ADJUDICATION OFFICER DECISION

Adjudication Reference: ADJ-00017446

Parties:

Complaint:

Dates of Adjudication Hearing: 07/02/2018 and 08/02/2019

Workplace Relations Commission Adjudication Officer: Aideen Collard

Procedure:

The Complainant referred a complaint under the Payment of Wages Act 1991 to the Workplace Relations Commission (WRC) on 10th October 2018. In accordance with Section 41 of the Workplace Relations Act 2015, following referral to me by the Director General, I inquired into this complaint. I gave the Parties an opportunity to be heard by me and to present any relevant evidence. The Complainant initially represented herself and was subsequently represented by Crowley Millar Solicitors whilst the Respondent was represented by Mason Hayes & Curran and a number of witnesses attended on its behalf. This matter was initially heard on 7th December 2018 and was adjourned to facilitate the provision of further information and for the Complainant to avail of legal representation. This complaint was reheard on the resumed hearing date of 8th February 2019 and the Complainant was afforded until 31st March 2019 to seek a resumed hearing in the event that further witnesses and/or additional evidence supporting her complaint became available. In the absence of such a request a decision was to issue. Whilst the Complainant did not seek to avail of same, further written representations were received by both Parties. The Parties’ respective positions are summarised hereunder followed by my findings & conclusions and decision.

Background:

The Complainant is a civil servant claiming arrears of monies under Section 6 of the Payment of Wages Act 1991, arising from the manner in which they were calculated following a retrospective re-grading of her position under a Collective Agreement. The Respondent contends that the arrears were properly calculated and denies that any monies remain due and owing to the Complainant.

Summary of Complainant’s Case:

The Complainant confirmed that she had been employed within the public service since 6th January 2004. She had worked for another Government Agency as a Clerical Officer and when it was subsumed by the Respondent Agency, her employment transferred over from 1st January 2014. In February 2015 and following a review, the Complainant was retrospectively re-graded to a Staff Officer effective from 1st August 2014. Subsequently, a Collective Agreement reached between the Respondent and Trade Union/s in October 2015 provided for transferring clerical and administrative staff to apply for re-grading in line with the Respondent’s grading system and expressly provided:

“1. The terms of Circular X/Y regarding starting pay on promotion will apply.

2. Staff deemed to be promoted under the terms of Circular X/Y will assume the pay, annual leave and working hours for the grade they are promoted to as specified under the Haddington Road Agreement.
3. The effective date for those promoted under this agreement is 1st January 2014.
4. Promotion is by designation of the individual who made the application for review.”

The Complainant confirmed that she had sought a re-grade to Grade V under the Collective Agreement which was declined on three occasions. Documentation subsequently obtained under the FOI Acts confirmed that she had scored sufficient points for re-grading to Grade V as at 5th August 2016. She referred the matter to Human Resources (HR) under the Respondent’s Grievance Policy. Following a further review dated 12th October 2017 communicated to the Complainant under cover of letter dated 12th February 2018, the review decision stated: “It is the decision of the Reviewer that (the Complainant’s) application be deemed successful in line with the score attained and the grade of Grade V be awarded.” By email of 13th February 2018, the Complainant stated: “…subject to receipt of confirmation that the upgrade to Grade V is backdated to January 2014, I confirm this matter can be resolved.” By email of 19th February 2018, HR confirmed that this was the position and that the necessary paperwork and updated contract were being prepared for issuing.

However, thereafter ensued a dispute between the Parties as to the calculation of the arrears payable as set out in a protracted exchange of correspondence furnished. The Respondent had contended that the Collective Agreement in question did not provide for the backdating of annual leave beyond the date that the re-grade was awarded whilst the Complainant argued that the applicable date was 1st January 2014. The Complainant sought a copy of the Collective Agreement and when this issue did not resolve, she referred a dispute under Section 13 of the Industrial Relations Act 1969 to the WRC. In further correspondence, the Complainant pointed out that the Collective Agreement provides for the arrears of annual leave from 1st January 2014 but the Respondent maintains its position that it provides otherwise. It is common-case that the dispute was withdrawn on the basis that the Complainant would receive arrears of annual leave plus payment of arrears in pay from 1st January 2014. This latter was estimated at €21,510.41 in a detailed breakdown from HR dated 3rd May 2018 and updated to €21,977.39 in a detailed breakdown sent by email from HR to the Complainant on 6th June 2018. It is also common-case that the calculations were based upon the application of Circular X/Y which provides for the entry point on the salary scale for starting pay on promotion. The Complainant was also furnished with a ‘HR 102 Change to Employee Terms and Conditions’ confirming her retrospective promotion to Grade V from 1st January 2014 and change of ‘effective date’ (date upon which any increment point increase is applied) from 1st August to 1st January annually. On 7th June 2018, the Complainant signed the ‘HR102 Change to Employee Terms and Conditions’ based upon these written representations.

