Complainant

Respondent

Anonymised Parties

A retired Post-person

A Postal Service Provider

Representatives

Communications Workers Union

Act

Complaint 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-00019538-001

01/06/2018

The Complainant commenced his employment with the Respondent on 1st January 1979. He retired on 29th December 2017.

The Complainant claims that he did not receive compensation for his accrued and untaken annual leave.

The Complainant submits that he commenced his employment with the Respondent on 1st January 1979 and retired on 29th December 2017 as a result of an early retirement scheme.

The Complainant submits that the leave year in the Respondent organisation runs from 1st May to 30th April. The Complainant claims that at the end of his employment he had unused annual leave of eight days. The Complainant argues that, as he finished his employment on 29th December 2017 he was not be in a position to take his outstanding leave. The Complainant sought payment for the unused leave but the Respondent refused to pay it. The Complainant raised his concerns with his Union who in turn raised this with the Regional HR Manager of the Respondent. The Union argued that, as the Complainant had worked more than 1,365 hours in the leave year he was entitled to 4 working weeks leave.   The HR Manager advised that the Respondent’s position was that in order to avail of this leave the individual was required to work 1,356 hours across 12 months. The Complainant submits that the Union raised it further with the Head of Employee Relations of the Respondent but he did not accept the Union’s argument and advised that the Respondent had taken advice on its interpretation of the Act and it is satisfied that it is correct.

The Union relies on Section 19(1) of the Organisation of Working Time Act, 1997 and argues that the annual leave year in the Respondent’s organisation runs from 1st May to 30th April. The Complainant’s weekly hours of employment were 37.5 hours. Therefore, in the period from 1st May 2017 to 31st December 2017 the Complainant had worked in excess of 1,365 hours and therefore had an entitlement to 4 working weeks of annual leave. In addition, the Complainant had an entitlement to 2 days service leave and three additional days leave in lieu of the extra holidays accruing in respect of Christmas, Easter and Good Friday. The Complainant argues that this gave him a total of 25 days leave. The Complainant submits that both the level of annual leave and the leave periods form a part of a collective agreement between the CWU and the Respondent.

The Union on behalf of the Complainant quotes Section 23(1) of the Act which deals with compensation on cessation of employment. It is argued that the Complainant has an entitlement to 25 days annual leave. Up to the time of the cessation of his employment the Complainant had not taken all of his leave and had eight days remaining. The Complainant claims that the Respondent did not allow him to take this leave nor did it compensate him for the loss of this leave.

The Union is requesting that that the Adjudicator finds that the Respondent should have provided the Complainant with cessation pay for the loss of his eight days of annual leave and should now pay him cessation pay in addition to compensating him for the contravention of the Act.

The Respondent submits that the matter concerns the level of entitlement to compensating for untaken annual leave upon retirement. The Complainant’s annual leave was 25 days under his contract of employment. The statutory entitlement in his case is four working weeks in a leave year in which he works at least 1,365 hours. The Respondent argues that the WRC deals with disputes regarding to a worker’s statutory allocation under the 1997 Act. This case involves contractual entitlements within the Respondent.

The Respondent submits that the Complainant’s leave year is from 1st May 2017 to 30th April 2018. In the Complainant’s case he worked 1,352 ½ hours in that period. The Respondent submits that the Complainant took 16 days annual leave in his final leave year. The Respondent argues that in circumstances of 1,352 ½ hours worked it is not feasible to apply Section 19(1) of the Act.

The Respondent submits that, as per Section 19(1)(b) an employee would be entitled to one-third of a working week for each month in the leave year in which he or she works at least 117 hours the Complainant would be entitled to 13.3 days of annual leave i.e. 0.33 of a week for months May to December 2017. The Respondent further submits that as per Section 19(1)(c) of the Act an employee is entitled to 8 per cent of the hours he or she works in a leave year (but subject to a maximum of 4 working weeks). In this scenario the Complainant would be entitled to 14.42 days of annual leave.

The Respondent submits that the local HR office calculated an overall 17 days annual leave entitlement with 16 days already taken. The Complainant was accordingly paid for the outstanding day. The Respondent submits that qualification and calculations was on the basis of any:

·         Time actually worked- including overtime

·         Certified sick leave taken

·         All public holiday leave and any time worked on public holidays

·         Annual leave itself

The calculation was determined by reference to his remaining leave period in days e.g.

·         December 2017 – 2 days

·         January 2018 – 31 days

·         February 2018 – 28 days

·         March 2018 – 31 days

·         April 2018 – 30 days

This showed a total 122 day until his remaining leave period. To calculate what portion of his overall leave remained unworked, the calculation ascertained what the overall entitlement as follows: 122 days from cessation of employment until the end of the leave year divided by the annual leave entitlement of (20/365 = .0548) is (122*.0548) = 6.68.

The Respondent argues that the Complainant has been allocated 25 days i.e. 5 days over the statutory entitlement. The Respondent has not deprived the Complainant of his statutory leave entitlement nor has it any desire to do so. The Respondent submits that this claim is not valid insofar that there has been no impact upon the employee’s statutory entitlement.

The Respondent cited Ocean Manpower Ltd v Marine, Port and General Workers’ Union DWT981 in support of its case.

The Complainant claims that he did not receive his proper annual leave entitlements under the Organisation of Working Time Act, 1997 on cessation of employment due to his retirement.

The Law

The Organisation of Working Time Act, 1997 stipulates as follows:

“19. Entitlement to annual leave

(1) Subject to the First Schedule (which contains transitional provisions in respect of the leave years 1996 to 1998), an employee shall be entitled to paid annual leave (in this Act referred to as “annual leave”) equal to—

(a) 4 working weeks in a leave year in which he or she works at least 1,365 hours (unless it is a leave year in which he or she changes employment),

(b) one-third of a working week for each month in the leave year in which he or she works at least 117 hours, or

(c) 8 per cent of the hours he or she works in a leave year (but subject to a maximum of 4 working weeks):

Provided that if more than one of the preceding paragraphs is applicable in the case concerned and the period of annual leave of the employee, determined in accordance with each of those paragraphs, is not identical, the annual leave to which the employee shall be entitled shall be equal to whichever of those periods is the greater.

20. Times and pay for annual leave

(1) The times at which annual leave is granted to an employee shall be determined by his or her employer having regard to work requirements and subject—

(a) to the employer taking into account—

(i) the need for the employee to reconcile work and any family responsibilities,

(ii) the opportunities for rest and recreation available to the employee,

(b) to the employer having consulted the employee or the trade union (if any) of which he or she is a member, not later than 1 month before the day on which the annual leave or, as the case may be, the portion thereof concerned is due to commence, and

(c) to the leave being granted—

(i) within the leave year to which it relates,

(ii) with the consent of the employee, within the period of 6 months after the end of that leave year, or

(iii) where the employee—

(I) is, due to illness, unable take all or part of his or her annual leave during that leave year or the period specified in subparagraph (ii), and

(II) has provided a certificate of a registered medical practitioner in respect of that illness to his or her employer,

within the period of 15 months after the end of that leave year.

(2) The pay in respect of an employee's annual leave shall—

(a) be paid to the employee in advance of his or her taking the leave,

(b) be at the normal weekly rate or, as the case may be, at a rate which is proportionate to the normal weekly rate, and

(c) in a case in which board or lodging or, as the case may be, both board and lodging constitute part of the employee's remuneration, include compensation, calculated at the prescribed rate, for any such board or lodging as will not be received by the employee whilst on annual leave.

(3) Nothing in this section shall prevent an employer and employee from entering into arrangements that are more favourable to the employee with regard to the times of, and the pay in respect of, his or her annual leave.

(4) In this section “normal weekly rate” means 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.

23. Compensation on cesser of employment

(1)

(a) Where—

(i) an employee ceases to be employed, and

(ii) the whole or any portion of the annual leave in respect of the relevant period remains to be granted to the employee,

the employee, shall as compensation for the loss of that annual leave, be paid by his or her employer an amount equal to the pay, calculated at the normal weekly rate or, as the case may be, at a rate proportionate to the normal weekly rate, that he or he would have received had he or she been granted that annual leave.

(b) In this subsection—

“relevant period” means—

(i) in relation to a cessation of employment of an employee to whom subparagraph (i) of paragraph (c) of subsection (1) of section 20 applies, the current leave year,

(ii) in relation to a cessation of employment of an employee to whom subparagraph (ii) of the said paragraph (c) applies, that occurs during the first 6 months of the current leave year—

(I) the current leave year, and

(II) the leave year immediately preceding the current leave year,

(iii) in relation to a cessation of employment of an employee to whom subparagraph (iii) of the said paragraph (c) applies, that occurs during the first 12 months of the period of 15 months referred to in the said subparagraph (iii)—

(I) the current leave year, and

(II) the leave year immediately preceding the current leave year, or

(iv) in relation to a cessation of employment of an employee to whom subparagraph (iii) of the said paragraph (c) applies, that occurs during the final 3 months of the period of 15 months referred to in the said subparagraph (iii)—

(I) the current leave year, and

(II) the 2 leave years immediately preceding the current leave year.

(2) Where—

(a) an employee ceases to be employed during the week ending on the day before a public holiday, and

(b) the employee has worked for his or her employer during the 4 weeks preceding that week,

the employee shall, as compensation for the loss of his or her entitlements under section 21 in respect of the said public holiday, be paid by his or her employer an amount equal to an additional day's pay calculated at the appropriate daily rate.

(3) If an employee ceases to be employed by reason of his or her death, any compensation payable under this section shall be paid to the personal representative of the employee.

(4) Where compensation is payable under subsection (2), the employee concerned shall, for the purpose of Chapter 12 of Part 2 of the Social Welfare (Consolidation) Act 2005 (which relates to unemployment benefit) and Chapter 2 of Part 3 of that Act (which relates to unemployment assistance), be regarded as not having been, on the public holiday concerned, in the employment of the employer concerned.

(5) In this section “appropriate daily rate” and “normal weekly rate” mean, respectively, the appropriate daily rate of the employee concerned's pay and 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 Union argued that the Complainant was entitled to 25 days of annual leave, encompassing 20 days of statutory leave 2 “service” days and 3 days which have been previously known as “privilege” days and are granted under inhouse agreement. In that regard I note that the Labour Court in Ocean Manpower Ltd v Marine, Port and General Workers’ Union DWT981 held:

“Section 27 of the Act provides that an employee or any trade union of which the employee is a member may present a complaint to a Rights Commissioner that the Employer contravened a“relevant provision"of the Act.A "relevant provision" includes the provisions of Sections 21 and 22 and the Regulations. Having regard to the statutory provisions the only question to be determined by the Court is whether it would be in contravention of a relevant provision of the Act for the Company to calculate a day's pay in respect of a public holiday by reference to the Regulations only, rather than by reference to the collective agreement between the parties which, it is claimed, provides for more favourable terms.The Union relies on Article 7 of the Regulations in claiming that the Rights Commissioner should have taken the terms of this agreement into account in reaching his decision. This Article provides as follows:-"7. Nothing in these Regulations shall prevent an employer andemployee from entering into arrangements that are morefavourable to the employee with regard to the pay in respect ofa public holiday."This Article merely re-states the established principle of employment law that where an entitlement is created by statute, it is to be regarded as a minimum entitlement which can be improved upon by agreement. This does not mean, however, that any enhanced terms so provided are recoverable by the enforcement procedures established by the Act. An agreement may provide a valid and subsisting entitlement, in industrial relations terms, over and above that created by the Act. But the Act does not allow the Rights Commissioner, or the Court on appeal, to substitute the terms of an agreement for those of the Regulations in deciding if a relevant provision of the Act has been contravened.”

I note that the above dealt with Section 21 (Entitlement in respect of public holidays) and Section 22 (Public holidays: supplemental provisions) of the Act. However, the same principle applies to Section 19 (Entitlement to annual leave).

The “leave year” is defined by Section 2 of the Act as “a year beginning on any 1st day of April”.

I note that the Respondent argued that the leave year in the Respondent organisation starts on 1st May and ends on 31st April. Notwithstanding any practical administrative arrangements, the Labour Court has determined in Waterford City Council v O’Donoghue DWT0963 as follows:

“The only leave year which is cognisable for the purpose of determining if an employee received his or her statutory entitlement is that prescribed by the Act itself. That is to say a year starting on 1st April and ending on 31st March the following year. While different arrangements may be put in place for administrative purposes, in determining if a contravention of the Act occurred that Court can only have regard to the lease allocated to an employee in the statutory period.”

The Court outlined that “The purpose of the Act is to provide employees with an entitlement to 20 days annual leave per year. Section 20 of the Act provides, inter alia, that the leave must be granted within the leave year as defined by s.2 or within six months thereafter where the employee consents to its deferral. Section 19(1) provides that the full statutory entitlement accrues to an employee in respect of a leave year in which he or she works at least 1,365 hours. But the entitlement still relates to each year of employment and not to a shorter period. Thus, the effect of s.19(1)(a) is that if an employee is employed for a full year but is absent from work during the year, his or her full entitlement still accrues if they worked the requisite hours during the year. “

And further that “…the Claimant can only succeed in the present claim if it is shown that in the period 1st April 2007 to 31st March 2008 he was allocated less that 20 days annual leave.”

Moreover, the Court held that “…it should be noted that this definition refers to a “year”. As a matter of plain language that means a period of 12 months. The period from 1st April to 31st December is a period of nine months and is not capable of being regarded as a year for the purposes of the Act or otherwise.”

Having carefully considered all of the submissions, oral and written, made to me in the course of the investigation as well as the evidence presented at the hearing, I find that the entitlement to 20 days relates to annual leave year i.e. 12 months. The period from 1st April 2017 to 29th December 2017 when the Complainant retired does not constitute a year for the purposes of the Act. Moreover, Section 19(1)(a) provides that an employee is entitled to ”4 working weeks in a leave year in which he or she works at least 1,365 hours (unless it is a leave year in which he or she changes employment), emphasis added. There was no dispute that the Complainant did leave his employment due to his retirement during the leave year.

Therefore, the Complainant’s annual leave entitlement was correctly calculated on pro rata basis. The Complainant had taken 16 days of annual leave and was paid for 1 day on cessation of employment.

I am satisfied that that no contravention of the Act occurred.

Having considered the evidence available to me I declare this complaint not well founded.

Retirement - annual leave- organisation of working time act