Complainant

Respondent

Anonymised Parties

A Sous Chef

A Hotel

Representatives

Mr Neal Flynn, BL

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-00022627-001

15/10/2018

The complainant joined the respondent’s hotel as a senior sous chef on July 26th 2016.   He handed in his notice on September 9th 2018 and he left on September 22nd. His starting salary was €35,000 and this increased to €40,000 in September 2017. His salary was inclusive of a Sunday premium. His complaint is that, while he was employed, he worked 700 hours of overtime up to May 2018 for which he was not paid and, in his final wages, he received pay for 40 hours of “lieu time.”

In his book of documents submitted at the hearing, the complainant included a copy of his contract of employment. Under the heading, “Hours of Work,” his contract provides as follows:

Hours of work – 40 hour week, 5 days out of 7.

Your hours will be defined in your weekly roster & in accordance with business levels. It is the policy of the company that, as far as possible, working additional hours above the norm will not occur. However, under certain circumstances working some overtime is unavoidable and an element of your remuneration package compensates for this. Unless otherwise agreed, you will not be entitled to any extra remuneration for overtime worked from time to time.

The complainant submitted a copy of his letter of resignation dated September 8th 2018. He also included a letter sent to the HR manager on September 11th to formally let her know about his concern with his overtime payments. In this letter, he asked his employer to “work this issue out.” He sent a follow-up e mail in October and he asked for a breakdown of the payments on his last wage slip. He was invited to attend a meeting with the payroll manager, but he was working in a new job and he felt that he should simply get the information he asked for.   When the issue was not resolved, on October 15th 2018, he submitted this complaint to the WRC.

The complainant’s case is that he was a senior chef in the respondent’s hotel for two years, he worked overtime on a regular basis and he was not paid for all the hours that he worked. He estimates that he worked around 700 hours for which he was not paid. He said that his head chef would roster him for up to 50 hours each week, and sometimes for six days a week, but that he was always paid for 40 hours.

The complainant’s final payslip indicates the following payments:

Basic hours - 40 hours: €769.84    

Bank hols – 16 hours: €307.70

Holidays – 102 hours: €1,961.56

Lieu day – 40 hours:   €769.24

With the complaint form that he sent to the WRC on October 15th 2018, the complainant included a printout of his clocking report from July 27th 2016 until May 13th 2018, a period of 87 weeks. The clocking system changed in May 2018 and he has no record of his time and attendance from then up to the date of his resignation in September 2018. He said that this report shows that he regularly worked more than 40 hours each week, but he was paid for 40 hours. A summary sheet shows that, on May 20th 2018, he had worked up 458.57 hours in overtime. No information is available for the weeks from then until his departure on September 22nd 2018. The complainant claims that the non-payment of this level of overtime is not consistent with the provision in his contract of employment that his salary of €40,000 includes pay for working some overtime “from time to time.”

Requirement to Work Additional Hours

The respondent’s case is that the complainant was expected to work additional hours and that a portion of his salary was intended as compensation for these additional hours.   Mr Flynn stated that this provision is explicitly set out in the contract of employment and it was agreed to by the complainant. Mr Flynn said that, in the hospitality industry, an element of flexibility in hours of work is required by employees and the priority is to ensure that work is completed, rather than working contractual hours. While this can be demanding, the wages paid to employees from whom this commitment is expected compensates them for this commitment.   This was particularly the case with the complainant, who was a senior member of the kitchen staff.

In addition to the complainant’s contract of employment, Mr Flynn said that he received a statement of his terms and conditions of employment and a copy of this was submitted in evidence. Under the heading, “Overtime,” this document states:

Hours worked over a 78 hour fortnight may be taken as time in lieu or paid for at the rate of time plus one half for hours worked in excess of 78 per fortnight at the discretion of the Hotel management.   (Hours as required positions (casual) or relief contracts are exempt from this entire clause). All overtime must first be agreed with your Manager.   If you work your day off, you may be permitted to accrue the time in lieu of an overtime payment, at the discretion of your Manager.

Mr Flynn referred to the complainant’s final payslip and the reference to payment for 40 hours or five days indicated as “lieu days.” He said that this payment was for the five times when the complainant worked six days a week. When he was leaving, he had not been paid for these days. Mr Flynn submitted that the respondent’s policy of paying an employee an additional amount for work done on a sixth day must be distinguished from “its contractually mandated and accepted policy of not paying employees any additional sums for additional hours worked during the standard 5 day working week.” Mr Flynn said that, where an employee works six days a week, he should take a day in lieu “shortly afterwards.”

A summary of the complainant’s weekly time sheet was submitted in evidence. This shows that the complainant consistently worked in excess of his contractual 40 hour week; however, he was paid for additional hours in the form of a lieu day, only when the additional hours were worked on a sixth working day. The summary of the time sheet submitted in evidence by the respondent clearly shows the occasions when the complainant received this additional payment.

