Complainant

Respondent

Anonymised Parties

An employee

An employer

Representatives

Ian McDonnell, Forsa

Aisling McDevitt, Ibec.

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-00017204-001

01/02/2018

The Complainant has been employed by the Respondent since 12/05/2003. She is employed as a Physio Aide. It is the Respondent’s position that the Complainant was erroneously paid in excess of the rate attributable to this position which is her substantive role. She was, placed on the Social Care Worker rate of pay.

The Respondent maintains that to continue to pay the Complainant in excess of the correct rate of pay would be an improper use of public funds.

The Complaint was received by the Workplace Relations Commission on 01/02/2018.

BACKGROUND TO THE EMPLOYMENT RELATIONSHIP

1.       The Respondent organisation provide a range of supports and services to service users who have intellectual and other disabilities. The organisation is defined under section 39 of the 2004 Health Act and due to this categorisation the Respondent organisation is an independent organisation outside the scope of public sector agreements.

2.       The complainant commenced employment with the Respondent during June 2003 as a trainee house parent – physio aide on a permanent part time basis.

3.       The complainant trained as a physio assistant via the Respondent’s physio department and qualified in 2007.

4.       In 2015, the complainant agreed to assist the organisation by taking on a role as a relief assistant social care worker.   This role operates on an as and when basis, a contract was issued.

5.       The complainant’s substantive role remains that of physiotherapy assistant. She covers operational gaps in her capacity as an assistant social care worker on an as and when basis. Unfortunately, since the Respondent’s ruthlessly and negatively altered her substantive physiotherapy assistant contract of employment, the complainant has had to supplement her income by increasing her level of relief work.

ISSUES IN DISPUTE

1.       At the time of referral there were two core issues in dispute. Firstly, management at the Respondent’s Organisation intention to unilaterally change the terms and conditions of the substantive contract of employment the complainant has worked under since 2003. Secondly, management are refusing to reintroduce incremental progression for the complainant along her contractual pay scale. Reintroduction of incremental progression occurred from 2017 for staff at the Respondent organisation.

2.       The above items were referred into the adjudication service at the end of January earlier this year. The Respondent organisation cut the complainant’s hourly pay rate since this referral. We would appreciate the adjudicator’s view on this action by the employer.

3.       We seek that this adjudication hearing confirms all the terms and conditions set out in the complainant’s substantive contract of employment from 2003 and that she should be included in the reintroduction of incremental progression along her contractual pay scale from 2017 in line with other staff at the Respondent organisation.

BACKGROUND TO ISSUES IN DISPUTE

1.       Management raised the issue of alleged overpayments to members at a scheduled union / management meeting in 2016. They had contacted a number of these members alleging they owed sums ranging from €30,000 to over €200,000 in some instances.   However, the complainant was not identified as potentially being one of these members until mid-2017.   Management basis for these alleged overpayments was that the complainant’s salary was out of sync with the funding organisation’s consolidated pay scales. The union’s position is that she has an established contract of employment since 2003.

2.       Management informed the Complainant directly during the last quarter of 2017 that they were alleging she had been overpaid by the organisation and she owed them €36,465. They told her they intended to pursue these monies as well as unilaterally changing the terms and conditions set out in her contract of employment.

3.       The Union wrote as early as 21st April 2016 stating our position on members terms and conditions of employment.   Upon consultation with those initially identified as allegedly receiving overpayments the Union agreed to engage on the issue once management agreed to withdraw their intention to pursue the alleged amounts owed by the affected members.

4.       We engaged in good faith toward an agreement on the overpayment issue but an overall agreement was not negotiated or established. The union regularly explained to management that while we would give serious consideration to agreeing to the funding organisation’s consolidated pay scales for new starters’ person to post holder would have to apply for existing staff as appropriate. The union’s final position is stated in an email sent to management dated 16th May 2017.