The Complainant took her paid arrears of annual leave within the 2018 leave year without further issue. However, in an apologetic email of 11th July 2018, HR wrote to the Complainant confirming that it had omitted to factor in pay freezes under the Haddington Road Agreement and sought to retrospectively apply same and reduce the arrears payable accordingly. A further dispute then ensued regarding the manner in which the Haddington Road Agreement was now being retrospectively applied as played out in a further exchange of correspondence furnished. By email of 12th July 2018, the Complainant set out her objections to this approach and confirmed the basis upon which her dispute was withdrawn including agreement to accept €21,977.39 in arrears of pay. Following a meeting and further review of the Complainant’s pay history, the Employee Relations Manager identified a further error regarding an increment freeze which had apparently not been properly applied to her existing salary. The Complainant raised additional issues regarding the calculation of her pay and deductions for the purchase of ‘notional service’ and the fact that various sums had been paid to her without breakdown or description. Following a further meeting of 2nd August 2018 and further review of her entire payroll history, by email of 4th September 2018 attaching her payroll history since the date of her transfer to the Respondent, the Employee Relations Manager confirmed: “Identified is a remaining amount owed to you of €5,268.94.” owing to a payroll error and apologised for the oversight. An attached form referred to the payment period from 1st January 2014 - 19th December 2014. It is not in dispute that the Complainant was subsequently paid a sum of €5,268.94 which was described as “Pens Prev F/Yrs”. By email of 5th September 2018, the Complainant raised additional issues with the calculation of arrears. Further confusion, meetings and exchanges of correspondence between the Parties followed and in her last email of 19th September 2018, the Complainant contended that she was owed €13,304.41 and raised other issues. By letter dated 9th October 2018, the Employee Relations Manager wrote to the Complainant confirming the Respondent’s position that her arrears of pay from her re-gradings had been properly calculated and she had been paid all monies due and owing. It further stated that her ‘effective date’ was 1st August, being the date she had been retrospectively re-graded to Staff Officer. Calculations attached revised her arrears of pay arising from the re-grading to Grade V to €15,512.77 but the latter sum of €5,268.94 remained unaltered. On 10th October 2018, the Complainant referred the aforesaid complaint under the Payment of Wages Act 1991 to the WRC but did not specify the amount being sought on the complaint form or when requested by the WRC.

At the hearings of this complaint on 7th December 2018 and 8th February 2019, the Complainant argued that her re-grading should have been based upon the applicable point of entry on the Grade V salary scale (as interpreted by Circular X/Y) at the date of the re-grade decision and not on 1st January 2014 as contended by the Respondent. Therefore, she was entitled to a higher entry point than her position as at 1st January 2014. Detailed documentation setting out the applicable pay scales was furnished in this respect. The Complainant also contended that the effect of rewinding her position back to 1st January 2014 including negating and reapplying pay freezes under the Haddington Road Agreement had given rise to numerous errors in the calculation of her arrears. The Respondent had also unilaterally changed her annual increment date from 1st January to 1st August, contrary to her updated contract. She contended that she was owed a total of €30,289.44 and had received payment of €16,455.32, leaving €13,834.12 in arrears. She was unclear as to the breakdown of the monies paid to date and as to what items they related. Overall, she contended that the Respondent had delayed, frustrated and procrastinated in relation to the proper calculation and payment of her arrears of pay and sought compensation along with various directions regarding her salary going forward. The Complainant was afforded until 31st March 2019 to call additional evidence / witnesses supporting her position, otherwise a decision was to issue. When put, she rejected the Respondent’s position that her arrears had been calculated in exactly the same manner as other employees re-graded in similar circumstances and in line with the Collective Agreement.

