FULL RECOMMENDATION
SECTION 13(9), INDUSTRIAL RELATIONS ACT, 1969 PARTIES : TESCO IRELAND LIMITED (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - A WORKER (REPRESENTED BY DAVID GEOGHEGAN, B.L., INSTRUCTED BY O' HANRAHAN LALLY DALTON, SOLICITORS) DIVISION : Chairman: Mr Geraghty Employer Member: Mr Murphy Worker Member: Ms Tanham |
1. Appeal of Adjudication Officer Recommendation No.:- ADJ-00010049
BACKGROUND:
2. This matter was referred to an Adjudication Officer for investigation and Recommendation. On 23 August 2018 the Adjudication Officer issued the following Recommendation:-
- “I recommend that the the respondent pay the complainant redress of €1,000 for the way the grievance process was undertaken in this case.”.
Both parties appealed the Adjudication Officer’s Recommendation to the Labour Court on 5 October 2018 in accordance with Section 13(9) of the Industrial Relations Act, 1969.
A Labour Court hearing took place on 11 January 2019.
DECISION:
Background
This case consists of appeals by both parties of a Decision by an Adjudication Officer of the Workplace Relations Commission under s. 6 of the Payment of Wages Act, 1991 and a Recommendation under s.13 of the Industrial Relations Act, 1969. Adjudication reference: ADJ-00010049.
For the sake of convenience the designations used in this finding are as used in the first instance case heard by the Adjudication Officer. Therefore, Mr. Balans is referred to as ‘the Complainant’ and the Company is referred to as ‘the Respondent’.
The Complainant is a night worker in the Respondent’s distribution centre. His contract of employment stated that he was entitled to an hourly rate of pay of €11.87 and he asserts his right to be paid that amount. The Respondent states that this was an error and the correct rate of pay was €10.29 per hour.
The Complainant brought a claim under the Payment of Wages Act 1991 and a claim under the Industrial Relations Act 1969 to an Adjudication Officer of the Workplace Relations Commission. The Adjudicator found that the higher amount sought by the Complainant was properly payable under the Payment of Wages Act 1991 and that he was entitled to recover the shortfall plus the shortfall in the 20% hourly premium for unsocial hours. The Adjudicator found that a provision in the contract for a second premium of 20% stated to be for ‘Hours worked between Saturday and Sunday…’ did not apply for hours worked early on Saturday mornings. The Complainant had sought an extension of time to a period of 12 months compensation for the shortfall, as his claim had been delayed while he had sought to pursue his complaint via internal procedures. The Adjudicator had found that the redress period under the Payment of Wages Act 1991 was the six months preceding the lodgement of the complaint on 14 August 2017. The sum of the amounts awarded under this Act was €1712.42. In addition, the Adjudicator found that, while the Respondent had run a grievance process that was sound in terms of procedure, this had not addressed the question raised by the Complainant. Accordingly, he recommended that in respect of the claim taken under the Industrial Relations Act 1969, the Respondent should pay redress to the Complainant of €1000.
Both parties appealed the finding. The Complainant appealed the decision in respect of the hours worked on Saturday mornings and the decision not to extend the period of compensation. The Respondent appealed the decisions to award redress to the Complainant under both Acts.
Complainant’s arguments
1. The Complainant is entitled to be paid his contractual salary of €11.87 per hour, subject only to lawful deductions under the Payment of Wages Act 1991. There is no doubt about the fact that the contract is valid and the Complainant has not agreed to amend it or to waive his right to have it enforced. An error does not entitle the Respondent to reduce the Complainant’s salary. The only justifications for deductions from salary are set out in s.5 of the Act and do not cover the circumstances of this case.
2. The Complainant is entitled to the additional 20% premium based on his contractual salary.
3. The natural and ordinary meaning of ‘hours worked between Saturday and Sunday’ requires a premium of 20% to be paid when the Complainant worked between 12 midnight on Friday and 6am on Saturday.
4. The Complainant is entitled to an extension of time under s. 41 of the Workplace Relations Act 2015 as he has demonstrated ‘reasonable cause’ to excuse the delay in instituting proceedings, while he engaged with the Respondent’s lengthy internal grievance and appeal processes.
5. The appeal should be allowed and compensation for 12 months prior to the complaint being lodged on 14 August 2017 should be awarded to the Complainant and his 20% premium payment should be up-rated accordingly. In addition, a further 20% premium should be applied in respect of hours worked on Saturday morning. The overall total owing to the Complainant is €6,088.43.
