Complainant

Respondent

Anonymised Parties

A Kitchen Porter

A Takeaway

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-00020885-001

30/07/2018

Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977

CA-00020885-002

30/07/2018

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

CA-00020886-001

30/07/2018

Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977

CA-00020886-002

30/07/2018

The following is a summary of the Complainant’s case.

The Complainant is a Hungarian national and commenced employment with the Respondent as a Kitchen Porter on 26 August 2015. He said that he was paid weekly, gross pay €440 and €390 net pay. He said that he usually worked 46 hours per week with the Respondent in the accommodation and food service industry. He said at the start he worked between two kitchens owned by the Respondent which were in close proximity to each other, but following changes to the management/ownership in and around April 2017, he only worked in one of the kitchens from that point onwards.

He said that from this point things started to deteriorate and by December 2017/ January 2018 the situation was very bad. Staff were not getting paid and were coming and going each and every week. This meant that there was extra pressure on the staff that remained. He said that they were constantly understaffed, and he approached his manager numerous times to ask her help. He said that every time he spoke to his manager she would say everything is sorted and will be fine, everyone will be paid what they are owed, just trust her and they will be rewarded. He said that when he was paid by cheque they would bounce and when he approached his manager she would give him a few Euros in cash to carry him over until the next week, when again she would claim that all would be sorted out.

He said that when he was not paid for weeks on end and he told his manager he would walk out like much of the staff. He was again reassured by her that there were difficulties, but they would be sorted out soon, he will receive all his entitlements and not to worry. He said that he was offered more money to stay on and remain loyal.

He said that it got to the point that he just could not take it anymore and having tried to speak to management over and over and not getting any replies or the same story, he handed in his notice and ultimately left his employment on 16 March 2018. The Complainant said that he lost faith in his employers after he was not paid for work completed for three months, there was no sign of that situation improving and having received cheques, the bank failed to honour those cheques. The Complainant is claiming that he had no option but to terminate his employment with the Respondent as it was not paying him his wages. He said that this amounts to Constructive Dismissal.

The Complainant is claiming that he is owed wages from the third week of January 2018 until 16 March 2018.

The Respondent was put on notice of the hearing and was invited to the hearing but failed to engage and did not present itself at the hearing. I am satisfied that both parties were served notice of the hearing details.

On the day of the hearing when it was evident that the Respondent was not in attendance, I suspended the hearing for some time to allow for its late arrival. In that time, I made contact with the Workplace Relations Commission to see if the Respondent had been in touch to explain the non-attendance. I was informed it had not made contact. On that basis, I started the hearing.

CA-00020885-001 Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991 and CA-00020886-001 Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991 are one in the same claim an I have joined them.

In the circumstances of this matter, I have carefully listened to the evidence tendered by the Complainant at the hearing.

The Law

Section 5 of the Payment of Wages Act, 1991 provides:

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, an

(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.

Further, Section 6 of the Payment of Wages Act, 1991 provides:

6.—(1) An employee may present a complaint to a rights commissioner that his employer has contravened section 5 in relation to him and, if he does so, the commissioner shall give the parties an opportunity to be heard by him and to present to him any evidence relevant to the complaint, shall give a decision in writing in relation to it and shall communicate the decision to the parties.

(2) Where a rights commissioner decides, as respects a complaint under this section in relation to a deduction made by an employer from the wages of an employee or the receipt from an employee by an employer of a payment, that the complaint is well-founded in regard to the whole or a part of the deduction or payment, the commissioner shall order the employer to pay to the employee compensation of such amount (if any) as he thinks reasonable in the circumstances not exceeding—

 (a) the net amount of the wages (after the making of any lawful deduction therefrom) that—  

(i) in case the complaint related to a deduction, would have been paid to the employee in respect of the week immediately preceding the date of the deduction if the deduction had not been made, or

(ii) in case the complaint related to a payment, were paid to the employee in respect of the week immediately preceding the date of payment

or

(b) if the amount of the deduction or payment is greater than the amount referred to in paragraph (a), twice the former amount.

In the circumstances of this case, I am satisfied based on the uncontroverted evidence of the Complainant, that the Respondent is in breach of the Payment of Wages Act, 1991, in that it failed to pay the Complainant his agreed salary for the period between the 14 January 2018 to 16 March 2018 and he has calculated that to be in the region of €4,103.07.

The Respondent has not engaged nor submitted a submission in relation to this complaint.

Having reviewed the evidence, I note that the Complainant is claiming that he was not paid for 9 weeks at €390 net per week.

Accordingly, I have decided that the complaint is well founded. The Respondent shall pay the Complainant €3,510. (€390 x 9 weeks)

CA-00020886-002 -Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977 and CA-00020885-002 Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977 are one in the same claim an I have joined them

The term “constructive dismissal” is not specifically provided for in the Unfair Dismissals Act 1977. However, it is a term commonly understood to refer to that part of the definition Section 1(b) of the Act which provides that:

In order to rely upon the provisions of Section 1(b) the Complainant must establish, in the first instance, that there was a termination of his contract of employment. It was not in dispute that the Complainant resigned from his position by letter.

The Complainant is claiming that he was constructively dismissed from his position with the Respondent due to it continually failing to pay his wages for three months.

As the Complainant is claiming constructive dismissal, the fact of dismissal is in dispute between the parties, and in such circumstances, the onus of proof rests with the Complainant to establish facts to prove that the actions of the Respondent were such to justify terminating his employment.

