Relations Commission under section 13 of the Industrial Relations Act, 1969 | CA-00007623-005 | Industrial relations dispute regarding Exam costs and pay in lieu of notice. Matters largely covered by above range of Statutory claims. |
3: Findings and Conclusions:
The key question in this case is one of liability for Examination fees and related Study Leave. 3:1 The Exam Fees question. The Contract of Employment states “In the event that you exercise your right to terminate your employment you agree to reimburse the cost of course fees, examination fees and paid study leave (“The Exam Costs”). This reimbursement shall only arise in the event that you terminate your employment within three months of the sitting of the Institute of Taxation examinations, such time not to include any paid or unpaid leave. The amount to be reimbursed shall be the Exam Costs borne by us in the previous 18 months or relating to the examinations sat, and you agree that such reimbursements may be dealt with from deduction of your final salary.” The issue of Exam fees and the repayment of same was considered by the EAT in Ryanair Limited v Alan Downey PW6/2005 in [2006] 17 ELR 347 Here the Tribunal found (quoting from [2006] 17.ELR 347 (R. Maguire BL) (1) The Tribunal, by virtue of s.11 of the Act, was under a strict obligation to consider whether the employment contract complied with the Act. (2) The finding of the District Court that the employment contract was enforceable was not directly relevant as the Tribunal was charged with the responsibility under the Act of ensuring compliance with same and was not satisfied that the appellant had so complied. (3) The training course was a service provided by the appellant to the Respondent within the meaning of s.5(2)(b) of the Act. (4) The appellant was in breach of s.5(2)(iv) of the Act as it had not given one week's written notice of the particulars of the deduction from the Respondent's wages. (5) The deduction was not fair and reasonable as required under s.5(2) of the Act as it had the effect of paying the Respondent no wages in respect of his final period of service and he had not been given any notice in writing. (6) The appellant was in breach of s.5(2)(vii) of the Act as it did not make the deduction from his wages within six months of his finishing the course. (7) An employee's written promise to repay a loan does not of itself entitle the employer to deduct repayments from the employee's wages.
Furthermore the Tribunal stated in the concluding remarks of the Decision that “Essentially, the appellant (The Employer) is relying on the fact that a clause in the employment contract provides for a deduction and therefore the deduction cannot be unlawful. This is not the law as the Tribunal understand it. The appellant company, in order to make a lawful deduction, must comply with the provisions of the Act. In fact, in Potter v Hunt Contracts Ltd [1992] I.C.R. 337, it was held that an employee's written promise to repay a loan does not of itself entitle the employer to deduct repayments from the employee's wages.
Taking these precedents the first task is to satisfy the question posed by Section 11 of the Payment of Wages Act Voidance of certain provisions in agreements. 11
In plain English this can be taken to mean that the Payment of Wages Act requires that the provisions of the Act can be taken to over rule any sections of a contract of Employment that are in conflict with the Act. In other words was the Section of the Contract entitled “Termination Provisions”, especially the Study Leave provisions, at variance with the Payment of Wages Act, 1991? On balance I found that the Study Leave provisions were not at variance with the Act in principle but the key issue was how any deductions or recovery could be handled. As sated in the Ryanair case quoted above the Exam costs was a service provided by the Respondent to the Complainant in this case within the meaning of s.5(2)(b) of the Act. However the Tribunal , in that case, did highlight and gave strength to the application of Section 5 (2) b (ii) 2) An employer shall not make a deduction from the wages of an employee in respect of— ( a) any act or omission of the employee, or ( 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,
In the case in hand the total value of the Exam Costs came to €3,955 and the outstanding Wages and Holidays due came o €1,245 leaving an excess owning to the Respondent of €2,710. In the Ryanair case referred to above the Tribunal had stated that the “The deduction from the employee’s wages had the effect of paying to the employee no wages in respect of his final period of service, and the Employer had failed to give the employee any notice in writing of this deduction. This was not fair and reasonable behaviour on the part of the Employer” Accordingly in the case in hand it is safe to state that seeking the full amount of € 3,955 in one lump sum and offsetting all the employee’s wages was not “fair and reasonable”. However I did note that the Respondent had proposed a scheme of deferred payments to lighten the burden on the employee. In overall summary the repayment of the Exam costs to the Respondent Employer is perfectly legal, the only issue being the “fairness or reasonableness” of the actual method employed in making the deductions. Ideally this should be a matter for negotiation between the parties but in this case the situation is complicated by the fact that the Complainant is no longer an employee and is stated to be of limited means. This is a matter I will return to in consideration of the final element of this claim, the Reference under Section 13 of the Industrial Relations Act ,1969 Complaint Reference CA-00007623-005 However it is now necessary to consider the individual elements of the claim
3:2 CA-00007623-001 | ||
Act | Complaint/Dispute Reference No. | Summary |
Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991 | CA-00007623-001 | Outstanding wages and holiday pay due at the end of the employment. |
The body of case law here is strong. Outstanding wages and holiday pay due at the end of an employment (especially for hours actually worked) is almost inviolate. This was considered in the Tribunal decision referred to above and referenced to the Potter v Hunt Contracts Ltd [1992] I.C.R. 337, where it was held that
“an employee's written promise to repay a loan does not of itself entitle the employer to deduct repayments from the employee's wages.”
