ADJ-00009799

ADJUDICATION OFFICER DECISION

Adjudication Reference: ADJ-00009799

Parties:

Complaints:

Date of Adjudication Hearing: 05/06/2018

Workplace Relations Commission Adjudication Officer: Rosaleen Glackin

BACKGROUND.

In accordance with Section 41 of the Workplace Relations Act, 2015 and following the referral of the complaints to me by the Director General, a Hearing was scheduled for 5th June 2018. There were two separate complaints submitted under ADJ -00009799 and ADJ -00010503. These complaints under the Terms of Employment (Information) Act, 1994 and the Organisation of Working Time Act, 1997 – 2015 were submitted under both ADJ’s and both were submitted on the same date 27th July 2017. All complaints under ADJ 00009799 and ADJ 00010503 were heard on the same day and I have issued my Decisions in relation to all the complaints under this ADJ 0009799.

Two Employers were listed on the complaints submitted to the Workplace Relations Commission. As a preliminary issue the Adjudication Officer sought to verify the legal name of the Employer and the Parties were afforded a short adjournment to verify what the name of the Employer was in relation to the Complaints and both Parties verified the correct name was that as set out above in this Decision.

The Respondent sought an adjournment of the Hearing but I noted there was no request for an adjournment prior to the Hearing and the Respondent did not offer any reason for his request for an adjournment safe to say he had no instructions. The Adjudication Officer indicated her intention to proceed.

The Complainant was employed from 15th May 2015 until the employment terminated on 12th July 2017. The Complainant was paid 12.00 euro an hour and she worked 40 hours a week on average. The Complainant referred a complaint to the Workplace Relations Commission on 27th July 2017 alleging the Respondent had breached the Organisation of Working Time Act in relation to Sections 11 – 12 – 14 – 19 – 21 and 23 and the Terms of Employment (Information) Act, 1994 in that she had not been provided with a written statement of her Terms and Conditions of Employment. All the complaints submitted under ADJ 00010503 are duplicates of those submitted under ADJ 00009799 and decisions have issued under ADJ- 0009799 in relation to complaints.

Summary of Complainant’s Position.

ORGANISATION OF WORKING TIME ACT, 1997 - 2015

Section 14. The Complainant stated that she worked the following Sundays within the reference period i.e. from 28th January 2017 to 12th July 2017– 29th January - 5th, 12th, 19th and 26th February – 5th, 12th, 19th and 26th March – 2nd, 9th, 16th, 2nd, 9th, 16th, 23rd, and 30th April – 7th, 14th, 21st and 28th May – 4th, 11th, 18th, and 25th June – 2nd, 9th, 16th and 23rd July 2017. The Complainant asserted that she was not paid a Sunday Premium. The Complainant confirmed at the Hearing that her employment ended on 12th July 2017.

Section 11. The Complainant identified a breach of this Section of the Act on 18 occasions between 3rd February 2017 and 18th May 2017 where the Respondent breached the Act.

Section 12. The Complainant stated that the Employer does not factor in rest breaks into the rosters but the Complainant is allowed to take a break to eat or drink at any time provided the Respondent is not busy. Hence there are no rostered breaks and frequently the Complainant is not able to avail of a 15 minute break after working 4.5 hours or a 30 minute break after working 6 hours. The Complainant stated they were relying on Section 25(1)(4) of the Act where the obligation is on the Respondent to maintain records.

Section 19 and Section 23.

The Complainant stated she was on Maternity Leave from 12th December 2016 until the 28th June 2017. The Complainant stated that while on Maternity Leave from her employment she was required to attend work with the Employer. The Complainant referenced the payslips submitted by the Respondent and stated that these were inaccurate and do not reflect the actual hours worked by the Complainant. The Complainant stated and confirmed at the Hearing that she was paid in cash each week. The Complainant stated she was never paid when she took annual leave. Over the course of 15 weeks she worked an average of 42 hours a week @ €11.00 net an hour and she is claiming annual leave at the commencement of her Maternity Leave of €1848.00 net. She accrued an annual leave entitlement in the reference period of 629 hours and is claiming payment of €554.00 net. The Complainant stated that these monies should have been paid to her on termination of her employment as per Section 23 of the Act.

Section 21.