5.       It is important to remember that the Respondent Organisation were eager for the Complainant to commit to her role as physiotherapy assistant within the organisation back in 2003. She agreed to this on the basis of the contract offered to her, inclusive of all terms and conditions. This is a cornerstone to the agreement reached with her.   This is why the terms of her 2003 contract continued until management’s recent unilateral changes to same.

6.       Agreement was reached between the union and management that incremental progression would return from 2017 for those staff due same. Incremental progression had been frozen since 2009/10. The Complainant is unfairly excluded from this. We believe this exclusion is being utilised to put her under unwarranted pressure inclusive of the alleged overpayments sum.

UNION’S CASE:

1.       The Respondent Organisation is an independent organisation with its own board of directors, management and staff. As the Respondent Organisation is covered by Section 39 of the Health Act 2004 staff are not obliged to work under the funding organisation’s consolidated pay scales that the Respondent Organisation wises to impose upon the Complainant. This is not a one-sided arrangement as due to the Respondent Organisation’s Section 39 status members cannot and do not enjoy a defined benefit pension scheme as per those working within the public sector.

2.       The Respondent Organisation as an independent entity freely entered into a contract of employment arrangement with the Complainant in 2003.

3.       The terms and conditions within this contract of employment are explicit and clear and cannot be altered without the prior agreement of either side.

4.       If we consider case law around the contract of employment, the mechanism to establish the terms of agreement is to examine the express terms of the contract of employment (Moorcock case (1889 14 PD 64). A term is to ‘express’ if it is recorded in a written contract or openly expressed at a time the contract is made (Chitty on Contracts, 29th ed., Sweet & Maxwell London 2004, Vol 1 para 13-001).

5.       This means the dispute can be resolved only after a thorough examination of written documentation forming the express terms of the contract.

6.       Having given due consideration to 4 and 5 above the Complainant’s contract of employment is explicit covering her employment relationship with the Respondent’s Organisation. Therefore, it is binding unless both sides agree to it being amended. The Complainant has not agreed to the changes the Respondent Organisation wishes to introduce therefore the contract cannot be altered.

7.       While Management may change at an organisation they must continue to honour the contracts and agreements their predecessors entered into with their staff.

8.       Given that the Complainant has been remunerated in line with her contract of employment, no overpayments occurred to her.

9.       The effect of management’s unilateral alteration of her contract of employment upon the complainant is shown starkly via recent payslips.

10.   It also follows that the Complainant is entitled to the re-introduction of incremental progression as per other staff at the Respondent Organisation. As explained earlier this recommenced in from 2017. The cost of her not having incremental progression since 2010 is €13,861.00 while her exclusion from incremental progression return as per other staff now totals €800 and is increasing by the week.

SUMMARY

1.       The Complainant has been placed under unwarranted pressure to agree to alter her contract of employment by management via the threat of the organisation pursuing her for very significant sums of money she allegedly owes them.

2.       During all this time she has endeavoured to carry out her role professionally and diligently. She has honoured her contract of employment and management must do the same.

3.       Her exclusion from incremental progression is unfair and without validation.

4.       It is important to consider the detrimental effect of all of this unfortunate and unnecessary episode has had upon the Complainants health and wellbeing.

CONCLUSION

We ask with respect that having considered the contents of this submission and evidence provided at the hearing today that the Adjudicator recommends in favour of our member that:

1.       The Respondent Organisation honours the contract of employment it freely entered into with the Complainant during June 2003 in its totality.

2.       The Respondent Organisation allows the Complainant to recommence incremental progression on her contractual pay scale as received by her fellow staff members due same, from 2017.

1.       The claim before you is a claim made by the Claimant, under the Industrial Relations Acts. The Claimant alleges that the alterations of her terms and conditions is a unilateral act on behalf of the company. The company’s position is that the claimant has erroneously been paid in excess of the rate attributable to her substantive role of Physio Aider. She was, incorrectly, placed on the Social Care Worker rate of pay. The Social Care Worker rate of pay is incompatible with the work of a Physiotherapy Aide within the company and the correct grade is that of Physiotherapy Assistant. To continue to pay the claimant in excess of the correct rate of pay would be an improper use of public funds.

