Complainant

Respondent

Anonymised Parties

A Beauty Therapist

A Beautician

Act

Complaint Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991

CA-00019335-002

22/05/2018

Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991

CA-00019335-003

22/05/2018

The Complainant was employed by the Respondent as a Beauty Therapist from 21 June, 2017 until 3 January, 2018 when her employment was terminated. The Complainant was paid an hourly rate of €10 per hour. The Complainant claims that the Respondent made unlawful deductions totalling €2,321.50 from her wages contrary to Section 5 of the Payment of Wages Act 1991 on the termination of her employment. The Respondent disputes the claims and contends that no unlawful deductions were made from the Complainant’s wages on the termination of her employment.

CA-00019335-002 – Complaint under the Payment of Wages Act 1991

The Complainant submits that she received notification by way of letter from the Respondent on 28 December, 2017, while absent from work on stress related sick leave, that her employment was being terminated. The Complainant contends that she was entitled to one month’s notice on the termination of her employment in accordance with the terms of her contract of employment. The Complainant contends that she only received a payment of €220 in respect of her notice entitlement and did not receive payment in lieu of the one month’s notice from the Respondent on the termination of her employment.

The Complainant claims that the Respondent’s failure to pay her in lieu of her notice entitlements constitutes an unlawful deduction from her wages contrary to Section 5 of the Payment of Wages Act 1991.

CA-00019335-003 – Complaint under the Payment of Wages Act 1991

The Complainant submits that the Respondent made further unlawful deductions from her wages on the termination of her employment in respect of the following:

·         €531.50 in unpaid wages in respect of 53 hours and 15 minutes worked during the period from 18 December, 2017 to 24 December, 2017.

·         €820.08 in unpaid annual leave entitlements in respect of 1035 hours during her period of employment.

·         €655.00 in respect of the cost of a training course which she attended during her period of employment.

·         €104.55 in respect of uniform costs.

The Complainant submits that she received three separate payments from the Respondent following the termination of her employment, namely:

·         €220.00 in respect of her statutory notice entitlement.

·         €150.00 in respect of a deduction taken from her wages for the cost of a training course.

·         €180.00 in respect of a deduction taken from her wages for the cost of a training course.

The Complainant disputes that the Respondent was entitled under the terms of her contract to deduct an amount of €655.00 from her wages in respect of training costs and a further sum of €104.55 in respect of uniform costs.

The Complainant contends that the Respondent made unlawful deductions totaling €2,321.50 from her wages (allowing for the payments of €550.00 which she has received) in respect of both claims under the Payment of Wages Act 1991.

CA-00019335-002 – Complaint under the Payment of Wages Act 1991

The Respondent disputes the Complainant’s claim that she was entitled to one month’s notice on the termination of her employment. The Respondent submits that the Complainant was notified in writing by letter dated 27 December, 2017 that her employment would terminate with effect from 3 January, 2018.

The Respondent submits that the Complainant was afforded her statutory entitlement of one week’s notice in accordance with the requirements of the Minimum Notice and Terms of Employment Act 1973.

CA-00019335-003 – Complaint under the Payment of Wages Act 1991

The Respondent disputes the Complainant’s claim that unlawful deductions were made from her wages in respect of annual leave entitlements, unpaid wages, uniform costs or training costs on the termination of her employment.

The Respondent disputes the Complainant’s claim that she was owed €531.50 in unpaid wages on the termination of her employment for hours worked during the week from 18 December, 2017 to 24 December, 2017. The Respondent contends that the Complainant was fully paid for all hours worked on the termination of her employment.

In respect of the training costs, the Respondent submits that it agreed to fund the cost of a training course (in relation to High Definition Brow Training) for the Complainant on 18 August, 2017 at a cost of €655.00. The Respondent submits that the Complainant signed a legally binding agreement prior to participating in this training course that the full cost of the course would be deducted from any balance of monies owing to her should termination of her employment occur before 17 August, 2018. The Respondent submits that it was legally entitled to deduct the cost of this course from the Complainant’s wages in accordance with this agreement and the terms of her written contract on the termination of her employment. The Respondent submits that, as a gesture of goodwill, it reimbursed the Complainant the costs of two other training courses in May, 2018 (in the amounts of €150.00 and €180.00) which she had completed during her period of employment.

The Respondent submits that there was a further lawful deduction of €104.55 taken from the Complainant’s wages in respect of the non-return of her uniform following the termination of her employment. The Respondent submits that the deduction in respect of the Complainant’s uniform was provided for in her contract of employment.

In respect of annual leave entitlements, the Respondent disputes the claim that an unlawful deduction was made from her wages in respect of her annual leave entitlements. The Respondent submits that the Complainant’s annual leave entitlements were calculated as follows:

·         Total hours actually worked                                          1037.75

·         Less breaks of 121 days x 1 hour per day                   -121.00

·         Total Hours actually worked                                           916.75

·         8% Holiday Entitlement                                                       73.74

·         Paid Holidays (actual time off)                                           55.50

·         Nett holiday hours due @ date of employment end   17.84

·         Holiday Hours paid in final payment                               20.78

·         Overpayment of holiday entitlement in hours               2.94

The Respondent submits that the Complainant’s annual leave entitlements were overpaid by €29.40 on the termination of her employment.