The appropriate legal test in respect of constructive dismissal was provided by the UK Court of Appeal in the case of Western Excavating (ECC) Ltd -v- Sharp[1978] 1 All E.R. 713. It comprises of two tests, often referred to as the ‘contract test’ and the ‘reasonableness test’. It summarised the ‘contract test’ as follows: “If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any other performance.” The reasonableness test assesses the conduct of the employer and whether it “…conducts himself or his affairs so unreasonably that the employee cannot fairly be expected to put up with it any longer, if so the employee is justified in leaving.”

According to the Supreme Court in Berber -v- Dunnes Stores[2009] E.L.R. 61], it said that “The conduct of the employer complained of must be unreasonable and without proper cause and its effect on the employee must be judged objectively, reasonably and sensibly in order to determine if it is such that the employee cannot be expected to put up with it.”

The question which I must decide in the present case is whether, because of the conduct of the Respondent, the Complainant was entitled to terminate his contract of employment.

The Complainant’s claims unfair dismissal under Section 6 of the Unfair Dismissals Act 1977-2015 and that he has been constructively dismissed under Section 1 of the Act which defines “dismissal” in relation to an employee as:

“the termination by the employee of his contract of employment with his employer, whether prior notice of the termination was or was not given to the employer, in circumstances in which, because of the conduct of the employer, the employee was or would have been entitled, or it was or would have been reasonable for the employee, to terminate the contract of employment without giving prior notice of the termination to the employer”.

In a claim of constructive dismissal, the burden of proof is on the Complainant to show that either the Respondent has breached his contract and as a result he is entitled to resign or alternatively that it is reasonable for the Complainant to resign given the conduct of the Respondent.

The employee may also terminate their contract in response to the employer’s conduct. The breach of contract must be ..“a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any other performance” - Western Excavating (ECC ) Ltd   -v- Sharp [1978] IRLR 27.

Between January and March 2018, the Complainant continually sought payment of his wages owed to him and reassurances that things would be better into the future. He was promised that all would be in order week after week. However, nothing changed. It would appear it got much worse as more people left and with staff shortages he was under more pressure. The fact that he continually lodged his concerns and raised this matter with Management demonstrates that they were on notice of his dissatisfaction with the arrangement. He claims that he was too loyal to the Respondent, but he hoped things would get back on track and it would get better. To demonstrate that, he actually served notice and actually worked out his notice. I note the Respondent sought to dissuade him from leaving by offering him more money if he stayed. However, when when he left, the Respondent still failed to pay him what he was owed. It is just not acceptable that an employee should be left in such an invidious situation for so long by an employer. His goodwill was exploited.

In the circumstances, I find that the Respondent is guilty of conduct which is a significant breach going to the root of the contract of employment. I deem that the Complainant is entitled to treat himself as discharged from any other performance, as per Western Excavating (ECC) Ltd -v- Sharp. The Respondent’s conduct here demonstrates to me that it no longer intends to be bound by one or more of the essential terms of the contract, namely payment of its loyal employee’s wages, and in this circumstance the Complainant is entitled to treat himself as discharged from his employment and he cannot fairly be expected to put up with it any longer. I am satisfied that he is justified in leaving.

I note the Complainant’s evidence where he was continually seeking to raise a grievance with management about his pay. I note the utter disorganisation and chaos at the Respondent at the time. I am satisfied that the Complainant had lost all faith in his employer treating him fairly, he was not being paid and when he was paid cheques were bouncing, all levels of trust had long lapsed. I am therefore satisfied that it was not unreasonable that the Complainant to believe his job was no longer viable and he was entitled to terminate his contract of employment with the Respondent.

In the circumstances, I find that the Complainant has established that the conduct of the Respondent was such that he had no option but to resign his position. I find that the Complainant did give the Respondent an opportunity to address his concerns before taking the decision to resign from his employment.

I find that the Complainant has established a case that he had no option but to resign his position. Accordingly, I find that the Complainant was constructively dismissed from his employment.

Mitigation of Loss

I note that the Complainant has not worked since the termination of his contract, albeit, he is down to do some training. I have not been presented with any evidence to show that serious efforts were made to mitigate his loss beyond this. The Complainant claims that he is looking for work.

I note the decision of the Employment Appeals Tribunal in the case Sheehan v Continental Administration Co Ltd (UD858/1999) where it stated, “a claimant who finds himself out of work should employ a reasonable amount of time each weekday in seeking work. It is not enough to inform agencies that you are available for work nor merely to post an application to various companies seeking work. The time that a claimant finds on his hands is not his own, unless he chooses it to be, but rather to be profitably employed in seeking to mitigate his loss”.

Notwithstanding the Complainant’s claim that he is looking for work, there is a legal duty to mitigate financial loss by taking diligent steps to secure comparable alternative employment. I also note the decision in Burke v. Superior Express Limited UD 1227/2014 where the EAT held that the standard required is a high one. Therefore, I must find that the Complainant has not fully endeavoured to mitigate his loss.

The Complainant’s evidence was that his wages were €440 for 52 weeks per annum which equates to circa €23,000. On the basis of my findings above I declare the complaint is well founded. I direct the Respondent to pay the complainant compensation of €13,000 (thirteen thousand euro). This award of compensation takes into account the Complainant’s failure to fully mitigate his loss.

CA-00020885-001 Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991

The complaint is well founded. The Respondent shall pay the Complainant €3,510 [three thousand, five hundred and ten euro].

CA-00020886-002 -Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977

The complaint is well founded, and I award the Complainant €13,000 (thirteen thousand euro).

Payment of Wages Act - Unfair Dismissals Act – no wages paid – well founded - compensation