ADJ-00013354

Adjudication Reference: ADJ-00013354

Parties: 

Complaints:

Date of Adjudication Hearing: 2nd May 2018

Workplace Relations Commission Adjudication Officer: Seán Reilly

Procedure:
In accordance with Sections 41 and 80 of the Workplace Relations Act 2015, Section 39 of the Redundancy Payment Act 1967, Section 6 of the Payment of Wages Act 1991 and following the referral of the complaints to me by the Director General, I inquired into the complaints and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaints.

Background:
The Complainant was submitting that (a) she had been made redundant by the Respondent and had not been paid her statutory redundancy and (b) she had not been paid wages properly due to her by the Respondent.    The Respondent was denying that the Complainant had been made redundant by him and that she was due any wages from him.

Summary of Complainant’s Case:
The Complainant said she has worked for the Respondent since 2013.

The Complainant said that the Respondent runs an audio mastering studio and she was employed by him as a Mastering Engineer, Studio Manager and Vinyl Engineer.

The Complainant said that she worked 35 hours per week and was paid a gross wage of €1,923.76c per month, which she said worked out at €1,700.00c nett per month.

The Complainant said that on 24th November 2017 the Respondent issued her with a letter entitled “Amendment to Contract of Employment” and this states that the amendment is “a continuation of contracts dating from 01/09/2013.”

On 18th December 2017, the Respondent spoke to the Complainant and stated that he had an alternative to offer the Complainant.    She said this alternative consisted of her employment terminating but then entering into a contract for service as an independent/outside contractor with the Respondent and she said it did not include a redundancy payment.   On 19th December 2017 the Complainant informed the Respondent that she did not accept the proposal as it was not a reasonable offer or alternative.

The Complainant said that on 27th December 2017 she emailed the Respondent and stated that she believed that she should have been given a notice of redundancy and informed the Complainant of the amount of the redundancy payment that she should receive.    She also informed him that as she had not received the official notice and that she was posting him the official notice requesting it.    The Respondent responded on 2nd January stating there was no redundancy in her contract of employment, that he was away but would discuss it further with her on his return.  The Complainant replied by email of 3rd January 2018, that it did not need to be in her contract of employment and restating her entitlement to a redundancy payment.    The Complainant said that in a telephone call with the Respondent around the time of the emails the Respondent mentioned that he did not have sufficient money to pay the lump sum.

The Complainant said she worked out her notice with the Respondent and finished up working for him on 5th January 2018.   On 15th January 2018, the Respondent emailed the Complainant her P45 and her final payslips and went on to state in that email that she had not accepted his “new payment scheme” but that the offer would remain open for 30 days, following which he would proceed to hire another person for the position.    The Complainant responded explaining the position regarding redundancy once again.    There followed email correspondence in which the Complainant outlined to the Respondent her position regarding the ‘alternative role’ she had been offered.  

The Complainant also notified the Respondent that she had not been paid the full amount due to her for her final period of work and she also stated that she had not received her P60 for 2017.

Redundancy Act 1967 Complaint:                                                                                                                              The Complainant said she was effectively made redundant with 6 week’s notice from 24th November 2017, which expired on 5th January 2018.

The Complainant said an employee is dismissed by reason of redundancy if her/his dismissal is attributable “wholly or mainly” to one of the 5 situations stated in Section 7(2) of the Redundancy Payments Acts, which the Complainant quoted.

The Complainant said that according to the Respondent’s own correspondence of 24th November 2017 there were insufficient funds for her continue to carry out her role and the Respondent stated he would carry out the work himself.

The Complainant sought payment of the statutory redundancy payment from the Respondent and she has not received it.   She has not been issued with a Redundancy Certificate and she has not applied to the Department of Social Protection for the payment.   

The Complainant said the Respondent in his written reply to her Complaint Form claims that he has only been her employer since 1st January 2017, following a named limited company ceasing trading.   He states he paid her from his personal bank account and that her roles and conditions of employment changed on this date.   The Complainant said that the Respondent has not provided a signed contract of employment showing the changes in her terms and conditions of employment and the Complainant can confirm that her terms and conditions of employment remained the same and that there was no break in her continuity of employment.    She said that when the named Company ceased trading she simply continued in her previous roles within the Studio.

