Complainant

Respondent

Anonymised Parties

A Bar Manager

A Public House

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-00020668-001

20/07/2018

Complaint seeking adjudication by the Workplace Relations Commission under section 13 of the Industrial Relations Act, 1969

CA-00020668-002

20/07/2018

The respondent company owns two pubs on the north side of Dublin, one just outside the city centre and the other in a suburb near the airport. The complainant started work as a manager of the pub in the suburb in 2002. He now manages the city pub. His complaint is about the fact that his hours and wages have been reduced because, due to trading losses, the pub where he works no longer opens in the mornings.

When he started work as a manager in 2002, the complainant said he was paid €720 per week. By 2018, this had increased to €776 per week.   In early 2018, the directors informed the complainant that the pub he managed was losing money and that they had to address the cost of trading. They decided to cut the opening hours. As a result, from April 2018, they proposed that from Monday to Friday, the pub would open at 3.00pm instead of 10.30am, and on Saturdays and Sundays, the pub would open at 12.00pm and 12.30pm respectively.

Because of this change, the complainant’s hours were reduced from 42 hours per week to 26 hours, and his wages were reduced from €776 to €520. At the hearing, the complainant said that, since April 9th 2018, he has worked an average of 28 hours per week and he is paid an hourly rate of €19.57 per hour.

The complainant said that the trading problems exist only in the pub where he works and that no such difficulties persist in the suburban pub where he started in the business. He argues that he should be allowed to return there on a full-time basis.

The respondent’s case is that the nature of the trade in the pub where the complainant works has changed over the last few years. Customers don’t frequent the premises early in the day and the busiest times are when matches or concerts are on in Croke Park and during the summer months. The area is going through some development and the directors anticipate that this will have a positive effect on trade, but that it may take a couple of years for the business to see any uplift.

Evidence was presented at the hearing of the profit and loss accounts of the two pubs and the overall business and it is evident that the pub where the complainant works is a loss-maker at present. The directors said that they had no option but to reduce costs and to try to trade through the downturn in the area in the hope that the planned regeneration will bring customers back to the pub.

Recognising that this was unpalatable for the complainant, the directors said that they offered him the option of statutory redundancy, but that this was unacceptable. They said that the company is not in a position to increase the redundancy lump sum beyond the statutory two weeks’ pay per year of service plus one week’s pay.

Section 5(1) of the Payment of Wages Act 1991 (“the Act”) is the preamble for a detailed set of sub-sections setting out the prohibitions on an employer from making an illegal deduction from an employee’s wages:

(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 1 of the Act sets out a definition of Wages:

…wages in relation to an employee, means any sums payable to the employee by the employer in connection with his employment, including -

(a) any fee, bonus or commission, or any holiday, sick or maternity pay, or any other emolument, referable to his employment, whether payable under his contract of employment, or otherwise, and,

(b) any sum payable to the employee upon the termination by the employer of his contract without his having given to the employee the appropriate prior notice of the termination, being a sum paid in lieu of the giving of such notice.

The complainant in this case has made a complaint about a reduction in his wages, following from a reduction in his hours of work, about which he is in dispute. While he has suffered a reduction in his wages, he continues to be paid for the hours that he works, “referable to his employment” and in accordance with a new contract of employment issued to him on March 29th 2018. He disagrees with the provision in his new contract that stipulates that his “hours of work will vary in accordance with the needs of the business,” but he continues to be paid wages for the hours that he works.

While I accept the complainant’s argument that his wages have been reduced without his agreement, and I understand his grievance about this, it is my view that an illegal deduction, as defined by the Act, has not occurred.

I have concluded that the employer in this case has not made an illegal deduction from the complainant’s wages and I decide therefore, that this complaint is not upheld.

This complaint under the Industrial Relations Act concerns the same subject matter as the complaint under the Payment of Wages Act; that is, the reduction in the complainant’s hours of work which has resulted in a reduction in his wages of around €150 per week.

At the hearing, the complainant said that, as an employee with long service, and, as he had commenced with the company in the suburban pub, he should be transferred back there.   That pub continues to operate normal opening hours.

At a meeting in March 2018, the complainant was informed that the pub where he worked would no longer open in the mornings and that it would open instead at 3.00pm. This resulted in a reduction of 16 hours in the complainant’s weekly hours of work, and a subsequent reduction in wages.   He was informed that this change would be effective from April 9th 2018.

In discussions with the directors, a proposal emerged that the complainant would be offered the option of voluntary redundancy. As the company was not profitable, the directors said that the redundancy payment would have to be paid out of the social insurance fund. On July 19th 2018, a formal offer was made to the complainant, that he would be made redundant and paid a statutory payment of €20,184. He rejected this offer and it was withdrawn on July 20th. Outlining the reasons why he didn’t accept the redundancy option, the complainant said that, if he left and looked for another job, he would not be paid the wages he agreed to when he started with the respondent’s business in 2002.

Much of the respondent’s case in relation to this complaint is the same as that which has been set out under the heading of the complaint under the Payment of Wages Act above. For reasons outlined at the hearing, they have decided not to transfer the complainant back to the suburban pub.

The position of the respondents is that, until city pub benefits from an upturn in business in the locality, they must manage the business prudently and in a cost-effective way by reducing the hours that the pub is open when customers are not there.   Their plan is to trade out of the local downturn and to resume standard opening hours in the city pub at some stage, perhaps with an investment to expand the service offering and attract more customers.

At the hearing of this complaint, it was evident that the directors were trying to manage a challenging financial situation and the complainant was suffering from the stark decision that they had to take to keep their business on an even keel.

On the complainant’s side, he has rejected the option of redundancy and he simply wants the directors to reinstate his working hours and the wages he was paid before April 2018.

My role as the adjudicator on this matter does not extend to recommending to the directors how they should manage the difficult financial situation in which they find themselves. At the hearing, it was apparent that they had explored every possibility to manage the situation and, having put some cost-saving measures in place, they have decided to wait out the downturn in the hope that the area will benefit from imminent developments.

The complainant’s options are also stark; he must wait out the downturn and accept his reduced hours and wages, or he can re-open discussions on redundancy. It seems to me that this is the extent of his choices at present.

To provide some element of a third option, the directors could consider allocating additional hours to the complainant if one of the staff in the suburban pub is off work for some reason such as holidays or sick leave. His hours could also be reinstated if an employee resigns or retires.   I regret that I can propose no other creative solution to this difficult situation.

I recommend that the directors of the respondent company maintain open the option of redundancy for the complainant. I also recommend that, pending the return of the pub where he works to normal opening hours, they consider the possibility of providing him with additional hours where this is possible, to cover for other employees.

Reduction in wages, reduction in hours of work