ADJ-00008470

Complainant

Respondent

Anonymised Parties

Retired Firefighter

Local Authority

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 13 of the Industrial Relations Act, 1969

CA-00011054-001

01/05/2017

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

CA-00011054-002

01/05/2017

The complainant was employed by the respondent from May 1988 until June 2004 as a retained firefighter. The complainant did not receive a retirement gratuity at the time of his leaving employment. The complainant believes that he is entitled to the gratuity and has pursued this issue with the respondent. In March 2017 the respondent advised the complainant that all internal mechanisms in relation to his complaint had been exhausted.

The complainant was entitled under the rules governing Ex-gratia Payments on Retirement of Members of the Fire Service to a gratuity.

The complainant has a contractual and statutory right to this payment.

The gratuity is payable when a firefighter reaches 55 years of age. The complainant has not reached that age and therefore has a valid claim under the Payment of Wages Act, 1991.

The complainant resigned voluntarily on 28 June 2004.

At the time of his resignation there was provision for the payment of the gratuity in two circumstances only. These were retirement at age 55 (or older) or retirement on grounds of permanent infirmity.

A subsequent amendment to the scheme broadened the provisions for the payment of the gratuity to include voluntary resignation but this only became operative on 1 January 2005.

There is no legislative basis allowing for the payment to the complainant.

Following the hearing, and at my request, the respondent furnished details with regard to the receipt or non-receipt of the gratuity by members of the fire service who had left employment since 1988. This was copied to the complainants whose representative responded with a further submission.

The first issue that arose at the hearing was the status of the circular from the Department of the Environment on which the respondent based their defence of their position that the complainant did not qualify for the retirement gratuity.   The circular is numbered EL 5/89 and Clause (i) states:

The appropriate gratuity to be paid on retirement at age 55 or earlier if certified medically unfit.

The respondent argues that this was the relevant circular in place at the time that the complainant voluntarily resigned from the service.

The introductory paragraph of the circular referred to Labour Court Recommendation No. LCR 12292 (February 1989) and advised that the Recommendation had been accepted by the Local Government Staff Negotiations Board and by the ICTU group of unions representing part-time fire service personnel. The complainant’s representative argued that the claim that the Recommendation was accepted by the unions was incorrect and that the respondent cannot therefore rely on the circular as the basis of their decision regarding the gratuity. Having studied the documentation, I find that this argument is based on a misinterpretation of the Recommendation. In laying out the background to LCR12292 the Court referred to an earlier Recommendation, LCR9605, and noted that that Recommendation had been rejected by the unions but that the monetary terms had been implemented by the employers. To be clear, therefore, it was LCR9605 that was rejected by the unions. Following that, a claim was lodged by the unions for an increase in the retirement gratuity and this claim is the subject of the Recommendation contained in LCR12292. The Court recommended that the gratuity be increased “to three times the inclusive annual allowance with proportionate increase payable down the existing range of entitlements.”   Obviously this Recommendation would have issued to the parties who only then would decide their positions as regards same.  I have to accept, therefore, that the statement in the Department of the Environment’s circular is correct as regards the parties’ acceptance of LCR12292.

Complaint CA-00011054-02 is a complaint lodged under the Payment of Wages Act, 1991. Section 1 of the Act deals with Interpretation. Under “wages” it states the following:

“wages” in relation to an employee means any sum 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 on 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:

Provided however that the following payments shall not be regarded as wages for the purpose of this definition:

(i)                  any payment in respect of expenses incurred by the employee in carrying out his employment,

(ii)                any payment by way of a pension, allowance or gratuity in connection with the death, or the retirement or resignation from his employment, of the employee or as compensation for loss of office,

(iii)               any payment referable to the employee’s redundancy,

(iv)               any payment to the employee otherwise than in his capacity as an employee,

(v)                 any payment in kind or benefit in kind.

As this complaint relates to a gratuity linked to the retirement of the complainant from his employment with the respondent it comes within the definition contained in (ii) above.   It cannot therefore be considered as a breach of the Payment of Wages Act, 1991.

Complaint No. CA-00011054-01 relates to a dispute regarding these matters referred under the Industrial Relations Act, 1969.   I have studied the documentation supplied by the parties. The respondent produced the relevant circulars to support their case that they applied the regulations in force at particular times and that at the time of the resignation of the complainant in 2004 there was no provision for the payment of the gratuity for voluntary retirement except on the grounds of medical incapacity. This situation changed in 2006 and the operative date of the change was backdated to 1 January 2005. The complainant produced a document consisting of one page that was both undated and unsigned but from general appearance appeared to be of some age.   This carried the title of the fire service with the heading “EX-GRATIA PAYMENTS ON RETIREMENT”. Clause 8 of the document dealt with the circumstances in which the gratuity was payable and included (a) Voluntary Retirement and (d) Permanent Infirmary.   The respondent’s representative stated that she had not located a similar document in their files.

The Labour Court dealt with a similar situation in Appeal Decision No. AD0751 which arose from a claim by a retired member of the fire service for a retirement gratuity when he reached age 55. The case had much the same background and the Court accepted the evidence that prior to 1 January 2005 the only grounds for receipt of the gratuity was reaching age 55 or on the grounds of ill-health. The Court stated:

“Having carefully considered all the submissions made by the parties the Court is satisfied that the preponderance of evidence points to the conclusion that at the time the Claimant resigned from the service he was not entitled to a preserved gratuity under the relevant agreement as it then stood.”

The Court went on to state that it must uphold the collective agreement and the reject the claimant’s position. The Court then went on however to add a rider to the Decision. It was felt that the position that the claimant found himself in was somewhat inequitable and went on as follows:

“There seems to be no good reason as to why the entitlement to this gratuity should not be preserved, in the case of a person who resigns before retirement age, in the same way as other superannuation benefits are preserved. This has now been recognised by the parties to the agreement who have provided for the preservation of this benefit for those who leave the service early in future.”

The Court concluded thus:

“The situation as it affects the Claimant appears to be anomalous and should be considered by the parties to the agreement at an appropriate level.”

In short, the Court found that the respondent in that case had abided by the rules that pertained at that time but that this resulted in the claimant being placed in an anomalous position. The Court recommended in the rider that the parties to the national agreement address this issue. In the case before me I do not accept the argument of the complainant that the respondent mis-applied the rules and I agree therefore with the finding of the Court that the rules changed with effect from 1 January 2005 after the resignation of the complainant. The anomalous situation that applied to the claimant in the case considered by the Court also applies to the complainant in this case.

Complaint No. CA-00011054-001:

This relates to a dispute under the Industrial Relations Act, 1969. Arising from the findings set out above I recommend that the complainant accepts that the respondent acted in a bona fide manner in relation to his entitlement to a retirement gratuity at the time of his resignation from the fire service. The respondent for their part should accept that the complainant’s position at present is anomalous, has been identified as such by the Labour Court in AD0751 and therefore needs to be addressed. The respondent should therefore identify if any progress has been made by the parties to the agreement in addressing this anomaly as suggested by the Court and, if so, to implement that outcome. If no developments have taken place I recommend that the parties to this dispute engage with each other without delay on the basis that both sides accept that the position of the complainant with regard to the retirement gratuity is anomalous and that consequently this situation needs to be addressed.

Complaint No. CA-00011054-002:

This is a complaint under the Payment of Wages Act, 1991. For the reasons set out above I find that this complaint is not well founded and is accordingly dismissed.