Respondent’s arguments
1. There were three contracts issued to the Complainant. A 2013 contract set out a rate of €9.69 per hour plus a premium of 20%. The Complainant’s hours were increased in June 2015 and a new contract was issued. It should have read €10.29 per hour plus a 20% payment for unsocial hours as this was the rate applicable. At the time of drafting this contract, the Complainant’s total hourly rate was €11.87 inclusive of the then basic hourly rate of €9.89 plus the premium of 20%. This consolidated figure was entered erroneously into the contract of employment as the basic hourly rate. When this error was brought to the Company’s attention, a new contract issued to the Complainant who refused to sign it.
2. The hourly rate of €11.87 was never paid to the Complainant as it is not a basic salary rate within the Company. The rate that was properly payable to the Complainant was paid to him.
3. The Complainant first raised this matter with the Company in October 2016. The Company explained the error and advised the Complainant that he was receiving the correct rate. Subsequently, the matter was dealt with under the Company’s Grievance Procedure. An outcome letter was sent to the Complainant in March 2017 explaining that the Complainant was being paid correctly. This view was upheld on appeal and he was advised of this in May 2017.
4. It is clear that there was an error. In Aer Lingus v Matchett, PW/18/18, the Court stated that ‘..the salary set out in the letter of appointment…was not the appropriate salary…and consequently must have been an error…therefore, it was not unlawful for the Respondent to deduct the monies..’ While in the instant case the higher rate was never actually paid, this case demonstrates that an administrative error should not result in the error being compounded and applied in practice.
5. The Adjudication Officer erred in his interpretation of s.4(3) of the Payment of Wages Act which provides that a statement containing an error or omission shall be regarded as compliant with the section of the Act where such error or omission is ’made accidentally and in good faith’. Furthermore, s. 5(6) of the Act makes allowance for ‘an error of computation’ by providing that deficiencies or non-payments that arise therefrom are not treated as unlawful deductions. Accordingly, the Complainant received what was properly payable to him.
6. The Complainant’s contract provides for a 20% premium for ‘hours worked between Saturday and Sunday’ not between Friday and Sunday.
7. S. 6(4) of the Payment of Wages Act provides for complaints to be lodged within 6 months. The correct period in this case is the period from 15 February to 14 August 2017 when the claim was lodged. The Complainant had legal representation throughout and could have lodged his claim at an earlier date, so no ‘reasonable cause’ exists to justify a time extension.
8. The decision of the Adjudicator to make an award under the Industrial Relations Act, despite finding that the Grievance process was sound, amounts to awarding the Complainant for the same thing twice.
The applicable law
Section 5(6) of the Payment of Wages Act, 1991 states;
“Where-
- (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 made4 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.”
Discussion
The enforcement of contracts under common law is not a matter for this Court. To ground a claim under the Payment of Wages Act, 1991, the wages concerned must be properly payable. The Court has found previously inDepartment of Public Expenditure v. Brian Collins, PW/18/14and inAer Lingus v. Matchett , PW/18/18,that an error in a contract does not mean that the rate of pay set out in the contract is properly payable. Having regard to the submissions of both parties and the oral submissions made on the day, the Court is clear in this case also that the rate of pay set out in the Complainant’s contract arose due to a computational error and was not properly payable.
Determination
The Court overturns the Adjudication Officer’s Decision that there was a breach of the Payment of Wages Act, 1991 in respect of the Complainant’s hourly rate of pay. It follows from this that the consequential Decision of the Adjudication Officer to award a shortfall in respect of the related premium is also overturned.
The Court concurs with the Decision of the Adjudication Officer that an additional premium payable for ‘Hours worked between Saturday and Sunday’, while the wording could be expressed more clearly, does not mean that a premium is payable for hours worked on Saturday mornings.
The Court concurs also with the Decision of the Adjudication Officer that there is no ‘reasonable cause’ to justify an extension of the six months’ limit for lodgement of the Complainant’s claim.
Finally, the Court agrees with the Adjudication Officer that the Company’s grievance process was procedurally sound. For that reason, the Court overturns the Adjudication Officer’s Recommendation to award compensation under the Industrial Relations Act 1969.
The Decision of the Adjudication Officer is varied according to the above.
Signed on behalf of the Labour Court
Tom Geraghty
TH______________________
21 January 2019Deputy Chairman
NOTE
Enquiries concerning this Decision should be addressed to Therese Hickey, Court Secretary.