ADJUDICATION OFFICER DECISION

 Adjudication Reference: ADJ-00003367

Complaint:

ActComplaint Reference No.Date of Receipt Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991 CA-00004876-001 26/05/2016   Date of Adjudication Hearing: 26/10/2017 Workplace Relations Commission Adjudication Officer: Enda Murphy

Procedure:

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

Background:

The Complainant claims that the Respondent has contravened Section 5 of the Payment of Wages Act 1991 in terms of its refusal to pay him for the duration of an absence on sick leave after he sustained a work-related injury.

Summary of Complainant’s Case:

The Complainant commenced employment with the Respondent as a Truck Driver on 15th November, 2006. The Complainant submitted that the terms of the contract that he signed in January, 2009 entitled him to sick pay while absent as a result of a work-related illness/injury. The Complainant was absent from work from 10th November, 2015 until 30th March, 2016 as a result of work related stress. The Complainant submitted that the Respondent refused to pay him during this period and contends that this was in breach of the terms and conditions of his contract of employment. The Complainant claims that he is entitled to €13,140.00 in unpaid wages which the Respondent has unlawfully deducted from his wages contrary to Section 5 of the Payment of Wages Act 1991. The Complainant submitted that the Respondent sought to unilaterally change the terms and conditions of his contract of employment during 2013/2014 to withdraw his entitlement to sick pay in respect of work related sick absences. The Complainant contends that he did not agree to this change in his terms and conditions of employment and refused to sign the revised contract of employment. The Complainant claims that the original contract which he agreed with the Respondent in January, 2009 remained valid up to and including the period of his work related sick absence from November, 2015 to March, 2016.  

Summary of Respondent’s Case:

The Respondent submitted that the Complainant signed a contract of employment on 1st January, 2009. In relation to sick pay, this contract stated that “The company does not pay sick pay unless absence is due to workplace sickness or injury”. This contract also contained a specific “review” clause. On 9th January, 2013, the Complainant was invited to a consultation meeting regarding a proposed revision to his terms and conditions of employment. The Complainant was issued with a revised contract of employment which provided that the company would not pay him whilst absent on sick leave. All of the Respondent’s employees were also issued with revised contracts at that juncture to reflect the new company policy on sick pay. The Respondent submitted that the Complainant failed to sign the revised contract despite being invited to attend numerous meetings to discuss the matter. In December, 2013 following a period of sick leave, the Complainant queried the position regarding the revised policy on sick pay. By correspondence dated 16th January, 2014, the Respondent informed the Complainant that the new policy in relation to sick pay was in force and that he was not entitled to sick pay in accordance with his revised terms and conditions of employment. However, as a gesture of goodwill, the Respondent decided to pay the Complainant for the duration of his absence from 26th November, 2013 to 13th December, 2013. This was done on the strict understanding that the Complainant would not have any entitlement to sick pay going forward. Following a further period of sick leave in November, 2015, the Complainant again raised the issue of payment during this period. The Respondent wrote to Complainant on 23 November, 2015 in relation to this matter and drew his attention to previous correspondence in which it had been clarified that he would not have any entitlement to sick in accordance with his amended terms and conditions of employment. In this letter the Respondent also referred to the fact that as the Complainant had not raised any objection to the amendment to his terms and conditions of employment during the preceding year the company had no option but to imply that he had accepted the terms and conditions as amended. Without prejudice to the foregoing, the Respondent also submits that the sick leave taken by the Complainant in November, 2015 was not work related. The Respondent submits that the company obtained a report from an independent occupational health consultant to confirm that the Complainant’s absence was not work related.  

