ADJ-00008325

Complainant

Respondent

Anonymised Parties

An Employee

A Local Authority

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997

CA-00010987-001

26/Apr/2017

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

CA-00011237-001

10/May/2017

The Complainant has been employed with the Respondent since 2004, in the role of Senior Executive Solicitor. The Complainant was appointed acting Law Agent for the Respondent for the period 31 December 2011 to 11 December 2016, when a permanent appointment was made to this position.

The Complainant commenced annual leave on 25 November 2016. On 12 December 2016, the Complainant's acting opposition ceased and she returned to her substantive grade of Senior Executive Solicitor on that date. The Complainant continued on annual leave 1 to 2 March 2017.

The Complainant's representative stated that, during the period of secondment as Law Agent, she was paid at the appropriate higher rate for that role.

CA-00010987 (Organisation Working of Time Act 1997 – Annual Leave)

According to the Complainant's evidence, she had accrued 24 days annual leave and eight "outside standard hours" (OSH) days while on secondment. The Complainant sought to have the annual leave and OSH days paid at the rate applicable to that of a Law Agent, on the basis that the leave had been accrued during the period acting up in that grade.

It was further stated in support of her complaint that, had the Complainant taken the annual leave or the OSH days during the period of time she was acting up, both would have been paid at the rate applying to the higher grade.

However, the Complainant stated that when she sought her holiday pay and OSH payment at the rate applicable to a Law Agent, the Respondent advised that payment relates to the grade the individual is on at the time the leave is taken, which, at that point, was her substantative grade.

In support of her complaint, the Complainant’s representative made reference to Section 20 of the Organisation of Working Time Act, 1997, and Regulation 3 (2) of the Organisation of Working Time (Determination of Pay for Holidays) Regulations 1997 (SI 475/1997). In particular, it was contended that the applicable rate for calculating holiday pay relates to that paid in respect of the normal weekly working hours, last worked by the employee, before the annual leave commences.

Consequently, based on the above, the Complainant contends that the "normal weekly rate" for the purposes of holiday pay, in respect of leave taken by her immediately after 12 December 2016 is therefore that "paid in respect of the normal weekly working hours last worked by the employee before the annual leave", i.e., that applicable to the grade of Law Agent.

Finally, it was stated that the Complainant's financial loss in respect of the 24 days of annual leave amounted to €439.92, which is based on the daily differential, between the higher and lower rates, of €18.33.

CA-00011237 (Payment of Wages Act, 1991 – OSH days)

The Complainant's claim, under this Act, relates to 8 OSH days, accrued during her time acting as Law Agent, when she worked days on which she was not rostered. In this regard, the Complainant contends that she accrued 8 OSH day or time off in lieu.

The Complainant contends that the total amount of wages properly payable in respect of these days, should be calculated according to the pay applicable to the grade of Law's Agent.

In support of her claim, the Complainant referred to Section 5 (6) of the Payment of Wages Act, 1991.

Finally, it was stated that the Complainant's financial loss in respect of the 8 OSH days amounted to €146.64, which is based on the daily rate differential of €18.33.

CA-00010987 (Organisation of Working Time Act 1997 – Annual Leave)

The Respondent stated that the purpose of holiday pay is to put the worker, during that period of rest, in a situation which is, as regards the salary, comparable to periods of work. The Respondent believes that this objective was achieved in the Complainant's case since, in respect of her annual leave,   she received an amount, which is determined in such a way as to correspond to the normal remuneration received by her at the time of taking the annual leave.

In support of this position, the Respondent referred to Section 20 (2) (b) of the Organisation of Working Time Act, 1997, which states that pay for annual leave shall "be at the normal weekly rate or, as the case may be, at a rate which is proportionate to the normal weekly rate."

The Respondent also referred to Section 20 (4) of the OWT Act, which defines "normal weekly rate" as "the normal weekly rate of the employee concerned’s pay determined in accordance with regulations made by the Minister for the purposes of this Section".