The Complainant is claiming payment in respect of the following Public Holidays which she stated she worked but was not provided with her entitlements under Section 21 of the Act – Patricks Day 17/3/17 and Easter Monday 17/4/17 – May Public Holiday 1/5/17 and June Public Holiday 5/6/17. The Complainant also argued that while the Respondent did not pay any additional remuneration for Public Holidays, any such Public Holidays in the prior leave year would be capable of being treated lawfully as an additional days annual leave. The Complainant is accordingly claiming payment for 9 additional Public Holidays.

During the course of the Complainant’s Submission at the Hearing, an issue arose whereby the Complainant and her Legal Representatives stated that the Complainant was on Maternity Leave and in receipt of Maternity Benefit from the Department of Social Protection while also working with the Respondent. The Adjudication Officer adjourned the Hearing for 10 minutes to enable the Complainant and her Legal Representatives to clarify their position. On their return the Complainant’s Legal Representative confirmed that the Complainant had been in receipt of Maternity Benefit from the Department while also working with the Respondent. The Adjudication Officer sought confirmation from the Department and this was provided to me by email dated 3rd July 2018 with an attachment from the Department confirming the Complainant was in receipt of Maternity Benefit from 27th December 2016 to 26th June 2017.

TERMS OF EMPLOYMENT (INFORMATION) ACT, 1994.

The Complainant stated she had not been provided with a written statement of her terms and conditions of employment contrary to Section 3 of the Act.

SUMMARY OF RESPONDENT’S POSITION.

Organisation of Working Time Act, 1997.

Section 14. The response was he had no instruction bar the payslips presented to the Hearing.

Section 11. The Respondent stated he had no records and no instructions in relation to this complaint.

Section 12. The Respondent stated he had no records and no instructions in relation to this complaint.

Section 19 and 23. The Respondent stated they had no instructions bar the payslips provided to the Hearing.

Section 21. The Respondent stated they had no instructions bar the payslips provided to the Hearing.

Terms of Employment (Information) Act, 1994.

The Respondent stated he had no records and no instruction in relation to this complaint.

FINDINGS AND CONCLUSIONS.

ORGANISATION OF WORKING TIME ACT, 1997 – 2015.

Ca-00012817 -001. Section 14 of the Act provides (1) “ An employee who is required to work on a Sunday (and the fact of his or her having to work on that day has not otherwise been taken account of in the determination of his or her pay) shall be compensated by his or her employer for being required so to work by the following means – (a) by the payment to the employee of an allowance of such an amount as is reasonable having regard to all the circumstances, or (b) by otherwise increasing the employee’s rate of pay by such an amount as is reasonable in all the circumstances, or (c ) granting the employee such paid time off from work as is reasonable having regard to all the circumstances, or (d) by the combination of two or more of the means referred to in the preceding paragraphs….” The evidence was the Complainant was not provided with a written statement of her Terms and Conditions of Employment and the Respondent’s Representative stated he had no instructions in relation to this complaint. The evidence from the Complainant was that she worked 27 Sundays in the reference period covered by this complaint i.e from 28th January to 12th July 2017 when the employment terminated. The Complainant and her legal representative confirmed at the Hearing that the employment terminated on 12th July 2017 and this is also stated on the Complaint Form. However, I note that in their submission in relation to the alleged breach of Section 14 of the Act it is stated that the Complainant also worked on both 16th and 23rd July 2017 which would be impossible as the Complainant verified the employment terminated on 12th July 2017. During this reference period the Complainant was also on Maternity Leave and being paid Maternity Benefit by the Department of Social Protection from 27th December 2016 to 26th June 2017 – verified by the Department. The Complainant also confirmed that she gave birth on 11th January 2017. I was also provided with payslips and these confirmed the Complainant was paid wages on 6th and 13th January 2017.

CA-00012817-003. Section 11 of the Act provides “An employee shall be entitled to a rest period of not less than 11 consecutive hours in each period of 24 hours during which he or she works for his or her employer”. The Respondent did not provide any evidence to the Hearing. The Complainant provided evidence to the Hearing of 17 breaches of the Act on specified days between 3rd February 2017 and 18th May 2017.

CA-00012817-004. Section 12 of the Act provides that an employee is entitled to a break of 15 minutes after working 4.5 hours and a break of 30 minutes after working 6 hours, this can include the break of 15 minutes after 4.5 hours. The Respondent provided no evidence to the Hearing in relation to this complaint and there were no records provided to the Hearing by the Respondent. The Complainant stated that she did take breaks but only when the Respondent was not busy and that there were no breaks factored in on the Rosters.

CA-00012817-005. Terms of Employment (Information) Act, 1994. The Complainant asserted she was not provided with a written statement of her Terms and Conditions of Employment. There was no evidence presented by the Respondent at the Hearing.

