Complainant

Respondent

Anonymised Parties

Tax Manager

Tax Consultants

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-00012956-001

03/08/2017

The complainant was employed by the respondent from the 28th of March 2013 until the 10th of February when he resigned from the employment. He is claiming that he is entitled to a bonus payment of €20,000 for 2016 under the Payment of Wages Act, 1991. The respondent says that the complaint was referred outside the statutory 6 months period for referring a complaint to the Director General.

The complainant was employed by the respondent as a Tax Director on the 28th of March 2013. He was provided with a contract of employment which provided for the payment of a performance bonus of 20% of salary. He gave notice on the 12th December 2016 and left the employment on the 10th February 2017. He did not receive a bonus for 2016.

The complainant said that he submitted a claim to the Inspection Services of the WRC under the Payment of Wages Act and this was investigated and it was unsuccessful.  

The complainant submitted that he was due a performance bonus and that it was payable each year in December. He accepted that the condition for the payment of the bonus was satisfactory performance during the year. He said that during 2016, he was offered a promotion within the company to become a partner and he was also offered an opportunity to acquire equity in the practice. He said he received another job offer in December 2016, which he decided to accept and he handed in his notice on 12 December 2016. The bonus for 2016 was not paid. He believes that given the fact that he was offered a promotion during the year it would be a reasonable to claim that his job performance was not satisfactory. He said that he was paid a bonus every year he was in the employment the sales target was not met the previous year either but he believes it was never a condition of his bonus the bonus was delayed in December 2015 because the company has cash flow problems. He was paid the bonus in three installments in the first half of 2016. The complainant submitted that he is entitled to the bonus for 2016. He accepts that there was a problem with the technical advice given to one client. The advice had to be changed and the solicitors had to draw up new documents. However, he submitted that it was a collaborative effort between himself and the respondent. He also said that there was a sales target which he did not meet but he did not meet it the previous year and his bonus was paid. He said there were no grounds for not paying the bonus and he believes it would have been paid if he had not handed in his notice.

The complainant was employed by the respondent under a contract of employment on 28 March 2013. He was employed as a senior tax manager. The respondent is a specialist tax practice offering tax and accounting services to both business and private clients. The complainant‘s claim concerns a bonus payments which is provided for in his contract of employment. The contract provides that “a bonus of 20% of salary will be payable in December each year subject to satisfactory performance. “    

Preliminary point on Time Limits

The respondent’ solicitor submitted that the complaint is outside of the statutory time limit.

Section 41 (6) of the Workplace Relations Act, 2015, which governs the time frame within which a claim of this nature should be made, provides for a six month time limit from the date of the contravention of the Act.

Section 41 (8) provides for an extension of the six month time limit if reasonable cause for the delay can be shown.

According to the contract of employment any bonus was payable at the end December each year. Therefore, the alleged non-payment occurred as soon as the December in issue passed without the payment being paid. The complaint was lodged on 3 August 2017. The deadline for the lodging of this complaint expired on the last day of June 2017. Therefore, this complaint is out of time.

It was submitted that on the complaint form the complainant states that the date on which he should have received the payment was 10 February 2017. This is incorrect, it doesn’t not accord with contract of employment which he is relying upon and is inconsistent with how the respondent paid the bonus when earned.

The respondent submitted that the complainant is a Fellow of the Chartered Accountants Ireland and an AITI Chartered Tax Advisor with over 15 years’ experience in practice according to his profile. He moved from the job with the respondent to another job in taxation advice. He is a professional and expected to provide professional services to clients which he did throughout the six month period within which he had opportunity to file his claim. However, he failed to do so. There is nothing to indicate that there is any reasonable cause as to why the complainant did not file his complaint in a timely manner.

The two other professional staff with similar ability to earn a bonus were paid the bonus in December each year in line with their contract of employment. The complainant was paid his bonus in December 2013 and 2014 when his performance for the year was satisfactory.

In the present case, the complainant has failed to refer a complaint within the timeframe required by the statute. It was submitted that the complainant has to comply with section 41 (6) unless he can demonstrate there was reasonable cause for the failure to refer the complaint within the six month time period.

It was submitted that the complainant made a complaint to the Inspectorate of the WRC under the Payment of Wages Act and following an investigation by an inspector no breaches were found.

