Complainant

Respondent

Anonymised Parties

Manager

Interpreting Company

Representatives

Christina O’Byrne BL,

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-00028631-001

23/05/2019

The Complainant is employed as Manager in an interpreting company since 1st October 2015. He is paid €58,234 per annum. He has claimed that the Respondent has made an illegal deduction from his wages.

This complaint relates to the Complainant’s assertion that the Respondent has failed to approve and implement the next phase of the pay restoration that started in 2017 to align salaries with HSE salary scales. In December 2017 pay restoration was approved again in January 2018 linking his salary to HSE grades. In October 2018 another 1 % should have been restored but it wasn’t. He advised that his contract states, “the salary is the maximum point on the Health Services Grade V111 salary scale”. The Staff handbook explicitly states pay scales are “based on the Health Sector grades”. The Staff Handbook also states that pay scales are “adjusted in accordance with agreed national wage agreements”. The minutes of the Respondent’s Board meeting confirmed that they employ administrative staff linked to the HSE Admin Grades IV to VII. The Respondent’s Board reaffirmed on 6th December 2017 its decision to implement the renewal of the HSE salary scales for administrative staff. He has not given his consent in writing to any deduction and the Respondent is in breach of the Payment of Wages Act 1991 Sec 5.

Preliminary point; Time limit

The Respondent raised a preliminary point that the claim is out of time. They stated that the complaint was presented to the Commission on 23rd May 2019 and so the period that may be investigated according to Sec 41 (6) of the Workplace Relations Act 2015 is 24th November 2018 to 23rd May 2019. This complaint refers to an alleged unlawful deduction in October 2018 and so the WRC has no jurisdiction to deal with this case.

Substantive matter

This complaint does not concern an unlawful deduction from wages. He was never the subject of a pay cut during the employment. Therefore, no restoration is due. His contract does not contain a clause which aligns his salary with any future amendments to the HSE salary scale. They rely upon Sec 5(1)(b) and (c) of this Act. He has not suffered a pay reduction he is therefore not owed restoration. And so, there is no unlawful deduction.

The Complainant was appointed on the salary scale outlined in the job advert. In the absence of a company scale the scale utilised was benchmarked against the HSE Grade VIII scale. The job advert did not contain any reference to the HSE salary scale. He was issued with a contract which stated “you will receive starting salary of €57,236 which is the maximum point of the HSE Grade VIII salary scale. There are two further LSI points on the scale”. The contract does not contain a link or commitment to align with any future amendments to the HSE salary scale. In 1st January 2010 FEMPI legislation introduced a number of pay reduction measures were introduced. This reduction was not applied to the Respondent’s staff. This marked a clear divergence from the HSE pay scale. On 20th January 2011 the Respondent applied a 5 % pay cut. The Complainant was not an employee at the time. On 6th December 2017 the Respondent decided to implement a 2.5 % increase in salaries. This decision was taken without the knowledge of the funder which serves to show the voluntary nature of the decision.

Distinction from the HSE

The Respondent is not or never has been a public sector company. There are numerous provisions which have been applied to the HSE staff that have not been applied to the Respondent’s staff. At the time of the Complainant’s appointment HSE staff did not have the possibility to apply for incremental credit assessment and would have commenced at point 1. Had the Complainant been directly aligned to HSE scales then he would have commenced employment at Point 1 starting at €47,014 not €57,236 which he got. In March 2009 the HSE HR Circular 005/2009 Standardisation of Terms and Conditions of Employment Amendments to leave entitlements was applied to the HSE staff but not to the Respondent’s. Like wise there was an increase in the working week from 35 to 37 hours which applied to Public Sector workers, but it was not applied to the Respondent’s. FEMPI introduced a pension levy for HSE staff of 7 % and a further PSPR on pensions of 4 %. This was not applied to the Respondent. The Respondent submits that it has never been a public sector employer and is therefore not bound by any public sector salary scales including the HSE salary scales. This claim is rejected.

Time limit

I note that the complaint was presented to the Commission on 23rd May 2019 and so the period that may be investigated according to Sec 41 (6) of the Workplace Relations Act 2015 is 24th November 2018 to 23rd May 2019. This complaint refers to an alleged unlawful deduction in October 2018.

I note that the Complainant originally submitted a joint claim on behalf of three staff members of the Respondent on 19th March 2019.

I note that they were advised by the WRC that claims under the Payment of Wages Act should be individual claims and not collective ones.

I note that they withdrew the original claim on 23rd May 2019 and immediately submitted a new claim on 23rd May 2019.

The Labour Court in the Cementation Skanska V Carroll DWT0342 case stated, “ in considering if reasonable cause exists it is for the complainantto show that there are reasons which both explains the delay and afford an excuse for the delay…In the context in which the expression reasonable cause appears in the statute it suggests an objective standard but it must be applied to the facts and the circumstances known to the complainant at the material time”.

I find that the Complainant has given a reason for the delay which both explains and affords an excuse for the delay.

I have decided to grant the extension to the time limit.

The period that now may be investigated is 24th May 2018 to 23rd May 2019.

Substantive matter

I find that the Complainant’s contract states, “the salary is the maximum point on the Health Services Grade V111 salary scale”.

I find that the Staff handbook states pay scales are “based on the Health Sector grades”.

I find that the Staff Handbook also states that pay scales are “adjusted in accordance with agreed national wage agreements”.

I note from the Finance Sub Group notes “the respondent employs Administrative Staff linked to the HSE Admin Grades namely Grades IV, Grade V and Grade VII in their contracts of employment.”.

I note the Boards position as contained in an email from a Mr TS dated 18th October 2017 stating; “In essence the respondent has maintained the link with the HSE scales since its inception in 2007. The voluntary pay cut in 2011 maintained the link to the scales so no break occurred. Now that the restoration agenda has led to an increase in the HSE pay scales, the respondent intend to apply these as a routine matter. As you are aware, the Board of the respondent have approved this..”

I find that the Respondent implemented restoration of pay cuts but not in October 2018 after the HSE adjusted its scales by 1 %.      

Based on the above information I find that the Respondent’s pay scales were aligned with that of the HSE as affirmed by the contract of employment, the Staff handbook and notes from the Board and Finance subcommittee.

I find the Respondent’s argument that as the Complainant was not employed when the cuts took place, he can’t expect to have restoration, is irrelevant as this case centres on whether his pay was aligned to that of the HSE.

I do not accept the other arguments of the Respondent, i.e. restoration is an increase not a deduction, increase in hours not applied to the him and the pension arrangements not applying to him, not to be convincing as again this case centres on whether his pay was aligned to that of the HSE.

I find that the Complainant’s pay scale should have increased by 1 % in October 2018.

I find that the Complainant has a contractual entitlement to the monies claimed.

I find that this claim is not protected by the provisions of Sec 5 (1) a) b) or c) of the Payment of Wages Act.

I find that the non-payment of the increase due, amounts to an illegal deduction from the Complainant’s wages.

I find that the Respondent has breached Sec 5 of the Payment of Wages Act.

Non-restoration of pay cuts an illegal deduction from wages.