Findings and Conclusions:

The relevant Law Section 1 of the Payment of Wages Act provides for the following 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.” Section 5(1) of the Act provides: “(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.” Section 5(6) of the Act provides: — (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. The issue for decision in relation to this complaint is whether or not the Respondent made unlawful deductions from his wages contrary to Section 5 of the Payment of Wages Act 1991 in respect of the failure to pay the Complainant during the period of his absence on certified sick leave from November, 2015 to March, 2016. In considering this issue, I must first decide whether the claimed unlawful deduction was in fact “properly payable” to the Complainant. The Complainant referred this complaint to the Workplace Relations Commission on 26th May, 2016. By application of the time limits provided for in Section 41(6) of the Workplace Relations Act 2015, the cognisable period for the purpose of this claim is confined to the six-month period ending on the date on which the complaint was referred to the WRC. Therefore, the cognisable period covered by the claim is the six-month period from 27th November, 2015 until 26th May, 2016. It was common case that the Complainant was absent from work on sick leave during the period from 10th November, 2015 until 30th March, 2016. It was also common case that the Complainant was not paid by the Respondent for the duration of this absence on sick leave. The Complainant claims that he was absent on work related sick leave during this period and that he was entitled to be paid during this absence in accordance with the terms and conditions of his contract of employment which he signed in January, 2009. The Complainant contends that the Respondent was not legally entitled to unilaterally change the terms and conditions of his contract of employment without his consent. The Respondent disputes that the Complainant had an entitlement under the terms and conditions of his existing contract of employment to be paid while absent on sick leave. The Respondent accepts that the contract of employment furnished to the Complainant in January, 2009 provided that he would be entitled to pay while absent on work related sick leave. However, the Respondent contends that the company decided to change its policy on the payment of sick pay for economic and financial reasons in early 2013 and it was decided thereafter to discontinue the practice of paying employees while absent on work related sick absence. The Respondent adduced evidence that the contracts of all employees were reviewed in early 2013 and revised contracts were issued which included a clause to confirm that employees would not receive sick pay whilst absent on sick leave.   Having regard to the totality of evidence adduced, I find that the Complainant was not entitled to sick pay under the terms of his existing contract of employment for the duration of his absence from November, 2015 to March, 2016. In coming to this conclusion, I have taken the following material facts into consideration, namely: ·         I am satisfied that the Respondent, as a result of financial and economic necessity, implemented a revised company policy in January, 2013 in relation to the payment of sick pay. Under this revised policy, the company did not pay sick pay to employees thereafter. ·         The initial contract of employment which was signed by the Complainant and the Respondent in October, 2009 contained a review clause. ·         The company issued revised contracts of employment to all employees, including the Complainant in January, 2013, to incorporate a term in relation to the revised policy regarding the non-payment of sick pay. ·         The company actively engaged in a process of consultation with the Complainant thereafter to discuss and seek agreement in relation to the revised contract. This process of consultation included the appointment of an independent mediator to try and reach agreement between the parties on the issue. ·         The company reiterated in writing its revised policy to the Complainant on a number of occasions between January, 2013 and November, 2015 following the issuing of the draft revised contract to him. In one such letter dated 16th January, 2014, the company indicated to the Complainant that it had agreed to pay him in respect of a period of sick absence from 26/11/13 to 13/12/13. However, it was made clear that this payment was a gesture of goodwill and that there was no entitlement to sick pay going forward. ·         The Complainant continued to work for the Respondent following the implementation of the revised sick pay policy from January, 2013 to November, 2015 and did not seek any legal remedy for breach of contract in respect of this matter during this period. Neither did the Complainant seek to raise a formal grievance under the Respondent’s internal grievance procedures in relation to the matter. In the circumstances, I am satisfied that the Respondent took all reasonable steps to engage and consult with the Complainant regarding the implementation of its revised policy in relation to sick pay. I find that the Complainant was not entitled to sick pay under the Respondent’s revised policy and the updated written terms and conditions of his contract of employment for the duration of his sick absence from November, 2015 to March, 2016. Accordingly, I find that payment while absent on sick leave during the relevant period does not qualify as wages “properly payable” within the meaning of Section 5(6) of the Act. Therefore, the question of the Respondent’s compliance with subsections (1) and (2) of Section 5 of the Act does not arise for consideration in the circumstances of the present case. Accordingly, I find that the complaint is not well founded and must fail.

Decision:

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 pursuant to the Payment of Wages Act 1991 in respect of sick pay is not well founded.  Dated:   15/02/2018  

Workplace Relations Commission Adjudication Officer: Enda Murphy

Key Words:Payment of Wages Act 1991 – unlawful deduction - sick pay – revised terms and conditions of employment - Section 5(6) – wages not properly payable - complaint not well founded