ADJ-00004713

ADJUDICATION OFFICER DECISION

Adjudication Decision Reference: ADJ-00004713

Complaint for Resolution:

Date of Adjudication Hearing: 18/10/2016

Workplace Relations Commission Adjudication Officer: Patsy Doyle

Procedure:

In accordance with Section 41(4) of the Workplace Relations Act, 2015 and Section 6 of the Payment Of Wages Act, 1991 following the referral of the complaint to me by the Director General, 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.

Attendance at Hearing:      

Complainant’s Submission and Presentation:

The complainant commenced work as a Maintenance Technician on 8 July 2009 .The complainant presented a letter dated 6 November, 2014 which confirmed a change of named employer to the respondent. This stated that his current individual terms and conditions remained the same.

The complainant was involved in an accident at work when he was struck by a forklift and knocked to the ground. The driver of the forklift was also employed by the respondent. The complainant had been on sick leave from January 10, 2016 to facilitate surgery and subsequent recovery. He is under medical supervision.

His last payment from the company was received on 21 January, 2016, incorporating 10 days absence from work. The complainant submitted medical certificates to cover the period of absence He anticipated further payment on 18 February, but nothing followed.

On 3 March, 2016, the complainant’s Solicitor made a formal application for paid sick leave in line with custom and practice established by the respondent in paying staff whilst on leave due to injuries sustained at work. This was denied by the company. A further appeal citing precedence for payment of sick leave was submitted on the complainant’s behalf. This was unsuccessful and the matter was referred to the WRC on August 12, 2016.

The complainant contended that the non payment of wages constituted a deduction for the purposes of the Payment of Wages Act, 1991.

The complainant relied on an extract from both the complainant’s contract of employment and the staff handbook.

1 Contract: Payment is not normally made during periods of absence through illness.

2 Staff Handbook: Any Payment which is made is at the discretion of the Manager involved.

The Solicitor for the complainant submitted two names of former employees who had received payment for periods of absence from work due to injuries sustained at the workplace. Both absences of three and nine weeks respectively occurred after the commencement of the complainants employment and the complainant believed that it was an implied term of his contract that the custom and practice of the respondent was to pay employees during absence from work in such circumstances.

The complainant advised the hearing that he was currently pursuing a claim before the Personal Injuries Board and confirmed the instant claim was directed at the custom and practice argument alone and as such was separate to the PIAB claim. He confirmed that any award made by the WRC would not be included in his Table of loss before PIAB.

The complainant submitted details of his financial hardship. He relied on the presupposition that payment during a work related injury was an implied term in his contract of employment and relied on the Authority of Mears V Safecar Security ltd [1983] QB 54.

He submitted that he did not have access to an income continuance scheme through his pension plan.

Respondent’s Submission and Presentation:

The respondent disputed the claim. It was denied that a deduction was made from the complainant’s wages or that a breach of Section 6 of the Act had transpired .The respondent submitted that the claim had not been pursued via the company grievance procedure .

The respondent drew the attention of the hearing to the complainant’s contract of employment

Payment is not normally made during periods of absence through illness

The respondent drew further attention to the “Employee Guidebook”

Payment is not made during periods of absence through illness. Any payment which is made is at the discretion of the manager involved. ……Any payment which is processed while on sick leave will be minus the employee’s social welfare entitlement for the sick days in question.

The respondent confirmed that the company does not distinguish between absence caused by illness or accident.

The respondent contended that the complainant did not hold a contractual right to paid sick leave and submitted that the complainant should pursue any claim for loss of earnings in that forum .

The Adjudicator was asked to dismiss the complaint as frivolous.

Decision:

Section 41(4) 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. Section 6 of the Payment of Wages Act 1991 requires me to make a decision in the complaint.

I have considered the submissions of the parties and I have inquired into the complaint .I note that the complaint lodged with PIAB was on a “first in time” nature. The instant complaint needs to be addressed under the Payment of Wages Act, 1991.

Section 1 of the Act of 1991 provides the definition of wages:-

“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:

There was considerable conflict between the parties on each of their interpretations of what should happen when an employee is on sick leave.

On the complainant side, he had a clear recollection of being paid on a previous occasion, early on during his employment in relation to a works based accident. He also presented a written statement from a previous employee who confirmed that he had been paid during like circumstances.