CA-00012818-001. Section 23 of the Act of 1997 provides as follows – 23(1)(b)(ii) “In this subsection relevant period means – (ii) in relation to the cessation of employment of an employee to whom subparagraph (ii) of the said paragraph (c) applies ,that occurs.”

Section 2(1) of the Act defines an annual leave year as from 1st April. The Complainant’s employment terminated on 12th July 2017, therefore the annual leave years to be considered are the 2017/2018 year and the 2016/2017 annual leave years. The Complainant was on Maternity Leave from 27th December 2016 to 26th June 2017. Section 22(1) of the Maternity Protection Act, 1994 provides that while an employee is on “Protective Leave” including Maternity Leave an employee “shall be deemed to be in the employment of the employer and accordingly, while so absent, the employee shall, subject to subsection (6) and section 24, be treated as if she had not been so absent…..”

The Complainant, in her complaint form to the WRC states that she worked 40 hours a week. The Complainant’s Solicitor at the Hearing asserted that she worked 42 hours on average a week. The Complainant confirmed she had been paid 21 hours annual leave of €252.00 on 7th July 2017.

CA-00012818-002.

Section 21 of the Act provides that an employee shall be entitled to either “(a) a paid day off on that day (b) a paid day off within a month of that date (c) an additional day of annual leave or (d) an additional day’s pay.” The evidence from the Complainant was that she worked each Public Holiday within the reference period but was not provided with her entitlements. The reference period covered by this complainant is from 28th January 2017 to 12th July 2017 when the employment ended. There were four Public Holidays in this reference period – 17/3/2017 – 17/4/2017 – 1/5/2017 and 5/6/2017.

Preliminary issue -Public Policy and Enforceability of Employment Rights.

The evidence from the Complainant and her Legal Representatives was that she gave birth on 11th January 2017 and was on Maternity Leave and paid Maternity Benefit by the Department of Social Protection from 27th December 2016 to 26th June 2017 and this was confirmed by the Department which provided that the Complainant had been paid €421.70 from 27th December 2016 to 2nd January 2017 – she was paid €230.00 from 3rd January 2017 to 6th March 2017 - she was paid €235.00 effective from 7th March 2017 to 19th June 2017 and €39.20 from 20th June 2017 to 28th June 2017.

The Complainant and her Legal Representatives also stated that the Complainant was required to work by the Respondent while she was on Maternity Leave and in receipt of Maternity Benefits from the Department as set out above.

The Adjudication Officer requested the Complainant and her Legal Representatives to provide a statement from the Revenue Commissioners in relation to the 2016 and 2017 years. The Revenue Commissioners provided a statement dated 2nd July 2018 in which they state as follows – 2016 (PAY of €2745.00 with no tax paid) – 2017 (pay of €1130.16 with no tax paid). The Complainant stated she was paid cash in hand, that she was paid €12.00 an hour and that she worked 40 hours a week. This would have provided an income of €480.00 gross per week x52 weeks a year.

Issues arise in these complaints in relation to the Revenue Laws and the Social Welfare Code. The Complainant stated and confirmed at the Hearing and post the Hearing that she worked 40 hours a week and was paid €12.00 an hour and she was paid cash in hand while the Revenue Commissioners, as set out above, state she was paid €2745.00 in 2016 and €1130.16 in 2017. The P60 provided to the Complainant for 2016 also shows her total pay for the year was €2745.00. Payslips provided to the Hearing for January, June and July 2017 and these clearly show that the Complainant was paid for 10 hours on 6th January 2017 – 10 hours on 13th January 2017 – 10 hours on 30th June 2017 – 30 hours on 7th July 2017. She was paid €132.00 gross and net on 14th July 2017. The Complainant also informed the Hearing, when questioned by the Adjudication Officer, that she was paid €9.15 an hour from 10th June 2016 to 30th December 2016 - €9.25 an hour from 6th January 2017 to 30th June 2017 and she was paid €12.00 an hour from 7th July 2017 until the termination of her employment on 12th July 2017. I was able to verify from the evidence of the Complainant at the Hearing when the Complainant confirmed she had been paid 21 hours annual leave in the payslip dated 7th July 2017 and this confirms the hourly rate at €12.00 an hour. The payslips of January 2017 also verify an hourly rate of €9.25 an hour.

Text messages between the Complainant and the Respondent in January, February, March, April, May and July 2017 in relation to rosters clearly show the Complainant was scheduled to work during this period.