Summary of Respondent’s Case:

The Respondent denied that there has been any breach of the Payment of Wages Act 1991 and that any monies are due to the Complainant and submitted that this complaint is not well-founded. In particular, it was contended that the Complainant had been properly retrospectively re-graded to Grade V from 1st January 2014 in accordance with the Collective Agreement and Circular X/Y.

The Employee Relations Manager gave evidence confirming that numerous reviews of the Complainant’s re-grading/s had been conducted and the Respondent is satisfied that all monies that were properly payable thereunder have been paid. He had further sought to explain the basis for the calculations in meetings and in writing which had been complicated by the Complainant’s prior retrospective re-grading to Staff Officer. He stood over the calculations attached to his last letter of 9th October 2018 to the Complainant as outlined above. He confirmed that the Complainant’s employment had been rewound back as if she had been a Grade V from 1st January 2014 and the calculation of her arrears of pay was based upon same. He further confirmed that whether the entry point on the salary scale was taken at 1st January 2014 or 1st August 2014 (the date of her retrospective re-grading to Staff Officer), the net effect was the same. He contended that she had been treated in exactly the same manner as all other employees who were re-graded in similar circumstances and examples of comparators were submitted in this respect. In response to the Complainant’s position that she should have been re-graded based upon her point of entry on the salary scale at the date of the decision to re-grade her to Grade V, it was submitted that this would give rise to inconsistences in the application of the Collective Agreement and consequent unfairness.

Post-hearing:

A further exchange of correspondence from the Parties was received by this Adjudication Officer post-hearing and each letter was copied to the other side for response. Whilst responses were received, a resumed hearing was not requested by either Party. By letter dated 22nd February 2019 attaching a number of payslips from HR, the Respondent confirmed as follows in writing: “Further to the meeting in the WRC 8th February 2018, I have attached payslips outlining the amounts/arrears paid (highlighted in Yellow) and would like to confirm the payments made to you previously refer to: 1. Amounts of arrears pertaining to the regrade payments from 20/12/2014 made in July 2018 (From SAP Payroll record) 1st Payment – 12th July 2018 (Pay Period 14) Amount €9,582.62 (A-Basic Pay) 2nd Payment – 26th July 2018 (Pay Period 15) Amount €5,933.71 (A-Basic Pay). 2. Amounts of arrears pertaining to the regrade payments from 01/01/2014 to 19/12/2014 and value of the MAF paid, calculation from NEWB payroll record-(Arrs Pens Prev F/Yrs) 20th September Pay Period 19. Amount €5,268.94. 3. Refund of an over deduction of Purchase of Notional Services was made to you on 4th October 2018 Pay period 20 Amount €1,232.84. This is not arrears relating to regrade of basic pay. I can confirm that point 2 above are arrears of pay and not of pension. The reference to Arrs Pens Prev F/Yrs on your payslip is a technical payroll code to that refers to pensionable basic pay arrears and not pension arrears. I trust this explains the payments made however if you have any further queries please do not hesitate to contact me.” A further letter of 22nd March 2019 from HR confirmed that the payment of €5,268.94 “…should read Arrs Pay and not Arrs Pen Prev/Yrs as stated.”

