Complainant

Respondent

Anonymised Parties

Video Producer

A Digital Media Company

Act

Complaint/Dispute Reference No.

Date of Receipt

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

CA-00015157-001

20/10/2017

The Complainant brings a complaint against his employer in connection with the failure by the employer to pay remuneration as and when it was contractually due to become paid

The Respondent, in it’s defence, cited difficulties with cash flow in the company. The Respondent was hopeful that all outstanding remuneration would be payable in due course.

I have carefully listened to the evidence tendered in the hearing. The Respondent provided me with a pre-prepared submission and the Complainant and his colleagues were given an opportunity to read through same.

The Respondent was represented by the CEO and the Financial Officer (engaged on a part-time basis).

This Complainant detailed his deductions. Much of the Complainant’s case was presented, with his consent, by his colleague SC. This Respondent is a seemingly successful Media company which generates income through advertising. The Company creates in-house material and/or sources U-Tube footage from which revenues can be generated. The Respondent receives a monthly payment from a well known multinational that provides global Internet services including a popular search engine. This monthly payment can be anywhere from €40,000.00 to €60,000.00 depending on Revenues generated. Annual turnover ranged from €475,000.00 to €750,000.00.

The CEO indicated that the monthly remuneration/salary bill was in the region of €39,000.00. There have undoubtedly been cash flow issues in the Respondent company. Staff were due to be electronically paid their September salary straight into their nominated personal accounts on the last day of the working month i.e. 30th of September 2017. This did not happen and in fact the Employees (at least 12 of them) were not paid their salaries until the 24th of October.

It is a fundamental of any Employment Contract that the Employees remuneration will be paid in full and on time per the agreement reached in the Contractual relationship. The Complainant and his colleagues were very fair in not belabouring the point, but there can be no doubt that a delay of this sort can create personal stress   as mortgages, rent, child minding and utility bills do not get paid.

I am satisfied that the observations of Ms. Justice Finley Geoghan in the case of Sean Senan Histon -v- Shannon Foynes Port IEHC292 are applicable wherein she stated (in considering Section 5 of the Payment of Wages Act 1991 :-

“It does not appear to me arguable that a failure to pay the Plaintiff any part of his salary is not a deduction from his salary within the meaning of Section 5 of the Act of 1991”

On this basis I am satisfied that the non-payment of the entire monthly salary amounts to a deduction within the meaning of the Act. I consider this to have been a deduction and although belatedly remedied (through a system of drip feed) it is a breach of the Act. The Workplace Relations Complaint Form issued on the 20th of October – a few days before the final tranche of the September payment was in fact paid.

At the hearing today, it was revealed in the course of evidence that the staff are once again being denied their remuneration. This time the salary they were due to receive at the end of December 2017 has not, as of the date of hearing, been paid to the Complainant and his colleagues. It is noted that the December payment was due to include a bonus or compensatory payment – promised by the CEO in the aftermath of the previous non-payment of wages due.

The Complainant detailed the constant communication with the CEO looking for pay and looking for some understanding as to why pay was not forthcoming. This emailing back and forth between the Employees and the CEO – liberally peppered with long periods of silence from the CEO - has been going on since about the 19th of December 2017 to date (January 19th). Meetings were called and the CEO explained how the money was always on the point of arriving. How he was talking to the Bank. How he was waiting on the big monthly client cheque. The staff even got payslips – though no money deposited into their accounts. I accept that the CEO’s position was very difficult. I accept, that there was no attempt to withhold remuneration by reason of a Mala Fides on his part – the Company has simply been cash strapped.

The Complainant and his colleagues put on a very united front in this regard. There seems to be little doubt that this workplace has inspired loyalty amongst its workforce and it is to their credit that the employees herein continued to turn up for work even though they had no idea of their getting paid. I was told that there is no money in petty cash so that day to day operating has become problematic.

The CEO was forthright in his admission that the Company has been having cash flow issues. The CEO is putting his own funds into the business to try and get it over this difficult patch. In ease of his employees in the October period I note that the CEO had withdrawn cash and hand delivered €200.00 cash payments to employees to assist in meeting their bills. The CEO was hopeful that his employees would be fully paid within the next few days.

There is a suggestion that Revenue have forced a freeze on accounts arising out of VAT, PAYE, PRSI and other issues. The Financial Operator (CR) gave evidence in this regard but surprisingly did not appear to think this had anything to do with his function and suggested that the Company Accountants may have been at fault.

I would be concerned generally at the lack of guidance being sought by the CEO. There is no HR function in the workplace and the Employees have too often been left entirely in the dark. Other Directors when contacted did not assist. However, such observations are beyond my remit.

The claim herein relates to breaches of the Payment of Wages Act and, in particular, I am satisfied that the Complainant’s claim is well founded and that the Employer has made unlawful deductions as prohibited by the 1991 Act.

The Complainant gave evidence of the deductions as follows:

The Complainant was ultimately paid his salary for September (being €2,916.00 gross less deductions). The Complainant was advised his December package would include an ex gratia payment of €673.00 to make up for the delay in the September salary and in accordance with the acknowledged Bonus structure.

The Complainant had not been paid his December salary as of the hearing date.

Pursuant to Section 6 of the Payment of Wages Act 1991 I direct the employer to pay to the employee, compensation in the amount of €2,500.00.