Substantive issue

The payment of a bonus each year was subject to satisfactory performance. In December 2013, the complainant‘s first year of employment, he was paid a bonus and his performance that year was in line with expectations. In December 2014, he was paid a bonus and his performance that year was in line with expectations    

In 2015 the complainant‘s performance was not satisfactory. The respondent made the complainant aware of her dissatisfaction with his performance and it was for this reason that he did not get a bonus in December 2015. With a view to encouraging the complainant to improve his performance and giving him an opportunity to make up for the shortcomings in 2015, she would make a payment to him in 2016, which would be the equivalent to what he could have earned had his performance been satisfactory in 2015. In reviewing the performance of the complainant for the next seven months the respondent made payments to the complainant in January 2016, June 2016 and July 2016 which were the equivalent of the bonus.

During 2016, an item of particular concern to the respondent arose in relation to his performance. The complainant was advising on a share transaction agreement and corporate restructure. The respondent sought an update on this transaction and she did not receive satisfactory answers. The respondent then discovered that the complainant had given incorrect tax advice which could have serious implications for the business. The respondent had to intervene to sort the matter and alternative solutions were put in place for the client. In November 2016, it came to the respondent’s attention that there were further examples of incorrect advice being given to clients by the complainant.   She said that she had to intervene and identify alternative solutions at an additional cost to the company.

It was submitted that the complainant did not earn a bonus for the year 2016 based on his performance because the payment of the bonus is dependent on satisfactory progress and performance as per the contract of employment. It was submitted that the complainant was well aware he was not entitled to a bonus and he did not raise any query concerning his bonus before he left the employment whereas he did raise a query in relation to his annual leave.  

The first matter I have to consider is whether the complaint was referred to the Director-General within the six months statutory timeframe as set out in section 41(6) of the Workplace Relations Act,   2015 which states:

“subject to subsection (8), an adjudication officer shall not entertain a complaint referred to him or her under this section if it has been presented to the Director General after the expiration of the period of 6 months beginning on the date of the contravention to which the complaint relates.“

I note the complainant left employment on the 10th February 2017 and he referred the complaint to the Director General on 3 August 2017. The first matter I have to determine is the date the alleged contravention of the Payment of Wages Act, 1991 occurred.   Paragraph 6.4 of the complainant‘s contract of employment states as follows “bonus: performance bonus of 20% of salary will be payable in December each year subject to satisfactory performance. The payment of a bonus on a once-off or repeated basis shall not give rise to a contractual entitlement to same.”

It is clear therefore, that the bonus was due in December each year and that the complainant was paid a bonus in December 2013 and 2014. I note that the complaints bonus for 2015 was not paid in December because of performance difficulties and he was paid an equivalent to the bonus in three installments during 2016. However, the two other employees bonuses were paid in December 2015 and 2016. I am satisfied therefore, that the date the contravention of the Act to which the complaint relates was no later than 31st of December 2016. Therefore, the complaint should have been presented to the Director General no later than the 30th of June 2017.

Section 41 (8) provides for an extension of the 6 month time limit for referring a complaint.

“An adjudication officer may entertain a complaint or dispute to which this section applies presented or referred to the Director General after the expiration of the period referred to in subsection (6) or (7) (but not later than 6 months after such expiration), as the case may be, if he or she is satisfied that the failure to present the complaint or refer the dispute within that period was due to reasonable cause.”

The complainant did not claim that the delay was due to reasonable cause. He said that he referred a claim to the Inspection Service of the Workplace Relations Commission under the Payment of Wages Act 1991. The respondents evidence was that the complaint was dealt with by the inspection services and no breach was found. I am satisfied therefore that this is a completely new complaint. I note that the complainant submitted that he had a telephone conversation with an officer from the WRC which was followed up by an email on the 11 May 2017 in which he was informed that there was a six month time limit under the Act to make a claim to the Director General.   I note that the complainant did not refer the complaint immediately and waited until 3 August 2017 to make a referral. Given the complainant’s professional qualifications and his employment as a senior tax manager, I am of the view that he would have no difficulty in ascertaining the applicable statutory time limits, particularly given that he had been made aware that there were time limits under the Act. Therefore he has not established any reasonable cause for the delay.

I find that the complaint was referred outside the statutory time limit and for the above reasons I find that the complainant has not established any reasonable cause for the delay.                    

I find that the complaint was referred to the Director General outside the six month time limit as provided for in Section 41 (6) of the Workplace Relations Act, 2016.   Therefore, I have no jurisdiction in the matter.

Statutory time limits, payment of bonus