The Respondent further contends that Regulations pursuant to this provision are set out in the Organisation of Working Time (Determination of A for Holidays) Regulations 1997 (SI 475/1997). According to the Respondent, the determination of the present dispute turns on the true construction of Article 3 (1) and (2) of the aforementioned Regulations, as these provide, as follows:

1) The normal weekly rate of an employee's pay, for the purposes of sections 20 and 23 of the Act (hereafter in this Regulation referred to as the "relevant sections"), shall be determined in accordance with the following provisions of this Regulation

It is contended by the Respondent that they never refused any application for annual leave from the Complainant. According to the Respondent, the Complainant could have requested to take leave when she was in the acting opposition but chose not to do so.

The Respondent further stated that they were not aware of any facts supporting the proposition that the Complainant was unable to take her leave. It was further stated that the Complainant was not prevented from taking her annual leave when she was Acting Law Agent but instead chose to take annual leave when she reverted back to her substantive role of Senior Executive Solicitor.

In support of their position in this regard, the Respondent stated that the issue, of pay entitlements whilst on annual leave, has been the subject of significant consideration at the European Court of Justice (ECJ - C. D. Robinson-Steele v R. D. Retail Services Ltd (C-131/04) and at the Labour Court (DWT0516 - Hidden Hearing Ltd. and Smart [2005].

The Respondent further referred to the Labour Court DWT1550, Babianskas v First Glass Ltd, in which it is stated that: "the clear purpose of the relevant provisions of SI 475/97 is to ensure that during either annual leave or public holidays an employee receives no less (or no more) then she or he would have received if he or she was working during the period in question".

The Respondent stated that the situation pertaining to the Complainant is identical to that being referred in the previous Labour Court case. The Respondent further stated that what the Complainant is requesting would, in fact, confer an additional benefit on her, greater than what is provided in the provisions of the Payment of Wages Act.

In further submission, the Respondent stated that, if the arguments being put forward by/or on behalf of the Complainant were correct, then the reverse scenario should also apply. Therefore, the Respondent contended that, any annual leave accrued by the Complainant prior to commencing her acting up role, which she subsequently took during the period of her acting up, should have been paid at the rate of pay applicable to the lower grade of Senior Executive Solicitor. The Respondent contends that such a scenario would be contrary to the principles established in both the ECJ and the Labour Court cases cited above.

The Respondent further stated that this would also apply in any situation where an employee was promoted or received a pay increase. It was contended that, unless such changes occurred at the commencement of the leave period, any annual leave accrued prior to the promotion/pay increase, would have to be paid at a lower rate.

The Respondent stated that staff acting in a higher grade, either for short or extended periods, is common practice across the public sector. The Respondent contends that, in this instance, it applied the position, as set out by the Labour Court in Babianskas v First Glass Ltd., whereby an employee on annual leave "receives no less (or no more)” than they would receive if they were working during the period in question.

Consequently, the Respondent stated that it was satisfied that it had met its statutory obligations under the Payment of Wages Act. It is contended that the Complainant was paid at the same rate in respect of annual leave as that applying to her while at work. Therefore, it is submitted that the Complaints claim had no merit and must fail.

CA-00011237 (Payment of Wages Act, 1991 – OSH days)

a)     Preliminary Point:

At the outset, the Respondent raised a preliminary point in relation to "time off in lieu" (Outside Standard Hours).

The Respondent submitted that the claim under the Payment of Wages Act as set out in the Complainant's complaint is excluded from the provisions of the Act. Accordingly, the Respondent stated that it did not accept that “time off in lieu" (OSH) falls within the contemplation of wages as provided for within the provisions of the Act.