The issue for decision in relation to the Complainant’s claims is whether the Respondent made unlawful deductions from her wages contrary to Section 5 of the Payment of Wages Act 1991. In considering this issue, I must first decide whether the claimed unlawful deductions were in fact “properly payable” to the Complainant within the meaning of Section 5 of the Act.

Section 5(1) of the Act provides: -

“(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.”

Section 5(6) of the Act provides: —

(a) the total amount of any wages that are paid on any occasion by an employer to an employee is less than the total amount of wages that is properly payable by him to the employee on that occasion (after making any deductions therefrom that fall to be made and are in accordance with this Act), or

(b) none of the wages that are properly payable to an employee by an employer on any occasion (after making any such deductions as aforesaid) are paid to the employee,

then, except in so far as the deficiency or non-payment is attributable to an error of computation, the amount of the deficiency or non-payment shall be treated as a deduction made by the employer from the wages of the employee on the occasion.

The present complaint was referred to the Director General of the WRC on 22 May, 2018. Therefore, the cognisable period for the purpose of the complaint is the six-month period prior to the referral of the complaint namely, 23 November, 2017 to 22 May, 2018.

CA-00019335-002 – Complaint under the Payment of Wages Act 1991

It was common case that the Complainant was employed by the Respondent from 21 June, 2017 until her employment was terminated with effect from 3 January, 2018.

The Complainant has claimed that the Respondent made an unlawful deduction from her wages contrary to Section 5 of the Act by failing to pay her one month in lieu of notice on the termination of her employment.

In considering this issue, I note that the Complainant adduced evidence that she was notified by way of letter dated 27 December, 2017 (which she received on 28 December, 2017), while absent on certified sick leave due to work related stress, that her employment would be terminated with effect from 3 January, 2018. The Complainant accepts that she also received a payment of €220 from the Respondent in respect of her statutory notice entitlement. In the circumstances, I am satisfied that the Complainant was afforded her statutory notice entitlement in accordance with the provisions of Section 4 of the Minimum Notice and Terms of Employment At 1973.

However, the Complainant contends that the Respondent failed to pay her in lieu of one month’s notice which she claims she was entitled in accordance with the terms of her contract of employment. In considering this matter, I note that the Employment Appeals Tribunal has held that, if notice had been given and the employee could not have worked out that notice because he or she was sick, there is no loss due to any contravention of the Minimum Notice and Terms of Employment Act 1973. In such circumstances, the loss is due instead to the employee’s inability to earn (see, for instance, McLoughlin -v- DNU Ltd MN744/1987, Lehane -v- Feeney UD 868/1987 and McIntyre -v- Hendrik Haulage Ltd MN2623/1992). I am satisfied, therefore, that an employee who is ill and not available for work during the notice period is not entitled to any compensation, as that employee is deemed unavailable for work.

Having regard to the evidence adduced, I am satisfied that the Complainant was absent from work on certified sick leave for an indefinite period when the Respondent notified her on 28 December, 2017 that her employment was being terminated. I find that the Complainant was not available for work during either the statutory notice period (of one week) or the extended notice period provided for in her contract of employment and therefore, is not entitled to any compensation, as she was unavailable for work.

Accordingly, I find that the Complainant’s claim that the Respondent made an unlawful deduction contrary to Section 5 of the Payment of Wages Act 1991 in relation to the failure to make a payment of one month’s pay in lieu of notice is not well founded.

CA-00019335-003 – Complaint under the Payment of Wages Act 1991

The Complainant has claimed that the Respondent made unlawful deductions from her wages in respect of training costs, uniform costs, unpaid wages and unpaid annual leave entitlements on the termination of her employment.

In respect of the claim in relation to the deduction of training costs, I note that it was not in dispute that the Respondent deducted the sum of €655.00 from the Complainant’s wages on the termination of her employment in relation to the cost of a training course she had attended during her period of employment. It was not in dispute that the Complainant signed a written agreement with the Respondent on 17 August, 2017 whereby it was agreed that “should termination of employment occur before 17 August, 2018 [the Complainant] gives permission and agrees to the full course amount of €655.00 being deducted from any balance of monies owed to her by [the Respondent]”. It was also provided in the Complainant’s written contract of employment which she signed on 12 July, 2017 that: “Where training fees are due back from staff members, the money will be deducted from final monies owing at termination”. In the circumstances, I find that the Respondent did not breach Section 5 of the Act by deducting the agreed sum from the Complainant’s wages in respect of training costs and that it did so pursuant to the contractually agreed terms of the Complainant’s contract of employment and with the express consent of the Complainant.