BACKGROUND TO THE CLAIMANT

2.       The claimant has been employed with the Respondent since 2003. She works part time (25 hours per week term time/183 days per year). The claimant’s role within the company is funded by a state institution.

BACKGROUND TO THE COMPANY

3.       The Respondent Organisation provides respite and residential care to over 200 children with an intellectual disability and autism.

BACKGROUND TO THE ISSUE

4.1 During the Autumn of 2014, it became obvious that the Respondent’s Organisation was in dire financial difficulties due to core grant monies being expended on unfunded activities. Costs overruns ran to over € 2 m. In October 2014 an interim senior management team was installed to stabilise and sustain the Respondent’s Organisation. A full root and branch analysis was conducted on all activities, overheads, salaries etc.

4.2 In July 2015, the Respondent’s Organisation commenced a realignment process in order to ensure that the salaries of their staff were in line with those of their funder, as per the funding organisation’s consolidated pay scales.

4.3 As part of this process the company became aware of a number of anomalies which included both overpayments and underpayments of salaries with some individuals on the wrong salary scales.

4.4 The claimant along with 20 other individuals was one such anomaly.   The Respondent’s Organisation engaged fully with all affected. Affected staff were offered a range of options and with the support of WRC, agreement was reached with all but 3 remaining staff, including the claimant.

EMPLOYERS ARGUMENTS

1.       The claimant’s incorrect grading as a Social Care Worker is an anomaly not permitted by the funding organisation’s pay policy. Her contracted states she is employed as a Physio Aide.

2.       The claimant has been overpaid a significant amount of money and it is worth noting that breakdown of same only covers the previous 10 years and does not include overpayments made in respect of pension contributions. As it stands, this overpayment amounts to € 36,465. Section 5 of the Payment of Wages Act 1991 affords an employer a legal right to recover any overpayment of wages, allowances or expenses from the wage of employees.

3.       I refer the adjudicator to the funding organisation’s guidelines, the FEMPI legislation which were issued to the employer, which details specifically with the overpayment of wages.

I wish to draw the Adjudicator’s attention to a number of sections within this document namely Section 4.1.1, 4.1.4, states:

“4.1.1.   XXXXXX (name redacted) has responsibility for the stewardship and proper management of public funds granted to it for the provision of health and personal social services. Although every effort is made to avoid such an occurrence, in the event that the employee receives an overpayment of salary, it is the policy to recover the outstanding overpayments as expeditiously as possible”.

4.1.4. The XXXXXX (name redacted) shall make a deduction from the wages of an employee in respect of a payroll overpayment where the purpose of the deduction or payment is the reimbursement of the employee in respect of - * any overpayment of wages; * any overpayment in respect of expenses incurred by the employee in carrying out his employment, made (for any reason) by the employer to the employee.

4.       Furthermore, in terms of the repayment of the overpaid monies, sections 4.6.3 to 4.6.6       state                              

4.6.3.       For amounts overpaid in excess of € 200 (gross) written communication shall issue to the recipient of the overpayment * setting out the details of the overpayment * repayment options available to the employee * request to contact Returning Officer / Line Manager within 14 working days to discuss repayment options. Name of relevant contact (Returning Officer / Line Manager) and full contact details.

4.6.4.       Where no response is received from the employee within the period specified in the overpayments letter, a second letter setting out the funding organisations intention to commence recoupment is issued.   If no response is received to this second letter within 14 working days (28 working days in total) notification in writing shall issue to the employee that the recoupment will commence with effect from the next payroll run in accordance with the procedure set out in this Financial Regulation.

