Complainant

Respondent

Anonymised Parties

Retired post person

Postal delivery service

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997

CA-00019826-001

18/06/2018

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

CA-00019826-002

18/06/2018

The Complainant commenced his employment with the Respondent in July 1971. He retired at the end of December 2017.

The Complainant claims that he did not receive his accrued and untaken annual leave on the termination of his employment.

The Complainant claims that he was subject to an unlawful deduction from his wages.

CA – 00019826-001:  OWT

The Complainant explained that he commenced his employment with the Respondent on the 28^th July 1971 and retired on 29^th December 2017 because of an early retirement scheme.

The Complainant submitted that the leave year in the Respondent organisation runs from 1^st May to 30^th April. The Complainant claims that at the end of his employment he had unused annual leave. The Complainant submitted that he was directed to take this annual leave prior to his retirement.  He took the leave as directed but was then advised that he was not actually entitled to this annual leave.  The Respondent deducted the cost of the annual leave taken from his wages. 

The Complainant argued that as he had worked more than 1,365 hours in the leave year he was entitled to his full statutory compliment of holidays and an additional 5 days under a collective agreement. 

CA – 00019826-002:  PW

The Complainant submitted that the deduction should not have been made and it was carried out in breach of the Payment of Wages Act.  The Respondent did not advise him in advance that they were deducting these monies.  The first the Complainant heard of the deduction was on the 22^nd December 2017 being Christmas week. 

CA – 00019826-001:  OWT

The Respondent submitted that the matter concerns the level of entitlement for untaken annual leave upon retirement. The Complainant’s annual leave was 25 days under his contract of employment. The statutory entitlement in this case is four working weeks in a leave year in which he works at least 1,365 hours. The Respondent argued that my remit was only in respect of disputes regarding to a worker’s statutory allocation under the 1997 Act. It submitted that this case involves contractual entitlements within the Respondent.

The Respondent explained that the Complainant’s leave year is from 1^st May 2017 to 30^th April 2018. In the Complainant’s case he worked 1,327 ½ hours in that period. The Respondent agreed that the Complainant was advised that “going by the leave allocation system, he had 5 days leave left and if he wanted to take them he could”.  It disputes that it directed the Complainant to take the leave that was taken.  The annual leave entitlement for the Complainant was later calculated to the date of his retirement and instead of being entitled to an additional 5 days leave, he owed the Respondent one days leave.  The Respondent then recouped these 6 days’ pay for holiday leave exceeded.  The Respondent accepted that the internal allocation system did not take into account that the advised 5-day entitlement was only due if the Complainant remained in employment for the leave allocation period.  The 5 days leave was to cover until the 30^th April 2018. 

The Respondent argued that it had not deprived the Complainant of his statutory leave entitlement.

CA – 00019826-002:  PW

The Respondent submitted that it adjusted and recouped leave at a final salary situation in circumstances with unfortunately the Complainant took more holidays that he was entitled to.

It stated that it recouped 6 days leave. In basic pay (coupled with 12.5% productivity) this was €781.18.  It confirmed that the Complainant’s pay for Christmas week Friday the 22 December 2017, the Claimants net pay was €312.00.  All further payroll items after the 29^th December 2017 related to outstanding allowances and overtime payments.  The 29^th December 2017 was the effective last day of service.

CA – 00019826-001:  OWT

Section 19 of the Organisation of Working Time Act, 1997 applies. 

“19. Entitlement to annual leave

(1) Subject to the First Schedule (which contains transitional provisions in respect of the leave years 1996 to 1998), an employee shall be entitled to paid annual leave (in this Act referred to as “annual leave”) equal to—

(a) 4 working weeks in a leave year in which he or she works at least 1,365 hours (unless it is a leave year in which he or she changes employment),

(b) one-third of a working week for each month in the leave year in which he or she works at least 117 hours, or

(c) 8 per cent of the hours he or she works in a leave year (but subject to a maximum of 4 working weeks):

Provided that if more than one of the preceding paragraphs is applicable in the case concerned and the period of annual leave of the employee, determined in accordance with each of those paragraphs, is not identical, the annual leave to which the employee shall be entitled shall be equal to whichever of those periods is the greater.

The Complainant argued that he was entitled to 25 days of annual leave. I note that the Labour Court in Ocean Manpower Ltd v Marine, Port and General Workers’ Union DWT981 held:

“Section 27 of the Act provides that an employee or any trade union of which the employee is a member may present a complaint to a Rights Commissioner that the Employer contravened a “relevant provision" of the Act.A "relevant provision" includes the provisions of Sections 21 and 22 and the Regulations. Having regard to the statutory provisions the only question to be determined by the Court is whether it would be in contravention of a relevant provision of the Act for the Company to calculate a day's pay in respect of a public holiday by reference to the Regulations only, rather than by reference to the collective agreement between the parties which, it is claimed, provides for more favourable terms.

The same principle applies to Section 19 (Entitlement to annual leave).

The “leave year” is defined by Section 2 of the Act as “a year beginning on any 1^st day of April”.