Accordingly in this case I direct that the outstanding wages and holiday pay due (approximately for the fist two weeks of the month in question) on the date of termination be paid to the Complainant without any deductions as regards the Study leave Issue. The Payment is obvious a Gross Payment and is subject to normal payroll taxes.
3:3 CA-00007623-002
Complaint seeking adjudication by the Workplace Relations Commission under Section 11 of the Minimum Notice & Terms of Employment Act, 1973 | CA-00007623-002 | Pay in Lieu of Notice Four weeks pay claimed.
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From a review of the evidence both oral and written I was happy that the issue of notice did not arise. The situation regarding the Complainant’s exit was vigorously disputed but on the balance of probability I came to the view that the Respondent’s version of events was more likely to be the most accurate. The Complainant had resigned.
I noted with concern the issues surrounding a medical matter and the serious question marks that now attached to the accuracy of an initial Medical Declaration form completed by the Complainant.
No notice payment is due.
3:4 CA-00007623-003
Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991 | CA-00007623-003 | An unlawful deduction from my wages - disputed exam and study leave costs being withheld. |
Having considered the evidence and looked closely at the Contract of Employment I came to the view that the Deduction for Exam fees was a proper and lawful deduction in strict legal principle.
The claim is not well founded save for the proviso that Section 5 (2) b (ii) of the Act, quoted above ahs to be respected in the manner of the deductions.
3:5 CA-00007623-004
Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977 | CA-00007623-004 | Alleged constructive Dismissal on the 17th May 2016` |
The Complainant commenced employment on the 15th June 2015 and the employment ended on the 17th of May 2016. It is well accepted law that the date on which the employment ended, in this case by resignation, is the reference date. The case of Stamp v McGrath UD 1243/1983 is the generally accepted Authority here.
Section 2 (1) (a) of the Unfair Dismissals Act’ 1977 refers.
“Exclusions.
- — (1) Except in so far as any provision of this Act otherwise provides ] This Act shall not apply in relation to any of the following persons:
( a) an employee (other than a person referred to in section 4 of this Act) who is dismissed, who, at the date of his dismissal, had less than one year’s continuous service with the employer who dismissed him.”,
This point was strongly contested by the Complainant’s legal representative who argued that an additional four weeks “Notice” should be allowed as per his interpretation of the contract of Employment. However it is clear from the calendar that even allowing an additional four weeks the Complaint would still be out of time.
Accordingly the claim under the Unfair Dismissals Act in this case has to fail as the Complainant has not got the required 12 months service.`
3:6 CA-00007623-005
Complaint seeking adjudication by the Workplace Relations Commission under section 13 of the Industrial Relations Act, 1969 | CA-00007623-005 | Industrial relations dispute regarding Exam costs and pay in lieu of notice. |
This case was always going to resolve on the issue of the Exam fees and Study Leave.
Accordingly I make the following Recommendation under the Industrial Relations Act, 1969.
The Complainant accepts that they have an unambiguous moral and a legal liability to repay the Exam fees to the Respondent employer.
The only issue is how the repayment can be handled in a “fair and reasonable manner” as per Section 5 (2) (ii) of the Payment of Wages Act, 1991.
2) An employer shall not make a deduction from the wages of an employee in respect of—
( a) any act or omission of the employee, or
( 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—
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
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
Accordingly I recommend that a system of phased payments be put in place to recover the amount outstanding - being €3,955.
I recommend a payment of €250 per month for a period of 16 months.
I recommend that the parties meet to agree this arrangement or to devise an alternative more suitable to themselves.
I note, in conclusion, I note that he Respondent employer in this case has the alternative legal option of a reference to the Civil Courts to recover a legal debt as per the signed Contract of Employment.
4: Decision and Recommendation:
Section 41 of the Workplace Relations Act 2015; Section 8 of the Unfair Dismissals Acts, 1977 – 2015; Section 6 of the Payment of Wages Act, 1991; Section 11 of the Minimum Notice & Terms of Employment Act, 1973 and Section 13 of the Industrial Relations Act, 1969 requires that I make a decision and Recommendation in relation to the complaint(s)/dispute(s) in accordance with the relevant redress provisions under Schedule 6 of that Act.
For convenience I have set these out in tabular format below.
Act | Complaint/Dispute Reference No. | Summary Decision /Recommendation
Detailed reasoning to be found in Section Three of this Adjudication above. |
Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991 | CA-00007623-001 | Claim well founded. Two weeks Wages and Outstanding Holidays due on the 17th May 2016 to be paid to the Complainant. |
Complaint seeking adjudication by the Workplace Relations Commission under Section 11 of the Minimum Notice & Terms of Employment Act, 1973 | CA-00007623-002 | Claim not well founded. No notice pay due. |
Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991 | CA-00007623-003 | Claim is not well founded. The repayment of the Exam fees is a lawful deduction subject to the Provisions of Section 5 (2) of the Act. |
Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977 | CA-00007623-004 | Claim is not in time. The Complaint does not have 12 months service. |
Complaint seeking adjudication by the Workplace Relations Commission under section 13 of the Industrial Relations Act, 1969 | CA-00007623-005 | Complainant has a moral and legal liability to the Respondent to repay the Exam fees. A scheme of phased deductions /repayments is Recommended. |
Dated: 2/11/17
Workplace Relations Commission Adjudication Officer: Michael McEntee
Key Words: