Complainant

Respondent

Anonymised Parties

A Skin and Laser Therapist

A Beauty Clinic

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-00025177-001

21/01/2019

The complainant worked for the respondent as a skin and laser therapist from February 2014 until she resigned in December 2017 to move to a new job. Her complaint is that, following her departure, her former employer withheld her final wages and holiday pay to cover the cost of training and treatments she received in the six months before the termination of her employment.

Clause 2 of the complainant’s contract of employment has a paragraph titled, “Training” and it provides that,

“If an employee leaves the company within 6 months of any course / training funded, the Employee will need to reimburse the Company the cost of the course / training and any expenses incurred by the company.   If this amount is up to €500 then this will be repayable to (name of the respondent) if the Employee leaves within a year. If the training / funding is more than €500 then repayment will be agreed on an individual basis at the time when the training funding is granted.

“If the Employee leaves the employment within 6 months of receiving any free treatment / product/training or products purchased at cost then this has to be repaid to (name of the respondent).”

At the hearing, the respondent said that, when she left her employment, €1,707 was owed by the complainant for training and treatments. The respondent’s case is that, based on the contractual provision set out above, they were entitled to deduct this amount from the employee’s final wages.

At the hearing, the complainant said that she received a payslip in December 2018, separately from her normal payslip. She had a copy of this at the hearing and it shows that she was entitled to pay in lieu of 12 hours of holidays and that she was also due a small sum back in tax. This payslip, dated December 28th 2018, shows that the net amount due is €289.81. The payslip states that the amount is payable by electronic funds transfer (EFT), but no payment was transferred.

A second payslip presented by the complainant is for her last week of employment and it shows that she was due to be paid €639.94. The payslip shows that this amount was to be paid by cheque, but she didn’t receive a cheque or payment of this amount by any method.

The complainant handed in her notice on December 27th 2018. In the previous six months, she had been sent on training courses and she had purchased products and treatments from her employer. The combined value of the training and the products and treatments was €2,527, reduced to €1,707 because of an agreement to cap the amount to be repaid for a specific training course.

On Thursday January 10th 2019, which was to be her second-last day at work, the complainant said she reached an agreement with the respondent that they would not require her to repay the amount owed. This agreement was drawn up in a document signed by the complainant and her manager that states as follows:

“As stated in your contract, any training paid for by (name of the respondent), any FOC treatments or products are repayable in full to (name of the respondent) if you leave within 6 months of receiving them.   As a gesture of goodwill, we will waiver (sic) the above if you agree to be contacted up to 6 months (sic) if we have any queries / questions or require your expertise.”

The complainant was off work the following day, Friday, January 11th and she posted content about herself and the respondent’s clinic on her Instagram account. She said she posted a photo of herself with the gifts that she received from her work colleagues, and that, in the message accompanying the photo, she thanked everyone for the gifts and wished them well.   The respondent asked her to take down the post immediately, which she did. She then blocked the respondent from her Instagram account. Later that day, the complainant sent a text message to a manager to say that she wouldn’t be in on Sunday, January 13th, which was meant to be her last day at work. In a text message to her own manager she said, “…unfortunately, I won’t be able to come in on Sunday…my mam’s sister passed away and I don’t feel up to coming back now…Thank you for everything.”

It is the complainant’s case that she reached an agreement with the respondent not to pay back the cost of training and treatments and that her final wages should not have been withheld. She said that, as she agreed in writing on January 10th 2019, she remains available to the respondent by telephone, text message and e mail, if they have queries or if her expertise is required. She said that her absence from work on Sunday, January 13th was only the third time that she was absent in more than four and a half years that she worked for the respondent. Having heard the news of her aunt’s death, she said that she wanted to support her mother and to spend Sunday with her family.

At the hearing, it was evident that the reasons that the complainant’s wages were withheld was because she blocked the respondent from having access to her Instagram account and because she was absent on Sunday, January 13th, which was to be her last day at work. She said that there was no reason for the company to have access to her Instagram account, and, if they wanted to ensure that she had removed the picture she posted up on January 10th, they could have checked with any number of employees in the clinic, who still had access to her account.

With regard to her absence on Sunday, January 13th, she said that she gave two days’ notice of her intention to be absent and that it was not her responsibility if the company could not provide cover.