4.6.5.       In cases where the overpayment exceeds either €200 or 15% of net salary the following rules apply: * the number of pay periods allowed for recoupment of overpayment shall never exceed the same number of pay periods in which the overpayment occurred. * In cases where an employee indicates that this repayment schedule is too onerous the funding organisation, on a case by case basis, will work with the employee to determine the most appropriate method and timescale for repayment. * the employee must be informed that if any errors become due as a result of an increase during the repayment period the arrears will be offset against the overpaid balance i.e. no arrears are paid when all or part of any overpayment is outstanding.

4.6.6.       Repayment options for current employees / pensioners are: * repayment of a single lump sum * part payment by a single lump sum and remainder by deduction from salary over an agreed period * salary deduction (gross amount prior to calculation of statutory deductions) * offset against arrears due (gross amount prior to calculation of statutory deductions) * deduction for entitlements under the Superannuation Acts (net amount).

With reference to the above points, the employer has discussed this issue with the claimant and other affected individuals, and issued to the claimant, correspondence and breakdown of overpayment of wages. The claimant has not agreed to repay any of the monies due. Under direct instruction from the funding organisation the Association must recover overpaid monies and adjust pay anomalies accordantly. Despite being obliged to do so in line with the above guidance, the employer did not commence any deductions from payroll until 1 April 2018 having tried instead to resolve this matter between parties at local level before instigating this guidance from the funding organisation.   The employer has sent correspondence to the claimant indicating the Association’s intention to place her on the correct salary scale (at the top point of the new 2018 pay scales) and at the correct rate of pay.

5.       I refer the Adjudicator also to Section 5(c) of the Payment of Wages Act 1991 which further allows for the provision of deductions from the wages of an employee. It states:

“Nothing in this section applies to ( c) a deduction made by an employer from the wages of an employee in pursuance of a requirement imposed on the employer by virtue of any statutory provision to deduct and pay to a public authority, being a Minister of the Government, the Revenue Commissioners or a local authority for the purposes of the Local Government Act, 1941, amounts determined by that authority as being due to it from the employee, if the deduction is made in accordance with the relevant determination of that authority”.

6.       I would also like to draw the Adjudicator’s attention to DPER Circular 10/17 reference number DPE189-002-2016 from Department of Public Expenditure specifically relating to the recovery of overpayment of wages and the method of doing so. This circular clearly states that all overpayments whatever the reason must be repaid to the Exchequer as soon as possible, and the process for doing so in line with funding organisation’s guidelines.

7.       The company engaged with staff and their Union Representatives to address and resolve the issues.

8.       As part of previous agreement, the company agreed to compensate staff whose pay would be re-adjusted to comply with the salary scales. This agreed compensation was an accepted level of compensation in the health sector and indeed is featured in the public services stability agreements, to which IMPACT were a party.

9.       This agreement was negotiated by the Union to which the claimant is a member, in circumstances identical to those at the core of this case ads such the company reject the assertion that her pay will be “unilaterally” changed. Discussions regarding this review and affected staff have been ongoing with IMPACT for a number of years.

10.   In addition, in relation to other colleagues who have been impacted by this review, they have either agreed a resolution or have been moved to the correct pay grade associated with their roles. To treat the claimant more favourable than her colleagues in this manner would create inequity within the organisation.

11.   The claimant is not a Social Care Worker and does not have the requisite qualifications associated with same.   As such the funding organisation will not support the funding of the claimant being graded as such.

The Association cannot allow the claimant to remain on a rate of pay which is out of sync with the funding organisations pay scales and qualification requirements and they cannot continue to pay the claimant the incorrect rate. To do so would be hugely inequitable to her colleagues to whom pay reductions have been applied and correct pay scales adjusted and could lead to further industrial relations issues among those where adjustments have applied.

12.   As a publicly funded organisation, the Association is attempting to provide efficient and effective services. To permit the claimant to remain on an incorrectly funded salary scales or rate of pay for a role that she does not perform, would retain unwarranted costs in the organisation when financial constraints are in place and a misappropriation of public funds.