In support of this position, the Respondent referred to the definition of "wages” as set out in the Act at Section 1 as follows:

“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 giving such notice:  

Provided however the following payments shall not be regarded as wages 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 a result of the above, the Respondent contends that “time off in lieu" (OSH) must be considered to be a "payment in kind", which is specifically excluded under the Act.

c)      Substantive claim:

Without prejudice to the Preliminary Point set out above, the Respondent states that the Complainant's complaint, as set out, is ill founded. In this regard, the Respondent points to the Complainant’s reference to Section 5 (6) of the Act, in support of the claim that "the total amount of wages that is properly payable" has not been paid, in this instance.

The Respondent contends that, before any decision can be made on a breach of the Act, it has to be determined if the amount in question is properly payable. According to the Respondent, the basis of the Complainant's complaint is that she should have been paid at the higher rate for the time which she took off in lieu after she ceased the acting-up Role. The Respondent further claims that, at the time she took her time off in lieu, she had reverted to her substantive grade. Therefore, the Respondent claims that the Complainant was paid at the correct rate at that time in accordance with her contract of employment.

The Respondent contended, therefore, that the complaint under the Payment of Wages Act is not well founded as payment in accordance with the rate of pay provided for in a contract of employment must be considered to be the “amount properly payable’.

Before commencing detailed consideration of the two complaints presented by the Complainant, it was necessary to establish some facts pertaining to the context in which both claims are grounded.

There was some conflict in the evidence presented by both sides in relation to the correct dates pertaining to the Compliment’s period of time in her acting-up role, as Law Agent and when she commenced annual leave.

The evidence presented on behalf of the Complainant indicated that she commenced in her role as acting Law Agent in July 2012. Evidence presented on behalf of the Respondent suggested that she commenced in that role on 31 December 2011. However, both parties agreed that the period of secondment ceased on 11 December 2016.

With regard to annual leave, the evidence presented by the Complainant suggests that she commenced annual leave on 25 November 2016, which was a number of weeks prior to the conclusion of her secondment on 11 December 2016. Evidence presented by the Respondent indicates the Complainant's first day of annual leave was on 21 December 2016.

Having carefully considered all the evidence presented in this regard, I am satisfied the Complainant's annual leave commenced on 25 November 2016.

I am further satisfied, based on the oral evidence presented at the hearing, that, for the period between 25 November 2016 on 11 December 2016, the Complainant’s annual leave was paid at the rate applicable to the Law Agent grade. Therefore, the claim pertains to annual leave taken in the period post 12 December 2016, which, the Complainant claims, was accrued during the time when she acted as Law Agent.

According to the Complainant's evidence, the accrued leave was agreed with and carried over with the express permission the Respondent. The evidence submitted by the Respondent suggested that the Complainant was never refused annual leave and, furthermore, indicated they are unaware of anything that might have prevented her from taking her leave, while in the role of acting Law Agent.

Notwithstanding the conflict in the evidence between the parties in this regard, I am satisfied that the leave on which at Complainant's claim is based, relates to 24 days annual leave and 8 OSH days, all of which were carried over from her period of secondment in the role of Law Agent.

Consequently, based on the above, I considered the two specific elements of the Complainant's claim, as follows:

CA-00010987 (Organisation of Working Time Act 1997 – Annual Leave)

The Complainant’s claim under the Organisation of Working Time Act, 1977, related to 24 days annual leave she claims were accrued, with the agreement of the Respondent, during the period of time when she was acting as Law Agent. The issue for determination is the rate of pay at which this leave should be paid.

The Complainant commenced her annual leave on 25 November 2016. This leave was paid at the higher grade rate up to 11 December 2016, on which date the Complainant's period of secondment ended and she reverted to her substantive grade. The Complainant contends that, as the annual leave is accrued during the secondment, it should be paid at the rate attaching to the higher grade. On the other hand, the Respondent contends that the rate of payment should be linked to the grade the Complainant was on when she was taking to leave, in this case the lower rate attaching to her substantive grade.