It is the complainant’s case that she reached an agreement with her former employer about money owed to them for training and treatments and, that she kept her part of the bargain.   She said that she is still available to them if they need to contact her. She claims that the non-payment of her final wages is a breach of section 5 of the Payment of Wages Act 1991.

The respondent’s case is that there is a provision in the complainant’s contract of employment which provides that wages can be withheld where money is owed for training, products or treatments in the six months before the date of termination.   The respondent and the complainant reached a signed agreement that the respondent would waive the amount owed by the complainant on condition that she was contactable for up to six months after she left. The respondent’s evidence is that on the day this agreement was signed, the complainant posted a video of herself on Instagram giving treatments to the respondent’s clients and “promoting herself as a Therapist.” When she was asked to remove the post, she blocked the respondent from the site.   As a result, the respondent said that they could not establish, “without great difficulty” that the video had been removed from the site.

For the respondent, Ms Seery Kearney said that the complainant’s aunt died in England, and her funeral was not imminent and that there was no reason why the complainant could not have come to work on Sunday, January 13th. She said that the complainant’s absence left the respondent having to cancel appointments, because they couldn’t get cover at short notice.

At the hearing, Ms Seery Kearney referred to section 5(1) of the Payment of Wages Act which provides that an employer may not deduct from the wages of an employee unless the deduction is authorised by statute, or, unless the deduction is made in accordance with a term of the employee’s contract of employment. Ms Seery Kearney argued that the complainant gave her written consent to the deduction in her contract of employment and that she confirmed the amount owed in the waiver document signed on January 10th 2019.

The respondent’s position is that the complainant “materially breached the terms of the waiver in the form of an immature reaction to the request to remove the company’s intellectual property and her refusal to come to work on the grounds of a bereavement when the relation is question (sic) was resident in the UK and no funeral arrangements were ongoing at the time of her decision not to attend for work.”

On Monday, January 14th, a manager of the respondent’s clinic wrote to the complainant and, having criticised her decision to block them on Instagram and for not attending work on Sunday, January 13th, she explained the reason for the non-payment of wages:

“Your actions are in direct conflict with the spirit and guarantees of our waiver and as a consequence, we are invoking our right to reclaim the moneys owed to us. We require a schedule of repayment from you by return mail, not later than close of business on Thursday, January 17th. We will permit payment of all monies owed to us in scheduled payments not to exceed a three month period. Failure to provide a schedule of repayment, and to make good on your payments will result in legal action for the recover (sic) of sums due and owing.”

Ms Seery Kearney submitted that the respondent was entitled to withdraw the waiver and seek payment of the monies owed.

The Facts

At the hearing, there was no dispute about the fact that the final wages due to the complainant in respect of pay, holiday pay and public holiday pay, a gross amount of €825, was not paid because, as submitted by the respondent, the complainant owed €1,707 to cover the cost of training and treatments she received in the six months before she left her job. On January 10th 2018, the respondents agreed to waive this payment, but changed their minds when the complainant blocked them from her Instagram account and when she didn’t attend work on her last day, Sunday, January 13th 2019.

There was some disagreement between the parties about the nature of the Instagram posting. The complainant said that she posted a picture of herself and the respondent said that she posted a video of her treating their clients. However, this is not relevant to a finding on this matter, as, from the tone of the text messages submitted in evidence by the complainant, the respondent appears to have been still on reasonable terms with the complainant even after she posted the picture without permission. Relations seem to have chilled only when she blocked them from her Instagram account.

The complainant said that some of the treatments listed in the waiver agreement were provided in July 2018, and were therefore outside the six-month time limit referred to in the agreement, but, due to the discounts offered, this does not alter the sum allegedly owed.

Aside from any consideration of the status of the waiver agreement signed on January 10th 2019, it is important to consider the legal framework governing this matter.

The Relevant Law

Section 5 of the Payment of Wages Act 1991 (“the Act”) provides for the regulation of the deduction of wages from employees and it is worthwhile referencing here:

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

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

(b) 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

(c) in the case of a deduction, the employee has given his prior consent in writing to it.