The Complainant submitted copies of the various contracts that were issued to her during her employment from September 2013 to January 2018.    She said that the contracts are purportedly with a number on entities but in all them the employer is stated to be the Respondent and he signed each one of them.    The Respondent also relies on Regulation 4 of the EC Protection of Employees on Transfer of Undertakings Regulations 2003.

The Complainant said the Respondent has been running the same mastering studio under different company names for more than 20 years.

The Complainant said it is her position that her employer was the Respondent and that she has the requite service claimed for under the 1967 Act.

It is the Complainant’s case that Section 15 and 20(4) of the 1967 Act do not apply to the alleged alternative offer made by the Respondent.   She said the offer was for a contract for services and not an employment contract and would have meant the following:

That her employment would still be terminated without any redundancy payment

That she would be self-employed and would have no job security

That what was on offer was not the same role as it was as cutting engineer only and did not include her role as mastering engineer and studio manager.

She would have lost the employee benefits such as paid leave, fixed wage and certainty of income.

The proposed payments were on a per master basis and potentially that could mean zero payments.

The terms and conditions clearly meant that she would no longer be an employee and in any event, were a serious reduction in her terms and conditions of employment with the Respondent.
The Complainant submitted that it was not unreasonable for her to refuse the offer.

The Complainant said the Respondent in his written response stated that her employment was not terminated due to insolvency, closure of the business or a reduction in the number of employees.   She said that however, in his own letter to the Complainant he states that her employment is being terminated due to insufficient income coming into the Company.   She said that he also verbally said to her that this was a reduction in the number of employees due to the financial position of the firm.   He further stated that he would be carrying out her duties himself and he confirms this in his response to the complaint.

The Complainant said the amount due to her in statutory redundancy payments is €4,306.00c

Payment of Wages Act 1991 Complainant:                                                                                                       The Complainant said she had not received her wages due to her for the period in January when she was still employed by the Respondent.   She said the Respondent in his response to the complaint states the Company Accountant calculated the amount due to her to be €426.18c, which is in agreement with the amount being sought by her and that therefore there is agreement on the figure due to her.   She said the Respondent also sent her a payslip showing the amount due (copy submitted).    She said the Respondent also acknowledged that he has not made the payment to her.

The Complainant said the Respondent has alleged that there is money due to him from the Complainant and that for this reason he is withholding payment of her wages.   She said that firstly, she completely denies the accusations of the Respondent and has already dealt with her response to his allegations in an email to him on 9th February 2018.    The Complainant said that she would not be going into these matters in submissions unless the Adjudicator wishes to discuss any aspect with her then she will give evidence.

The Complainant said that notwithstanding the Respondent’s claim that there is money due to him, which she denies, Section 5 of the 1991 Act states that an employer must pay wages that are properly payable to an employee.

The Complainant said an employer cannot make a deduction from an employees’ wages except in certain defined circumstances.   She said that one of these circumstances is a term of the employee’s contract allows for such a deduction.   She said her contracts of employment do not allow for such a deduction and she said that she has not consented to such a deduction.    The Complainant said it is her position that the Respondent has not paid her wages due to her.    She submitted that the amount due is €426.18c.

The Complainant sought favourable decisions.

The Complainant gave direct evidence that supported her complaints and she answered questions.   She said she did not consider taking the alternative job offered on a trial basis for a period of 4 weeks or less and then refuse it if she did not consider it suitable based on her experience doing it which she could have done under the Redundancy Payment Acts without affecting her right to receive a redundancy payment, she said that she did not.

Summary of Respondent’s Case:
The Respondent was denying and rejecting both complaints.

The Respondent said that he runs a business that is an audio mastering studio and they currently cut master lacquer discs for the global music industry.    The Respondent stated that he and his business are solvent and have never been insolvent.

The Respondent gave a history to the entities involved in the business during the Complainant’s time worked for it (I cannot name them here as in accordance with the provisions of the Workplace Relations Act 2015 I cannot include any information that would tend to identify any of the parties (or any other entity or person) involved in the matter).

The Respondent said on 1st January 2017 he personally employed the Complainant and he said that she was not employed by a company and he said that her roles and conditions changed on that date

The Respondent said that his contract with a named entity ceased on 1st October 2017.   He said that he approached the Complainant to discuss new options and opportunities for her employment.   He said that a new vinyl record manufacturing company was opening in a named area and the Respondent was contacted in relation to providing them with master lacquer cutting services.    He said that he included the Complainant in all discussions with this Company.   The Respondent said that he made it clear at this stage to the Complainant that her current employment contract would be terminated and that a new contract would be agreed based on the new workload.