In respect of the claim in relation to the deduction of uniform costs, I note that it was not in dispute that the Respondent deducted the sum of €104.55 from the Complainant’s wages on the termination of her employment in relation to the non-return of her uniform. I also note that there was a term in the Complainant’s written contract of employment which she signed on 12 July, 2017 which provided that: “Where uniforms are due to returned, this money will be deducted from final monies owing at termination”. I accept the Respondent’s evidence that the Complainant’s uniform was not returned for a period of eight months following the termination of her employment and in a condition which could not be used again. In the circumstances, I find that the Respondent did not contravene Section 5 of the Act by deducting the sum of €104.55 from the Complainant’s wages in respect of uniform costs and that it did so pursuant to the contractually agreed terms of the Complainant’s contract of employment and with her express consent.

In respect of the claim in relation to unpaid wages accrued during the week from 18 to 24 December, 2017 (namely, Week 51), I note from the records provided in evidence by the Respondent that the Complainant worked a total of 53 hours and 25 minutes during this period. I am satisfied that the Respondent adduced evidence from its payroll system that the Complainant’s wages were correctly calculated in the sum of €533.52 in respect of the hours worked during this period. I am satisfied that the Respondent made the deductions in respect of the outstanding training costs and uniform costs from wages owing on the termination of her employment which was in accordance with the terms of her contract. In circumstances, I find that the Respondent did not make an unlawful deduction from the Complainant’s wages contrary to Section 5 of the Act in relation to hours worked during the material period in question.

In respect of the claim in relation to unpaid annual leave entitlements, the Complainant has claimed that the Respondent made an unlawful deduction from her wages by failing to make payment of an amount totalling €828.00 relating to unpaid annual leave entitlements on the termination of her employment. The Complainant contends that this entitlement was accrued by virtue of her having worked a total of 1035 hours during her period of employment (i.e. 8% of 1035 x €10 per hour = €828.00. The Respondent adduced evidence in the form of records from its time clocking system (i.e. clocking in/out times) which confirmed that the Complainant worked a total of 1037.75 hours during her period of employment. The Respondent made deductions of 121 hours in respect of unpaid breaks and 55.50 hours relating to 4 days paid annual leave from its calculation of the Complainant’s outstanding annual leave entitlement on the termination of her employment. The Complainant disputes the manner in which her annual leave entitlements have been calculated and contends that the deduction in respect of breaks was unlawful and that the calculation in respect of the relevant number of hours for the 4 days annual leave which she took is incorrect.

In considering this matter, I note that the Complainant’s contract of employment provided that “Your holidays will be 8% of the worked Holidays will be paid in compliance with the Organisation of Working Time Act 1997”. I am satisfied that the appropriate method for calculating the Complainant’s annual leave entitlements was in accordance with Section 19(1)(c) of the Organisation of Working Time Act 1997 i.e. “8 per cent. of the hours he or she works in a leave year (but subject to a maximum of 4 working weeks)”.

Having regard to the evidence adduced, I am satisfied that the deduction of the 121 hours in respect of breaks when calculating the Complainant’s annual leave entitlements was applied by the Respondent in a manner consistent with the relevant provisions of the Organisation of Working Time 1997 and her contract of employment. In the circumstances, I find that the Respondent did not make an unlawful deduction from her wages arising from the manner in which it allowed for her unpaid breaks in the calculation of her annual leave entitlements.

However, I find that the deduction of 55.50 hours in respect of the five days annual leave which the Complainant had taken during her period of employment was not in accordance with the relevant provisions of the Organisation of Working Time (Determination of Pay for Holidays) Regulations 1997 (S.I. 475/1997) which provides for the calculation of holiday pay. It was not in dispute that the Complainant was paid in respect of 5 days annual leave (namely, 30 September, 2017 and from 25 October to 28 October, 2017. I am satisfied from the records adduced in evidence that the Complainant’s “normal weekly rate of pay” calculated in accordance with Regulation 3 of the aforementioned Regulations was €380.00. Having regard to the foregoing, I find that the Respondent miscalculated the Complainant’s annual leave entitlements by the sum of €175.00 and that an unlawful deduction in this amount was made from her wages contrary to Section 5 of the Payment of Wages Act 1991.

CA-00019335-002 – Complaint under the Payment of Wages Act 1991

I find that the Respondent did not make unlawful deductions from the Complainant’s wages contrary to Section 5 of the Payment of Wages Act 1991 in relation to her notice entitlements. Accordingly, I find that the complaint is not well founded.

CA-00019335-003 – Complaint under the Payment of Wages Act 1991

I find that the Respondent made an unlawful deduction from the Complainant’s wages contrary to Section 5 of the Payment of Wages Act 1991, and accordingly, that the claim is well founded. I hereby direct that the Respondent pay the Complainant the sum of €175.00 gross, subject to any lawful deductions in respect of annual leave due and not paid on the termination of her employment.

Payment of Wages Act 1991 – Section 5 – Unlawful Deductions – Holiday Pay – Wages – Training Costs – Uniform Costs – Complaint well founded