A copy of the complainant’s contract of employment was submitted in evidence and, as set out in the “Background” section above, it provides that the cost of training, treatments and products may be deducted from an employee’s wages if she leaves within six months of receiving the training or the treatments or products.   The complainant signed the most recent version of her contract on August 13th 2018 and she was aware that this provision was a condition of her employment.

Sub-section (2) of section 5 of the Act sets out the conditions according to which an employer may make a deduction from an employee’s wages:

(2) An employer shall not make a deduction from the wages of an employee in respect of—

(a) any act or omission of the employee, or

(b) any goods or services supplied to or provided for the employee by the employer the supply or provision of which is necessary to the employment,

unless—

(i) the deduction is required or authorised to be made by virtue of a term (whether express or implied and, if express, whether oral or in writing) of the contract of employment made between the employer and the employee, and

(ii) the deduction is of an amount that is fair and reasonable having regard to all the circumstances (including the amount of the wages of the employee), and

(iii) before the time of the act or omission or the provision of the goods or services, the employee has been furnished with—

(I) in case the term referred to in subparagraph (i) is in writing, a copy thereof,

(II) in any other case, notice in writing of the existence and effect of the term,

and

(iv) in case the deduction is in respect of an act or omission of the employee, the employee has been furnished, at least one week before the making of the deduction, with particulars in writing of the act or omission and the amount of the deduction, and

The remaining sub-sections, (v), (vi) and (vii) are not relevant to this complaint.

The Employment Appeals Tribunal (EAT) case of Ryanair Limited v Alan Downey, [2006] 17, ELR 347, established that training undertaken by an employee in the course of employment enhances their qualifications and remuneration and, on this basis, may be considered as the provision by an employer to an employee of a “service” within the meaning of sub-section 2(b) above. I find therefore that the respondent’s policy of deducting the cost of training from an employee’s wages is permitted by the Act.

This permission is qualified by sub-section (2)(b)(ii), which requires that “the deduction is of an amount that is fair and reasonable having regard to all the circumstances (including the amount of the wages of the employee).” In the instant case, the complainant was an employee on an hourly rate of €15.00.   The deduction meant that, €645, consisting of all her wages for the final week of her employment, plus €180 for 12 hours’ holidays not used up in 2018 and a tax refund of €93 was not paid.

The complainant was due to receive her final week’s pay on January 17th 2019. One week previously, she signed a document in which she agreed that the amount that she owed, €1,707, would not be deducted, subject to her availability to the respondent for six months. This is not the same as the “particulars in writing” referred to at sub-section (2)(b)(iv) above, which requires that the employee receive details of the amount that will be deducted. In the case of this employee, she received details of the amount that would NOT be deducted. The document issued to the complainant that she signed on January 10th 2019 does not comply with the requirement of the legislation at sub-section 2(b)(iv) of the Act.

In the case of Ryanair v Downey, referred to earlier, finding that the deduction of wages was a breach of the Act, the chairman noted that the deduction “had the effect of paying the respondent no wages in respect of his final period of service and the appellant failed to give the respondent any notice in writing of the deduction.”

On foot of the document the complainant signed on January 10th 2019, she expected to receive her wages. She was never notified that her wages would not be paid and the first indication she got that she wouldn’t be paid was on January 16th when she noticed that her payslip indicated that she would be paid by cheque instead of EFT.

The deduction of wages from this complainant in January 2017 meant that she got no pay for her final week at work and she was left short of pay for holidays not taken. A refund in tax of €93 was also withheld.   I find that this deduction was entirely unfair in circumstances where she agreed with the respondent that she would be contactable by them for six months if they needed to speak with her about any matter related to treatments of their clients when she was an employee. She did not break her part of the agreement. The respondent’s reaction to the complainant blocking them from her Instagram account and her absence on her last day was to not pay her wages, despite their written agreement not to make a deduction. It is my view that this treatment was unwarranted, unfair and a breach of section 5(2)(b)(ii) and (iv) of the Payment of Wages Act, and therefore, an illegal deduction.

I have concluded that this complaint is well founded and I decide therefore that the respondent is to pay the complaint €825 gross in respect of wages, holiday pay and public holiday pay not paid to her at the termination of her employment. When this amount is being paid to the complainant, I expect that any tax due in the form of a refund will also be paid.

Non-payment of wages