In the course of my investigation of these complaints it became clear that the complainant commenced maternity leave on 27th December 2016 and that she was expected to remain on maternity leave until 26th June 2017. It was further confirmed to me that the complainant was in receipt of maternity benefit from the Department of Social Protection in respect of that period – confirmed by the Department of Social Protection. This was confirmed by the Department in correspondence dated 12th June 2018 – submitted to the Adjudication Officer post the Hearing.

The complainant in fact returned to work on or about 29th January 2017. She continued to obtain maternity benefit, up to 26th June 2017, while engaged in paid employment. Moreover, as was accepted by the Complainant and legal representative for the complainant, during this period she was paid in cash and without deduction in respect of income tax required by law.

In this context it is noteworthy that all the events or omissions giving rise to the complaints under the Organisation of Working Time Act 1997 occurred in the period during which the complainant was in receipt of maternity benefit and being remunerated by her Employer without statutory deductions.

This raises questions as to whether the complainant can obtain redress under the statutes upon which her complaints were made. This could arise either because the contract under which she worked at the material time was an illegal one or because, on grounds of public policy, she is debarred from obtaining statutory relief.

Entitlement to redress under both the Organisation of Working Time Act 1997 and the Terms of Employment (Information) Act 1994 is dependent upon the existence of a contract of employment between the parties. That must mean a lawful contract of employment. A contract, including a contract of employment, can be rendered unlawful in three principal types of situation. Firstly, a contract which is prohibited by law is illegal and unenforceable. Secondly, a contract, the object of which is unlawful, such as where it is for the sale of drugs or for the sale of stolen property, is unenforceable. The third category of unenforceable contract is where the performance of an essential term of the contract involves illegality, such as a fraud on the Revenue.

In the case of a contract which is neither entered into for an illegal purpose nor prohibited by statute, the performance of the contract will not render it unenforceable unless in addition to knowledge of the facts which make the performance illegal the employee actively participated in the illegality. I refer to the comments of Peter Gibson LJ in Hall v Woolston Hall Leisure Ltd [2000] 1 W.L.R. 225, at p236 – A British Decision). The requirement of active participation was adopted in this jurisdiction by Laffoy J in Red Sail Frozen Foods Ltd (in receivership) and the Companies Act [2006] IEHC 328.

That type of arrangement gave rise to the decision of the Employment Appeals Tribunal in Lewis v Squash (Ireland) Ltd. [1983] I.L.R.M 363. Here, Mr Lewis was managing director of the respondent company until his dismissal on or about 5th November 1981. He claimed redress for unfair dismissal pursuant to the Unfair Dismissals Act 1977. His salary at the material time was €16,000 per annum. However, €2,000 of this amount was treated, contrary to the reality, as ‘expenses’ and was not subject to tax deductions.  

In reliance on a number of UK authorities the EAT concluded that as an essential term of the contract involved a fraud on the Revenue, it was tainted with illegality and unenforceable. That decision predated the amendment of the Unfair Dismissals Act 1977, at Section 8(11) so as to provide, in effect, that a contravention of the Income Tax Acts or the Social Welfare Acts does not deprive a person who is unfairly dismissed from obtaining relief under that Act.   There is, however, no corresponding provision in either of the statutes, namely the Organisation of Working Time Act, 1997 or the Terms of Employment (Information) Act, 1994, upon which the current complaints are grounded.

The effect of a similar type of arrangement was considered by Barron J in Hayden v Sean Quinn Properties Limited [1994] E.L.R 54. In this case the plaintiff brought proceedings claiming wrongful dismissal at common law. The Court found that the plaintiff’s basic salary was agreed at €22,000 but added to this was a sum of €6,000 non-taxable allowance to cover expenses. In the course of his evidence the plaintiff said that this was never intended to cover expenses of which there were none.