In response to the aforesaid and by letter dated 27th March 2019, the Complainant’s Solicitor adopted a different position to that argued at the hearing and sought a revised award as follows: “On 07/06/2018 (the Complainant) signed a HR102 Contract Change to Employee Terms and Conditions of Employment provided to her and agreed with HR Department and (Respondent). This Contract states that (the Complainant’s) annual increment date following her upgrade is from 01/01/2014 and every year thereafter on that date until reaching maximum of salary scale. (The Complainant) was also advised by the HR Department as part of that agreement that up to the end of May 2018 she was due back monies totalling €21,977.39. She was subsequently advised that she was also entitled to a further €5,268.94 which had become mislaid due to a clerical error. Contractually (the Complainant) was therefore due back monies totalling €27,246.33. (The Complainant) has been paid €20,785.27 in back money to date. That leaves a balance outstanding of €6,461.06 to (the Complainant). It further contended that the Respondent had unilaterally (1) changed the Complainant’s increment date, (2) withheld €6,461.06 owing to the Complainant and (3) negated and reapplied measures which applied to the Complainant under the Haddington Road Agreement. It called upon the Respondent to honour the agreements entered into with the Complainant and sought the following remedies: “1. Provide (the Complainant) with simplified letter stating Arrears of Pension should be Arrears of Basic Pay. 2. Reinstate (the Complainant’s) Annual Increment date to 1st January every year until maximum of salary scale reached. 3. Pay (the Complainant) €6,461.05 balance of Arrears of Basic Pay owing, following re-grades. 4. Permit (the Complainant) to forfeit 3 days Annual Leave to comply with 2 increment deferral measure pursuant to the Haddington Road Agreement.” As the Complainant’s position in this letter appeared to depart from the case made at the hearing, being a claim for €13,834.12 based upon the Complainant’s applicable point of entry on the salary scale, further clarity was sought from the Complainant’s Solicitor. By letter dated 25th September 2019, the Complainant’s Solicitor affirmed the post-hearing position stating: “To keep it as simple our client is willing to accept the following:- 1. Outstanding balance of €6,461.06. 2. Her Annual Increment date set on 1st January every year as per the Grade Review. 3. A letter from (the Respondent) stating that the €5,268.94 sum above was a payment in respect of Arrears of Basic Pay and not arrears of Pensionable Pay as stated on our client’s pay slip.”

A letter dated 18th April 2019 from the Respondent’s Solicitors sent in response to the Complainant’s Solicitor’s letter of 27th March 2019 referred to its letter of 22nd February 2019 and stated: “As a general point the Respondent wishes to bring to your attention that the matters set out in that letter do not, in the Respondent’s view display any new evidence in relation to the matters complained of that was not already canvassed at the resumed hearing... The Respondent anticipates that the Adjudication Officer will now proceed to issue your decision in this matter in due course.” The position cited by the Complainant’s Solicitor was not disputed and nor was a further hearing sought.

Findings and Conclusions:

It is necessary to examine the facts giving rise to this complaint in light of the relevant provisions under the Payment of Wages Act 1991. Section 1 defines ‘wages’ as including: “…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,…” Section 5(1) provides: “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.” The remainder of Section 5 sets out the circumstances in which an employer may make a lawful deduction from an employee’s wages or receive a payment from an employee. Section 6 of the Act provides for the referral of complaints arising from a contravention of Section 5 to the WRC. Section 41(6) of the Workplace Relations Act 2015 provides for a period of six months (extendable to twelve months if reasonable cause is shown) from the date of contravention to the date of referral to the WRC.

It was not in issue that the arrears of pay claimed by the Complainant arising from her retrospective re-grading to Grade V could fall within the definition of ‘wages’ under Section 2 of the Act. The complaint was also within time in circumstances where the arrears arising from the re-grading was not confirmed until 6th June 2018. The Complainant has presented two separate basis for claiming that monies are due and owing to her arising from her re-grading as set out aforesaid. The Respondent has maintained throughout that the Complainant has been paid all sums due and owing.

For the sake of completeness, I will firstly address the Complainant’s initial claim for €13,834.12 and contention that her re-grading should have been based upon the point on her salary scale at the time of the re-grading decision and not on 1st January 2014. Having reviewed the Collective Agreement in question, I am satisfied that on a plain reading of the provision: “The effective date for those promoted under this agreement is 1st January 2014.”, the date from which her re-grading should have been calculated was 1st January 2014 and any claim in this respect is not well-founded.

I now turn to the Complainant’s post-hearing claim for €6,461.06 arising from the Respondent’s letter of 22nd February 2019 confirming the amounts of arrears of pay arising from her re-grading as set out aforesaid. This sum now being sought is the difference between €27,977.33 (€21,977.33 plus €5,268.94) confirmed in writing as being due to her by the Respondent and the sum of €20,785.27 now confirmed as being discharged. The manner in which these matters have been aired between the Parties post-hearing is less than satisfactory. However, given the complexity involved in retrospectively re-grading the Complainant to a Grade V as evidenced by the ensuing catalogue of issues in calculating arrears, and having reviewed all the evidence and documentation furnished, I am led to conclude that at this juncture it would be impossible to accurately confirm a definitive sum of arrears due, also taking into account the loss to the Complainant by reason of the delay in determining and discharging same. I am also of the view that following two hearings, a further hearing and/or adducing independent expert evidence would not serve to further clarify matters or indeed be justified given the small figure in dispute and resources utilised by all concerned to date.