The Respondent said that on 24th November 2017, he formally gave the Complainant in writing the agreed 6 weeks of termination of her employment contract.   He said that on the following day, 25th November 2017, he held a formal meeting with the Complainant to offer her a new contract with better pay, conditions and less working hours.   He asked the Complainant to consider the offer and come back the following day for a meeting to accept or decline the offer.    The Respondent said that on 26th November 2017 the Complainant chose not to accept the new offer.

The Respondent said that he was disappointed with the Complainant’s decision, but he wrote the Complainant a glowing reference and he contacted his Accountant and Revenue to formally instigate the final wage payments and issue the Complainant with her payslips and her P45.

The Respondent said that an employee can only be made redundant in circumstances such as insolvency, the closure of the business or a reduction in the number of employees.   The Respondent said that none of these occurred.    He said the Respondent chose to decline the new offer made to her for the same duties.    The Respondent said they continue to carry out the work the Complainant used to do.  He said that on this point alone the Complainant cannot have been made redundant.    He said it was her decision to not continue working and he said that other points apply.

The Respondent said that the Complainant’s wages for January were calculated by their Accountant.   He said they correctly calculated the amount due as €426.18c.

The Respondent said that the Complainant currently owes them in excess of €426.18c through unauthorised work she did during working hours, using Respondent equipment and procedures.   He said they have requested her to pay them the sum involved on a number of occasions, but she has not done so to date.   He said that this matter and other matter listed later in his written submission are currently being dealt with.   He said they have decided that when the Complainant pays back the sum owed to them, through their bank account, then she will get paid for her final week of work, which he said is the time she carried out the unauthorised work.  

The Respondent in response to questions acknowledged that there was no provision in the Complainant’s written contract of employment for such a deduction.

In his written statement, the Respondent goes on the make allegations of a very serious nature.    As I explained to the Respondent at the Hearing I will not be repeating these allegations or taking them into account as they are not at all relevant to the complaints before me and it is not appropriate to repeat them.   This is not the forum to ventilate such allegations and if the Respondent wishes to pursue these allegations he should do so at an appropriate forum, which he said he intends to.

The Respondent gave direct evidence in support of his position.    In his evidence, he made many criticisms of the Complainant.   He said that she travelled during her 6 week notice period and was not available for work.   He said that this was not unusual that she travelled and was unavailable for work on numerous occasions and he said that this was one of the reasons he wanted to change the payment system for her and to improve productivity.

The Respondent said the Complainant was not a Vinyl Cutting Engineer.   He said she was fully trained by him and was facilitated in every way by him, including time off work. 

The Respondent said that what occurred was a restructuring to meet his and her needs and he said that the main element of it was to pay the Complainant on the basis of work done, i.e. a piece work basis rather than on a fixed wage or salary basis and he insisted the Complainant would be better paid and working less hours under the proposed new arrangements

The Respondent submitted that he had behaved reasonably and very fairly towards the Complainant and that the complaints were not well founded and they should be rejected.

Findings, Conclusions and Decisions:
Sections 41 and 80 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaints in accordance with the relevant redress provisions under Schedule 6 of that Act.

Section 39 of the Redundancy Payments Acts 1967, requires that I make a decision in relation to the complaint in accordance with the relevant redress provisions under that Act.

Section 6 of the Payment of Wages Act 1991 requires that I make a decision in relation to the relevant redress provisions of the same section of the 1991 Act.

I have carefully considered the evidence and submissions of both parties and I have concluded as follows.

I find some of the evidence of the Respondent to be incoherent, contradictory and confusing, to refer to but some of that I note the following.

The Respondent says that he formally in writing gave the Complainant 6 weeks’ notice of the termination of her (contract of) employment on 24th November 2017.   He says that on the following day he held a formal meeting with her to offer her a new contract of employment with better pay, conditions and less working hours.   Both of these statements taken together do not make sense.    If the Respondent wished to offer the Complainant better pay, conditions and less working hours there was no need to terminate her employment and then offer her re-employment under these superior conditions, all that is required is to continue the existing employment contract and improve her pay and working conditions and confirm those improvements in her employment contract in writing of the changes in accordance with the provisions of Section 5 of the Terms of Employment (Information) Act 1994.    There is absolutely no need to terminate an employee’s employment contract in such circumstances, it is unheard of and without precedent for an employer to do so.   If the Complainant was in any way confused about this, it is hardly surprising as the normal reason for terminating an employee’s employment is either redundancy or dismissal.