The High Court found that the plaintiff’s dismissal was wrongful but because the performance of his contract involved a fraud on the Revenue it was illegal and unenforceable. Barron J expressed the position as follows: -

The defendant is clearly in breach of contract in that the plaintiff's dismissal was wrongful. However, the contract itself was an illegal one. It contained a term designed to lessen the defendant's liability at the expense of the Revenue, something with which the plaintiff concurred. In Napier v National Business Agency Ltd [1951] 2 All ER 264 the facts were almost identical. Part of the plaintiff's salary purported to be in respect of expenses, which at best were only minimal. The plaintiff had claimed to have been dismissed wrongfully. He sued for damages. His claim was dismissed upon the ground that the contract was unlawful and so unenforceable. Sir Raymond Evershed said at page 266: ‘[i]t must surely be that, by making an agreement in that form the parties to it were doing that which they must be taken to know would be liable to defeat the proper claims of the Inland Revenue and to avoid altogether, or at least to postpone, the proper payment of income tax. If that is the right conclusion, it seems to me equally clear … that the agreement must be regarded as contrary to public policy. There is a strong legal obligation placed on all citizens to make true and faithful returns for tax purposes, and, if parties make an agreement which is designed to do the contrary, i.e. to mislead and to delay, it seems to me impossible for this Court to enforce that contract at the suit of one party to it.’ The learned judge then went on to consider whether or not the fraudulent part of the agreement could be severed and held that it would not

The Judge then continued: -

In my view that case would have been decided in the same way and upon the same grounds in this jurisdiction at that date. Notwithstanding the very great changes that have occurred in society in this country since then I do not believe that public policy on this issue would have changed in any way. The plaintiff allowed himself to agree to something which would benefit the defendant at the expense of the Revenue. Such an agreement is unenforceable and the plaintiff's claim must therefore fail.

Applying this principle to the instant case, I am satisfied that all material times the complainant was engaged in an arrangement with her then employer whereby she would receive her wages in cash without deduction of income tax. In that context I am satisfied that the complainant was fully complicit in this arrangement.

In these circumstances I am further satisfied that the complainant’s contract of employment became tainted with illegality. All of the events giving rise to the complaints under the Organisation of Working Time Act 1997 occurred during the continuance of this illegality. An entitlement to redress under the Act of 1997 is contingent upon the existence of a contract of employment between the parties. As was held by the British EAT in Hyland v J H Barker (North West) Limited [1985] IRLR 403, that must mean that the complainant was employed under a lawful contract of employment.

The right to maternity benefit arises from the combined effect of the Maternity Protection Act 1994 and 2004, Chapter 9 of Part II of the Social Welfare (Consolidation) Act 2005, and Chapter 2 of Part II of the Social Welfare (Consolidated Claims, Payments, and Controls) Regulations 2007, as amended.

None of these provisions expressly prohibit a woman from resuming employment before the expiration of the statutory period of maternity leave. Consequently, there was no statutory impediment to the complainant resuming employment when she did. However, the effect of her return to work was to terminate her maternity leave and she no longer enjoyed the protection afforded to women in employment while on maternity leave.

Article 35(1) of the 2007 Regulations provides: -

(1) Subject to sub-article (2), a person shall be disqualified for receiving maternity benefit for such period as may be determined by a deciding officer if, during the period for which the benefit is payable, the person engages in any occupation other than domestic duties in that person’s own household.

Hence, while engaging in work during maternity leave is not in any sense unlawful, the drawing of maternity benefit while working clearly is prohibited.

I am satisfied that, for the reasons stated above, the complainant was not employed under a lawful contract of employment at the times material to her complaints. Consequently, she cannot succeed in her claim for redress under the Organisation of Working Time Act, 1997 – 2015 and the Terms of Employment (Information) Act, 1994.

In these circumstances it is unnecessary for me to deal with the consequences, if any, that flow from the Complainant’s drawing of Maternity Benefit while still in employment with the Respondent

DECISIONS.

Ca-00012817-001. On the basis of the evidence, my findings above and in accordance with Section 41(5) of the Workplace Relations Act, 2015, I declare this complaint is not well founded.

CA-00012817-003. On the basis of the evidence , my findings above and in accordance with Section 41(5) of the Workplace Relations Act, 2015, I declare this complaint is not well founded.

CA-00012817-004. On the basis of the evidence, my findings above and in accordance with Section 41(5) of the Workplace Relations Act, 2015, I declare this complaint is not well founded.

CA-00012871-005 On the basis of the evidence, my findings above and in accordance with Section 41(5) of the Workplace Relations Act, 2015, I declare this complaint is not well founded.

CA-00012818-001. On the basis of the evidence, my findings above and in accordance with Section 41(5) of the Workplace Relations Act, 2015 I declare this complaint is not well founded

CA-00012818-002. On the basis of the evidence, my findings above and in accordance with Section 41(5) of the Workplace Relations Act, 2015 I declare this complaint is not well founded

Dated:   February 6th 2019

Workplace Relations Commission Adjudication Officer: Rosaleen Glackin

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