The company sincerely regrets the inconvenience caused to the claimant, however they cannot continue to sustain the claimant’s role on a salary scale that is not linked with her role in the organisation. The claimant should be on the appropriate scale commensurate with her role / job title and paid the appropriate pro rata salary for her part time status as funded by the HSE. It is not viable to retain the claimant in her role at her previous salary as there will be a serious funding issue to maintain it under its current status.

13.   Notwithstanding the above arguments, we would refer the Adjudicator again to the Executive guidelines and specifically point 4.6.6 which state:

Repayment options for current employees / pensioners are:

·         Repayment of a single lump sum

·         Part payment by a single lump sum and remainder by deduction from salary over an agreed period

·         Salary deduction (gross amount prior to calculation of statutory deductions)

·         Offset against arrears due (gross amount prior to calculation of statutory deductions

·         Deduction for entitlements under the Superannuation Acts (net amount)

It is clear from the underlined element of this clause that any overpayments will be offset against arrears due to the employee and as such any monetary progress through any pay scale that the claimant may be paid should take into account the reimbursement of any overpayments.

14.   The organisation had previously put forward a very attractive proposal which it believes is a fair and reasonable offer to resolve this issue with success. This was an accepted method to remove unjustified costs from the organisation while compensating the claimant and to correct the mistake of the overpayment of publicly funded monies.

There can be no doubt that the Respondent organisation was in serious financial difficulty with cost over spends running at more than €2m. The interim management team put in place were tasked with looking at every area of cost in an attempt to stabilise and maintain the operation.

The area of staff wages and salaries was looked at to establish if all salaries were in line with the guidelines provided by the funding organisation, a state public body. What was found in this exercise was quite alarming, no fewer than 21 staff members were found to be on a scale that was not correct. The Respondent engaged with all affected staff, according to management calculations overpayments were in the range from €30,000 to €200,000.

The Respondent Organisation has been instructed by the funding organisation that all overpayments must be recovered and that all pay anomalies should be adjusted into line. Despite being obliged to do so the Respondent did not commence any deductions from payroll until 1st April 2018 having tried instead to resolve the matter between the parties at local level. The Respondent has sent correspondence to the Complainant indicating their intention to place her on the correct salary scale and at the correct rate of pay.

Extensive consultation took place between management and the Forsa trade union and with the help and assistance of the Workplace Relations Commission a formula to address the problem was agreed with all but three remaining staff including the Complainant.

This agreement was negotiated by the Union to which the claimant is a member, in circumstances identical to those at the core of this case as such the company reject the assertion that her pay will be “unilaterally” changed. Discussions regarding this review and affected staff had been ongoing with IMPACT for a number of years.

The Respondent’s representative made the following points. In my opinion these cannot be overlooked.

In relation to other colleagues who have been impacted by this review, they have either agreed a resolution or have been moved to the correct pay grade associated with their roles. To treat the claimant more favourable than her colleagues in this manner would create inequity within the organisation.

The claimant is not a Social Care Worker and does not have the requisite qualifications associated with same. As such the funding organisation will not support the funding of the claimant being graded as such.

The Respondent cannot allow the claimant to remain on a rate of pay which is out of sync with the funding organisations pay scales and qualification requirements and they cannot continue to pay the claimant the incorrect rate. To do so would be hugely inequitable to her colleagues to whom pay reductions have been applied and correct pay scales adjusted and could lead to further industrial relations issues among those where adjustments have applied.

The agreement reached in relation to the vast majority of staff does, in my opinion, constitute a Collective Agreement and for this reason the Complainant should abide by the terms, to treat her more favourably would be unfair to those who have accepted these terms.

For this reason, I must recommend in favour of the Respondent and recommend that the Complainant accepts the management proposal to address the issue.

The complaint is not well founded and therefore fails. The Complainant should accept the proposal put forward by management.

Overpayments.