However, I am absolutely satisfied on the balance of probabilities that the Respondent confirmed in writing that the sum of €21,977.39 (6th June 2018) and a further sum of €5,268.94 (4th September 2018) totalling €27,246.33 in arrears of pay arising from the Complainant’s re-grading/s was due. Noting that the latter amount of €5,268.94 was identified at a later stage, I am also satisfied that the Complainant withdrew her dispute and/or signed the ‘HR102 Change to Employee Terms and Conditions’ on the basis that the sum of €21,977.39 would be paid. The Respondent has since confirmed that the sum of €20,785.27 has been paid to the Complainant to date and the description for the sum of €5,268.94 has been clarified. I am further satisfied that subsequent to confirming the aforesaid amounts as being due in writing, the Respondent has unilaterally sought to reduce same. Despite being afforded an opportunity to do so, the Respondent has not sought to adduce any evidence or legal basis as to why it should be permitted to depart from the original amounts communicated and/or agreed with the Complainant in the absence of her written consent and/or within the terms provided by Section 5 of the Payment of Wages Act 1991. I therefore conclude that as a matter of law, the Complainant is entitled to payment of arrears of pay of €27,246.33, in respect of which €20,785.27 has been discharged giving rise to a deduction from her wages of €6,461.06.

Decision:

Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to this complaint in accordance with the relevant redress provisions under Schedule 6 thereunder. For the aforesaid reasons and on the basis outlined above, I find this complaint to be well-founded. Schedule 6 refers to Section 6 of the Payment of Wages Act 1991 which provides as follows:

“A decision of an adjudication officer under Section 41of the Workplace Relations Act 2015, in relation to a complaint of a contravention of section 5as respects a deduction made by an employer from the wages of an employee or the receipt from an employee by an employer of a payment, that the complaint is, in whole or in part, well founded as respects the deduction or payment shall include a direction to the employer to pay to the employee compensation of such amount (if any) as he considers reasonable in the circumstances not exceeding -

(a) the net amount of the wages (after the making of any lawful deduction therefrom) that -

(i) in case the complaint related to a deduction, would have been paid to the employee in respect of the week immediately preceding the date of the deduction if the deduction had not been made, or

(ii) in case the complaint related to a payment, were paid to the employee in respect of the week immediately preceding the date of payment, or (b) if the amount of the deduction or payment is greater than the amount referred to in paragraph (a), twice the former amount.”

Applying the aforesaid provisions for redress, I consider it reasonable in all the circumstances as outlined aforesaid to direct the Respondent to pay the Complainant compensation of €6,461 (rounded down). Section 6 affords latitude to award up to double the amount due and owing (if it exceeds a week’s net wages had the deduction/payment in question not been made). I was minded to increase this award in circumstances where the Complainant is clearly at a loss owing to the delay in having her re-grading confirmed and arrears discharged and has also had the expense of engaging legal representation to enforce her rights. However, I note that at this juncture, the Complainant is willing to accept the sum of €6,461 in satisfaction of this complaint. Any further directions including reinstatement of the Complainant’s ‘effective date’ to 1st January annually are outside my remit under this particular Act but I note that it was confirmed as 1st January annually within the Complainant’s ‘HR102 Change to Employee Terms and Conditions’ following her re-grading. I further note that the provision applicable to an employee in the Complainant’s circumstances in Circular X/Y provides: “…the date of promotion shall be the new incremental date.” It is most regrettable that given the Parties’ lengthy and ongoing employment relationship, that this issue had become so contentious and entrenched and it is hoped that the Parties can move on and avoid further dispute and/or recourse to the WRC / Labour Court. In the event of any further disputes around the Complainant’s pay in the future and to restore her confidence in the process, it might be prudent to engage an agreed independent forensic accountant or expert to assist with the calculation of same.

Dated: 9th December, 2019                                              

Workplace Relations Commission Adjudication Officer: Aideen Collard

Key Words: Payment of Wages Act 1991 – calculation of arrears following retrospective re-grading