Both parties agree that the relevant legislation in relation to this issue is the Organisation of Working Time (Determination of Pay for Holidays) Regulations, 1997 (S.I No. 457 of 1997). In particular, Section 3 (2) of this Regulation, stipulates, inter alia, that the normal weekly rate to be used in the calculation of holiday pay shall be that: “paid in respect of the normal weekly working hours last worked by the employee before the annual leave (or the portion thereof concerned) commences or, as the case may be, the cesser of employment occurs. “

It is clear that the Complainant's last “normalweekly working hours" prior to her commencing annual leave on 25 November 2016, were at the grade of Law Agent. Consequently, applying Section 3 (2) of the Regulation as set out in the previous paragraph, I am satisfied that the rate applicable to the annual leave in question should be that of the Law Agent grade.

In challenging the Complainant's claim, the Respondent made particular reference to the Labour Court case (DWT1550 - Babianskas v First Glass Limited) in which the Court stated that: "the clear purpose of the relevant provisions of S.I. 475/97 is to ensure that during either annual leave or public holidays an employee receives no less (or no more) then he or she would receive if he or she was working during the period in question".

Having carefully considered the matter, I do not accept the Respondent's contention that the circumstances of the case before me are exactly the same as those referred to in the above quoted Labour Court case. Section 3 (2) of the Regulation clearly states that the appropriate rate that should apply to the Respondent’s taking of the leave, should be that applying in her last week at work prior to the commencement of the leave. In my view, to pay the Complainant this at a lower rate would be in contravention of the Regulation.

Consequently, based on the above I find that the Complainant's complaint is well-founded and that the 24 days annual leave in question should be paid at the higher rate applying to the grade of Law Agent. 

CA-00011237 (Payment of Wages Act, 1991 – OSH days)

In response to the Complainant’s claim under this Act, the Respondent raised a preliminary point regarding whether or not "time off in lieu"/OSH time” meets the statutory definition of "wages", as set out in Section 1 of the Act. In particular, the Respondent contends that "time off in lieu" must be considered as a "payment in kind" and, therefore, is one of the payments excluded under the Act.

The concept of "time off in lieu" usually applies at a local level. It is generally seen as an alternative to the payment of overtime. It normally applies in situations where employees are requested to work time in addition to their normal working week. In that context, "time off in lieu", in effect, replaces, at a later date, an employee's original "free time", which was given up when they agreed to work the additional time.

Based on the above, I do not accept the Complainant's contention that "time off in lieu" represents payment for work done.   Rather, it represents the replacement of free time which the employee voluntarily gave up at an earlier stage. Clearly, where a "time off in lieu" system exists, there is no adjustment to the employee's salary and no cost to the employer, as is the case, for instance, where overtime is paid.

Taking all of the above into consideration, I am satisfied that "time off in lieu" does not constitute "wages", as defined in Section 1 of the Act. I am satisfied that it is more akin to a "payment in kind", which is one of the payments not regarded as "wages", as set out in Section 1 of the Act.

Consequently, I find the Respondent’s preliminary point is well founded and I find in their favour. As a result, the Complainant's claim in relation to "outside standard hours" days must fail.

Having carefully considered all of the evidence adduced and based on the considerations/findings as detailed above, I set out my decisions in relation to the two complaints, as follows:

CA-00010987 (Organisation of Working Time Act 1997 – Annual Leave)

Based on the considerations detailed above, that the appropriate rate at which the accrued annual leave should be paid is that applicable to the grade of Law Agent, I find in the Complainant's favour and award her €493.92, based on 24 days annual leave at a daily differential between the grades of €18.33. This sum is subject to the normal statutory deductions in relation to pay of this nature.

CA-00011237 (Payment of Wages Act, 1991 – OSH days)

Based on the considerations detailed above, that "time off in lieu" is a payment in kind, which is one of the excluded payments, as defined by Section 1 of the Payment of Wages Act, 1991, I find that the Complainant's complaint in this regard is not well founded and, as a consequence, most fail.

Organisation of Working Time

Payment of Wages

Accrued Annual Leave

Time Off in Lieu