Complainant

Respondent

Anonymised Parties

Solicitor

Government department

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-00018490-001

13/04/2018

The complainant commenced employment with the respondent on 20/4/2015. His gross pay is €2162 per fortnight. The respondent wrongfully deducted the sum of €1223 from his wages on 5/4/2018.

He submitted his complaint to the WRC 13/4/2018.

Name of the Respondent.

The respondent identified the relevant government department as the correct respondent. Complainant accepts that the relevant government department is his employer, but he named the HR and salary services provider to the Civil Service as the respondent in the belief that the respondent had not authorised the deduction.

The correct respondent is identified in the decision.

The complainant’s complaint is that the deduction of a week’s wages from him on 5 April 2018, in respect of a period of certified sick leave from 13 -19 July 2017 was an unlawful deduction contrary to the provisions of the 1991 Act. The reason given for the deduction was the failure of the complainant to submit the correct MC1 Social Welfare form and certificates to the respondent.

The complainant was unwell on the 13 July 2017, was admitted to hospital on the same day and remained there until 19 July. He was declared fit to resume work on 24 July. He submitted a return to work form plus a medical cert to his department. The HR and salary provider emailed him on the 20 September looking for an outstanding MC1 form. He was not in a position to provide same. He expected therefore to forfeit an amount equal to the disability benefit as the absence of a completed MC1 form prevented the respondent from recouping the disability benefit.

The HR provider notified the complainant on the 20 December 2017 of an unauthorised absence affecting pay and referred to an outstanding medical cert when the complainant states none was outstanding. The social welfare cert was outstanding.

The complainant states that the respondent breached a number of its own regulations and, in this way, made an unlawful deduction. The complainant challenges the view that the failure to submit an MC1 form as required by Circular 12/2015, disentitles the civil servant to any pay for certified sick leave. Neither does it allow the respondent to classify the certified sick leave as unauthorised leave. The complainant submits that the Circular must be implemented in light of the relevant legislation, in particular the Civil Service Regulations Act, 1956 and the Payment of Wages Act 1991. According to Section 16 of the 1956 Act, it is only permissible to withhold pay from a civil servant who has taken an unauthorised absence. Crucially, however the Civil Service Regulations Act,2005 inserted a new subsection 2 to section 16, defining unauthorised leave as

“A period when a civil servant refuses to carry out the duties of his grade shall as respect the civil servant concerned be considered to be a period of unauthorised absence from duty"

The complainant argues that a period of certified sick leave cannot ever meet the latter definition of an unauthorised absence. He never refused to fulfil his duties, and did manage to fulfil some of them while on sick leave.

The complainant states that to reclassify a period of sick leave for which a medical cert has been furnished as a period of unauthorised absence is a misinterpretation of C/L 12/2015 and DPER Guidelines.

He complies with regulation 7, Guide to Sick Leave Regulations, Department of Expenditure and Public Reform which requires submission of a medical certificate and compliance with relevant circulars. The complainant states that these Regulations are the correct basis for determining eligibility to payment while on sick leave.

The complainant relies on section 58B of the Public Service Management Act 2004 (as amended) which provides the Regulations relating to remuneration for sick leave and only refers to disallowing paid sick leave where the length of time has been exceeded which is not the case with the complainant.

The complainant states that The Civil Service Regulations Act, 1956 does not allow for the non-payment of salary merely because an MCI certificate has not been furnished.

The complainant asks how if the deduction was lawful can the respondent now be proposing to repay him – surely that would be unlawful according to section 16 of the civil Service Regulations 1956 as amended.

Contrary to the respondent’s procedures as found in C/L 02/2015 as amended, the complainant received no notification as to the value of the overpayment, nor notification of the process of appeal or question and there was no discussion re repayment plan.

Payment of Wages Act, 1991.

Section 5(5) of the Act specifies that an amount not exceeding the overpayment can be recouped. The salary provider failed to identify what the overpayment was. The respondent recouped a week’s gross wages. The loss to them was the disability benefit which the complainant estimates to be less than €40, yet the actual deduction was €1223.

Section 5(1) is not satisfied by the respondent’s actions.

Section 5(2) requires that the deduction is fair and reasonable in all the circumstances. He was never furnished in advance with the deduction which was to be made. It far exceeds the respondent’s loss. It was made 8 months after the sick leave contrary to the provisions of the Act. There was no notice as per C/l 10/2017. His entire salary as opposed to an estimated loss of €40 was deducted. An unauthorised absence can only be defined by reference to correct authorities. The Director General is the appropriate authority to decide on questions as to whether it is an unauthorised deduction and not the salary provider.