The Respondent made serious complaints about the Complainant at the Hearing, including stating that she took time off whenever she wished to travel outside the Country, yet to quote the Respondent he gave her “a glowing reference”  -  this is contradictory.

The following are my findings and decisions in relation to the specific complaints under the two Acts:

Redundancy Payments Act 1967:  CA-0001781-001:                                                                                      .  I have carefully considered the evidence and the submissions made and I have concluded as follows in relation to the complaint under the 1967 Act:

Section 7 of the Redundancy Payments Act 1967, as amended by Section 4 of the Redundancy Payments Act 1971 and Section 5 of the Redundancy Payment Act 2003 defines redundancy as follows:

“……an employee who is dismissed shall be taken to be dismissed by reason of redundancy if for one of the reasons not related to the employee concerned the dismissal is attributable wholly or mainly to:

the fact that his employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed by him or has ceased or intends to cease, to carry on that business in the place where the employee was so employed,   or

 
the fact that the requirements of that business for employees to carry out work of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease or diminish,   or

 
the fact that his employer has decided to carry on the business with fewer or no employees, whether by requiring the work for which the employee had been employed (or had been doing before his dismissal) to be done by other employees or otherwise,   or

 
the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done in a different manner for which the employee is not sufficiently qualified or trained,  or

 
the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained.”   
What happened in the instant case is that, as confirmed by both parties, the Respondent served the Complainant with 6 week’s notice of the termination of her employment with the Respondent on 5th January 2018.   That notice was never withdrawn by the Respondent and the termination of her employment with the Respondent occurred on that date (5th January 2018).

The following facts were established at the hearing:

The business in which the Complainant was working at the time of her dismissal did not cease.   Nor did it cease in the place where she was so employed.

 
There was no reduction of employees carrying out work of the kind performed by the Complainant.   Indeed on the contrary the Respondent employed two new employees to perform the work previously done by the Complainant  -  this means that the Complainant’s job did not cease to exist and she was directly replaced in it.   This fact alone would mean that the Complainant’s job was not terminated by reason of redundancy (whatever other reason it was terminated for).

 
The Respondent did not carry on the business with fewer or no employees, indeed as stated above two new employees were recruited.

The work done by the Complaint was not done by in a different manner for which the Complainant was not qualified or trained

The work done by the Complainant was not done by a person who is capable of doing other work for which the Complainant was not qualified or trained.
Based on the foregoing the Complainant’s employment was not terminated by reason of redundancy   accordingly I must find, decide and declare that the complaint under Section 39 of the Redundancy Payments Act 1967 is not well founded; it is rejected and is not upheld by me.

Payment of Wages Act 1991:   CA-00017581-002:                                                                                           . I have carefully considered the evidence and the submissions of the parties in relation to the complaint under the 1991 Act and I have concluded as follows.

Again there is no dispute as to what happened in relation to this complaint.  The Respondent confirmed that the Complainant was due unpaid wages of €426.18c in relation to work performed by her in January 2018 and they said they were not paying it to her as they alleged (and she denied) that she owed them more than that figure for unauthorised work she did during working hours, using Company equipment and Company procedures.

Section 5 of the Payment of Wages Act 1991 which deals with deductions from wages provides as follows: 

“An employer shall not make a deduction from the wages of an employee (or receive any payment from an employee) unless—

the deduction (or payment) is required or authorised to be made by virtue of any statue or instrument made under statue,

 
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

 
in the case of a  deduction, the employee has given his prior consent in writing to it”
In that respect the following facts were established at the Hearing and are not in dispute.

The deduction was not required or authorised by virtue of any statute or instrument made under statue.

 
The deduction was not required or authorised by virtue of any term of the Complainant’s written contract of employment.

 
The Complainant had not given her prior consent in writing to the deduction.

Based on the foregoing I must find, declare and decide that the complaint under Section 6 of the Payment of Wages Act 1991 is well founded and it is upheld by me.  

The amount due to the Complainant is €426.18c and I require the Respondent to pay her that amount within 6 weeks of the date of this decision.

Dated:           18 May 2018

Workplace Relations Commission Adjudication Officer:  Seán Reilly

Key Words:  Redundancy payments and non payment of wages due