I note that the Respondent argued that the leave year in the Respondent organisation starts on 1^st May and ends on 30^th April. Notwithstanding any practical administrative arrangements, the Labour Court has determined in Waterford City Council v O’Donoghue DWT0963 as follows:

“The only leave year which is cognisable for the purpose of determining if an employee received his or her statutory entitlement is that prescribed by the Act itself. That is to say a year starting on 1st April and ending on 31st March the following year. While different arrangements may be put in place for administrative purposes, in determining if a contravention of the Act occurred that Court can only have regard to the lease allocated to an employee in the statutory period.”

The Court outlined that “The purpose of the Act is to provide employees with an entitlement to 20 days annual leave per year. Section 20 of the Act provides, inter alia, that the leave must be granted within the leave year as defined by s.2 or within six months thereafter where the employee consents to its deferral. Section 19(1) provides that the full statutory entitlement accrues to an employee in respect of a leave year in which he or she works at least 1,365 hours. But the entitlement still relates to each year of employment and not to a shorter period. Thus, the effect of s.19(1)(a) is that if an employee is employed for a full year but is absent from work during the year, his or her full entitlement still accrues if they worked the requisite hours during the year. “

And further that “…the Claimant can only succeed in the present claim if it is shown that in the period 1st April 2007 to 31st March 2008 he was allocated less that 20 days annual leave.”

Moreover, the Court held that “…it should be noted that this definition refers to a “year”. As a matter of plain language that means a period of 12 months. The period from 1^st April to 31^st December is a period of nine months and is not capable of being regarded as a year for the purposes of the Act or otherwise.”

Having carefully considered all the submissions, oral and written, made to me during the investigation as well as the evidence presented at the hearing, I find that the entitlement to 20 days relates to annual leave year i.e. 12 months. The period from 1^st April 2017 to 29^th December 2017 when the Complainant retired does not constitute a year for the purposes of the Act. Therefore, even if the Complainant had worked 1,365 hours in that period he did not remain in employment for a full year and therefore his annual leave entitlement would be correctly calculated on pro rata basis.

In this case, the Complainant had taken his full entitlement for annual leave due to him by the start of December 2017 and had even taken 1 extra day’s leave before the error on the internal allotment system advised him there was a further 5 days to take.

I am satisfied that that no contravention of the Act occurred.

CA – 00019826-002:  PW

The Act at section 5 provides in relevant part as follows

5.— (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.

(2) An employer shall not make a deduction from the wages of an employee in respect of;

(a) Any act or omission of the employee, or

(b) Any goods or services supplied to or provided for the employee by the employer the supply or provision of which is necessary to the employment, unless

(i) the deduction is required or authorised to be made by virtue of a term (whether express or implied and, if express, whether oral or in writing) of the contract of employment made between the employer and the employee, and
(ii) the deduction is of an amount that is fair and reasonable having regard to all the circumstances (including the amount of the wages of the employee), and
(iii) before the time of the act or omission or the provision of the goods or services, the employee has been furnished with
(I) in case the term referred to in subparagraph (i) is in writing, a copy thereof,
(II) in any other case, notice in writing of the existence and effect of the term, and
(iv) in case the deduction is in respect of an act or omission of the employee, the employee has been furnished, at least one week before the making of the deduction, with particulars in writing of the act or omission and the amount
of the deduction, and
(v) in case the deduction is in respect of compensation for loss or damage sustained by the employer as a result of an act or omission of the employee, the deduction is of an amount not exceeding the amount of the loss or the cost of the damage, and
(vi) in case the deduction is in respect of goods or services supplied or provided as aforesaid, the deduction is of an amount not exceeding the cost to the employer of the goods or services, and
(vii) the deduction or, if the total amount payable to the employer by the employee in respect of the act or omission or the goods or services is to be so paid by means of more than one deduction from the wages of the employee,
the first such deduction is made not later than 6 months after the act or omission becomes known to the employer or, as the case may be, after the provision of the goods or services.

The Payment of Wages Act is very specific. It affords protections to workers against unlawful deductions of money properly payable to them.   

The Respondent confirmed that there was a deduction of €781.18 from the Claimants pay on the 22nd December 2017.  The Complainant has argued that this was an unlawful deduction of money that was properly payable.

No argument was made that the wages payable on the 22^nd December 2017 were not properly payable, therefore on the balance of probabilities I am taking that they were.

In this case the Respondent did not comply with the requirements of section 5(2)(b)(iv) of the Act: i.e. it did not furnish the Complaint with particulars in writing of the act or omission and the amount of the deduction at least one week before the deduction.

Furthermore, the Respondent was not entirely clear as to the calculations of the sum overpaid in respect of holidays and as such is in breach of section 5(2)(v) of the Act.

Also, in considering Section 5(2)(b)(ii) of the Act, I don’t believe that the deduction is of an amount that is fair and reasonable having regard to all the circumstances (including the amount of the wages of the employee).  The deduction of € 781.18 was made on Christmas week which is in most households a particularly expensive week.  The error came about due to a miscalculation on the Respondents part.

Having regard to the foregoing, I find that the deduction of €781.18 from the Complainant’s final salary payment was an unlawful deduction for the purposes of section 5 of the Act.

CA – 00019826-001:  OWT

The Complaint is not well founded.

CA – 00019826-002:  PW

The Complaint is well founded.  The Respondent is to pay the Complainant €781.18 gross in respect of an unlawful deduction.  Said payment is taxable in the normal manner.

Calculation of holidays.  Unlawful deduction