The complainant states that there is no Government Order transferring power from the respondent to the salary provider.

The complainant states the deduction was an unauthorised and misplaced application of the civil service statutes and circular letters and asks the adjudicator to uphold his complaint.

The respondent refutes that there was an unlawful deduction from the complainant’s wages.

They submit that that the issue for decision is whether the wages claimed were properly payable or not. If not, the recoupment is outside of the protection of the Act. The respondent states that it was a legitimate recoupment of an overpayment and that it is governed by section 5 .5 of the Act of 1991.

The respondent relies on the EAT determination, PW 2/97 which stated that

” Whilst there is no specific definition of ‘deduction’ in the payment of Wages Act 1991, guidance can be taken from the definition of wages which includes all sums to which an employee is properly entitled. If an employee does not receive what is properly payable to him or her from the outset, then this can amount to a deduction within the meaning of the 1991 Act”

In that case the allowance for which that complainant was eligible by virtue of agreements was withheld. It was deemed to be an unlawful deduction.

In the instant case, it was not a deduction because the wages already paid to the complainant and   recouped in April 2018, were not properly payable as conditions for payment while out on sick leave had not been met. The payment of wages while on sick leave must conform to the statute and circular letters. The salary for the period 13-19 July was not properly payable because it was unauthorised absence in the sense that the complainant did not comply with the requirements set down in circular letter C/L 12/2015, par 3.1. which provides that when a civil servant is unable to attend work due to ill health the following procedures must be followed:

” For those who are PRSI Class A contributors (post ‘95 appointees), an MC1/2 form must be completed for absences of 6 days or more and sick leave benefit paid by the DSP must be mandated from the civil servant to the employing organisation.”

S.I. 124 of 2014, Public Service Management (Sick Leave) Regulations, sets out the “Conditions for payment of sick leave remuneration”. Section 7, part 2, a, ii, lists one of those conditions as being that “any relevant circular is complied with”;      

Section 2.2 of the Department of Public Expenditure and Reform Circular 12/2015 “Arrangements for Paid Sick Leave” outlines the Civil Servants Responsibilities regarding Paid Sick Leave. These responsibilities include that Civil Servants need to “Be familiar and comply with sick leave regulations and policy”;

The respondent maintains that section 58 A (1) Public Service Management Recruitment Act, 2004, relied upon by the complainant, does not mean that it is the only regulation which governs payment of salary during sick leave or with which a civil servant must comply. It does not mean that it is the only regulation which can disentitle a civil servant to sick pay. The minister has the power to make regulations under section 58B (2) of the 2004 Act

Payment of Wages Act, 1991

The respondent relies on section 5.5. and states that what was recouped was an overpayment as provided for within this section.

The conditions for paid sick leave, as laid out in Statutory Instrument 124 of 2014, Public Service Management (Sick Leave) Regulations and Department of Public Expenditure and Reform Circular 12/2015, were not complied with. The complainant was notified accordingly on four occasions and, on each occasion, was asked to provide the requisite MC1 form from his doctor and that absence of same could affect payment of salary. The complainant did not mandate the Department to deduct the illness benefit as opposed to entire salary. The respondent maintains that no entitlement to paid sick leave exists for non- compliance with completion of MC1 form. The failure to present the relevant certification resulted in his absence being treated as an unauthorised absence, and no payment was due for the period concerned.

The Act of 1991 does not dictate how recoupment in overpayment situations should be executed. C/L DPE189-002-2016, effective from 1 May 2017 deals with recovery of overpayments.

” For example, overpayment might arise when a staff member fails to provide appropriate certification for sick leave ….

Recoupment in one tranche is permissible where the staff member takes unplanned paid leave.

The provider did consult the relevant HR manager in the parent department before the deductions were made. The parent department authorised the deduction.

The respondent advises that recovery of salary in respect of unauthorised absences falls under paragraph 2.8 of the overpayments circular, C/L 10/2017, and is not subject to the procedures (advance notification, right of appeal) set out in paragraph 3. 1 of the same circular.         

The complainant had already been paid for this period and incurred an overpayment. Part 5 of Section 5 of the Payment of Wages Act, concerning “Regulation of certain deductions made, and payments received by employers” provides for overpayments to be deducted without a notice period. The respondent advised the complainant on the 13 November 2017 that failure to submit social MC1 welfare certificates from his doctor, signed by both himself and the doctor for his absence from 13 – 24 July could affect his pay. In the same letter he was advised to claim illness benefit from DSP. The respondent informed the complainant in a letter of 20 December 2017, that failure to submit prescribed documentation would result in his absence being treated as “unauthorised leave” and that a recoupment of the overpayment would take place. While the respondent always endeavours to give specific details of the recoupment value and pay dates scheduling ahead of time, this is not always possible, but not contrary to the Payment of Wages Act.