The Respondent made a definite contribution that nobody had been paid sick leave at the company for over two years, irrespective of the genesis of the illness. Evidence was given that the medical certificates received by the complainant’s manager were received and kept on file by the company .It was the respondent position that PIAB was the logical forum for the complainant to address a loss of earnings claim.

I engaged in a careful consideration of the company documents in relation to sick leave. I appreciate that the staff handbook related to the complainants earlier employer. However, I was mindful of the “no change in terms and conditions” clause inserted in the change of company letter from 2014.

I found that there was no universal application of paid sick leave provided for in the staff handbook or the contract of employment. I did find provision for Management discretion in relation to paid sick leave.

I then had to probe how that discretion was applied in this case. The respondent was unable to provide me with details of the forum where the complainants application was assessed .They relied on the “ blanket exclusion of paid sick leave “ over the past two years .I detected that the respondent was unsettled by having to address the same claim in two fora , PIAB and WRC and I understood in part their frustration . However, I must examine the claim within my Jurisdiction.

In Cronin V Eircom Ltd [2007]18 ELR 84, a case surrounding a dispute on a secondment arrangement, Laffoy J, held that:

Mutual trust and confidence should be implied into each contract of employment by operation of law

This is an importance statement as in analysing “a discretionary payment “in employment terms, the Courts have found that it is all about transparency in decision making.

In Abu Dhabi National Tank Co V Product Star Shipping ltd No 2 [1993] 1 Lloyds Rep 397, Leggett L.J remarked:

Not only must the discretion be exercised honestly and in good faith but, having regard to the provisions of the contract by which it is conferred, it must not be exercised arbitrarily, capriciously or unreasonably.

I was struck by the earnest submissions of both parties in this case and I am mindful that the precedent stated by the complainant of having been paid previously by his earlier employer, within the first year of employment was not advanced to the employer before the hearing .The respondent was not in a position to confirm of deny the precedent advanced.

In a UK case Cantor Fitzgerald International V Horkulak [2004] EWCA Civ 1287 where the powers associated with the application of discretion were considered. The Court of Appeal accepted that the resolution of the conflict in “discretion “rested with the party exercising the discretion,

It is presumed to be the reasonable expectation and therefore the common intention of the parties that there should be a genuine and rational, as opposed to an empty or irrational exercise of discretion. Thus the courts impose an implied term of the nature and to the extent described

The EAT considered a question of the payment of a discretionary bonus in Devlin V ESB {2015]26 ELR 278 .In finding that the non –payment of the bonus was not a contravention of Section 5 of the Act

“However a discretion, although it may seem absolute, is not unfettered and must be exercised reasonably and in good faith “

In this case, I found that the exercise of discretion was fettered from an early stage i.e. in the first letter of refusal dated 15 March, 2016. I believe that it was overtaken and lost in the PIAB proceedings.

The complainant was a long standing employee and was in an unforeseeable situation of unplanned sick leave and I find that his case deserved a more considered individual attention in line with the Laffoy J statement on mutual trust and confidence.

Section 5 of the Act sets out the parameters of what is not acceptable in terms of deductions made to wages of a worker.

Regulation of certain deductions made and payments received by employers.

5

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

( a) the deduction (or payment) is required or authorised to be made by virtue of any statute or any instrument made under statute,

( 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, or

( c) in the case of a deduction, the employee has given his prior consent in writing to it.

I find that because of the pre-existing clause surrounding some discretion surrounding paid sick leave contained in the complainants contract of employment , augmented by the staff handbook, I find that the respondent cannot reasonably rely on the defence in S.5 (b) in this regard .The discretion permitted was not actioned and was practiced in an arbitrary, ad-hoc manner . I was surprised that the respondent confirmed that annual leave was paid to the complainant during the early part of his sick leave.

I find that the complainant has made a well founded complaint. I find that the respondent acted in breach of Section 5 of the Act, Cleary V B and Q Ireland ltd [2016] IEHC 119 considered.

I will now consider the redress of reasonable compensation. I heard in evidence that the longest period of time covered in the past by the company was for a period of 9 weeks .I appreciate that this was not within the present respondents time of governance.

By the date of the hearing, October 18, the complainant had been on unpaid sick leave for a period of 9 months, without an identifiable return to work date. I order the respondent to pay the complainant a period of 4 months paid sick leave minus social welfare periods within 6 weeks of this decision.

Patsy Doyle, Adjudicator

Dated:   15^th February 2017