The respondent advised the complainant on the 9 April that as a once off, and due to the fact that his consultant would not sign the MC1 form 8 months on, they would restore the amount deducted less social welfare payments lost to the respondent owing to the absence of an MC1 form. They would accept his sick cert.

The respondent states that no breach of the Act of 1991 occurred.

Payment of Wages Act, 1991.

I have to decide if the deduction of €1223 made on the 5 April 2018 is an unlawful deduction and contrary to section 5 of the Payment of Wages Act, 1911. In examining the proposition that it was an unlawful deduction, I must consider the relevant regulations governing entitlement to payment of salary while on sick leave and whether they were applied correctly or misapplied so as to determine if the salary was properly payable. If applied correctly this would mean that the period of sick leave would fall into the category of unauthorised leave for which payment of salary would not be properly payable.

Regulations governing entitlement to paid sick leave.

The requirements for receipt of salary during sick leave are set down in circular letter C/L 12/2015, par 3.1. It provides that when a civil servant is unable to attend work due to ill health the following procedures must be followed

” For those who are PRSI Class A contributors (post ‘95 appointees), an MC1/2 form must be completed for absences of 6 days or more and sick leave benefit paid by the DSP must be mandated from the civil servant to the employing organisation.”

The complainant declined to sign the form authorising the provider to follow up with DSP concerning receipt by them of necessary forms for receipt of his illness benefit.

SI 124 of 2014, Public Service Management (Sick Leave) Regulations, sets out the “Conditions for payment of sick leave remuneration”. Section 7, part 2, a, ii, lists one of those conditions as being that “any relevant circular is complied with”. In addition, Regulation 7, Guide to Sick Leave Regulations, Department of Expenditure and Public Reform, 2018, states

“Any communication made by or on behalf of the individual concerned- either at the start of the sick leave absence or during the course of the sick leave absence – must be genuine, made in good faith and comply with the provisions of any relevant circular which requires submission of a medical certificate and compliance with relevant circulars”.

I find that the above circulars are relevant circulars with which compliance is required. If not met, it enables the respondent to classify the certified sick leave, genuine though it was, as unauthorised leave. That being the case, it is difficult for the complainant to maintain that the salary for the period 13- 19 July 2018 was properly payable or that it was not an overpayment. Overpayments are addressed in section 5.5 of the Act as follows

“Nothing in this section applies to—

(a) a deduction made by an employer from the wages of an employee, or any payment received from an employee by an employer, where—

i) the purpose of the deduction or payment is the reimbursement of the employer in respect of—

(I) any overpayment of wages, or

II) any overpayment in respect of expenses incurred by the employee in carrying out his employment, made (for any reason) by the employer to the employee, and

(ii) the amount of the deduction or payment does not exceed the amount of the overpayment”

To consider why it is that section 5.5 of the Act applies, I am guided by the operative circular letters which require the complainant to submit an MC1 form. The complainant argues that the statutes supersede any circular letter. No statute, enacted in 1956 or in 2004 debars the minister from elaborating on its provisions or developing qualifying conditions for payment of salary at a later stage. It is not that the benefit of paid sick leave is removed by the subsequent circular letters but rather that the administrative arrangements for securing this benefit are spelt out in the circular letters. I find that it is legitimate to address developments such as the increased PRSI contributions and benefits for public servants as has been done in circular letters.

I find that the complainant was advised on four occasions of the necessity for submission of correct forms and the consequences for failing to do so.

I find that the salary provider did consult the relevant HR manager in the parent department before the deductions were made.

The respondent states that they are relieved of the obligations set out in par 3 of C/L07/2018 to notify the complainant of the value of the overpayment, proposed repayment plan, procedure for querying the amount etc by virtue of par 2.8 of the same circular letter. Par 2.8 encompasses unplanned unpaid leave, excessive sick leave etc. Notwithstanding that, neither the circular letters or the Act of 1991 prevent the respondent from giving advance notice, identifying the amount to be deducted and the recovery plan for same so as to enable him to meet his pre-arranged financial obligations.

However, the process employed to recover the salary cannot find a remedy in the Act of 1991. I find that the wages were not properly payable.

Based on the evidence submitted, I do not find that it was an unlawful deduction

I do not find this complaint to be well founded.

Deduction of salary ; failure to submit requisite information