The respondent’s general manager gave evidence at the hearing and he said that in their business, “there is no such thing as a 40 hour week” and the complainant’s annual salary reflected this. At the same time, he said that when the business was quiet, there was no sanction for leaving early. Breaks are not tracked, and employees may take a break longer than the statutory 30 minutes per day, and there is no issue with this, as long as the business is managed.

With regard to working an extra day in any week, the general manager said that the onus is on the head chef to “give the day back” to the employee.

Payment of Wages Act 1991

The respondent’s submission refers to section 1 of the Payment of Wages Act 1991 (“the Act”), and the definition of wages, meaning,

…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 submission also refers to section 5 of the Act and the treatment of deductions from salary. Section 5(6) provides as follows:

(6) 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 made 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.

Mr Flynn submitted that the complainant’s claim must relate to “wages” as defined in the Act, which are sums payable to the employee in connection with his employment.   The respondent argues that, the respondent was not obliged to pay the complainant for additional hours worked within a five day working week and therefore, “non-payment for such hours does not fall within the meaning of the Act.” The complainant’s contract of employment and his statement of terms and conditions provides explicitly that he will not be entitled to “any extra remuneration for overtime...”

As the complainant’s contract of employment makes it clear that the expectation that he will work additional hours is factored into his annual salary, the respondent argued that he is seeking to be compensated twice in relation to the same hours.

The statement of terms and conditions provides that overtime is at the discretion of management and must be agreed by a manager. The respondent’s case therefore is that there is no basis on which the complainant can claim payment for extra hours worked within a five day week. The respondent stated that, when he worked a six day week, the complainant was paid for an additional day and this is reflected in the time sheets submitted at the hearing.

Time Limit for Making a Complaint

Mr Flynn referred to section 41(6) of the Workplace Relations Act 2015 and the requirement for a complaint to be submitted for adjudication before the expiry of six months from the date of the contravention complained of. He also referred to the “reasonable cause” provision set out at section 41(8), where I, as the adjudicator, may consider a complaint where the contravention occurred up to 12 months from the date of the submission of the complaint, if I am satisfied that the delay was due to reasonable cause.  

Mr Flynn said that the first time that the complainant sought payment for overtime was when he was finishing up in his job in September 2018.

Inspections

The hotel employs around 220 staff and at the end of the hearing, the general manager said that they have had inspections by the WRC and NERA and there have been no issues with contracts, rosters or wages.

Contractual Obligations

At the hearing, we learned that the complainant’s salary of €40,000 included the requirement to work additional hours. The “Hours of Work” provision in his contract of employment and the “Overtime” section in his terms and conditions document were relied upon by the respondent to show that there was no entitlement to pay for overtime except when the complainant worked a sixth day in any week. For convenience, it is useful to reproduce these two paragraphs here:

Contract of Employment section titled “Hours of Work”

Hours of work – 40 hour week, 5 days out of 7.

Your hours will be defined in your weekly roster & in accordance with business levels. It is the policy of the company that, as far as possible, working additional hours above the norm will not occur. However, under certain circumstances working some overtime is unavoidable and an element of your remuneration package compensates for this. Unless otherwise agreed, you will not be entitled to any extra remuneration for overtime worked from time to time.

If I take at face value the statement in the complainant’s contract that “as far as possible, working additional hours above the norm will not occur,” and the respondent’s position that the complainant’s salary of €40,000 included a requirement to work additional hours, it follows that the complainant’s salary is inclusive of a pay for “some unavoidable overtime.” The complainant’s case is that the level of overtime he was required to work was outside the norm and was consistent, regular and rostered throughout the two years that he worked in the hotel.

Terms and Conditions of Employment section titled “Overtime”

Hours worked over a 78 hour fortnight may be taken as time in lieu or paid for at the rate of time plus one half for hours worked in excess of 78 per fortnight at the discretion of the Hotel management.   (Hours as required positions (casual) or relief contracts are exempt from this entire clause). All overtime must first be agreed with your Manager.   If you work your day off, you may be permitted to accrue the time in lieu of an overtime payment, at the discretion of your Manager.

There is some contradiction between this section and the paragraph titled “Hours of Work” in the contract of employment. This section from the terms and conditions statement clearly provides for pay for overtime in excess of 78 hours per fortnight. It also provides for time off in lieu, where this is approved by a manager. This clause seems to imply that time in lieu of overtime may be permitted as an alternative to being paid time plus a half, but this was not the position presented by the respondent at the hearing.

The complainant’s case is that his overtime hours were approved by his line manager, the head chef, and that he was regularly rostered for additional hours.

Information Submitted by the Complainant

The clocking report submitted by the complainant gives start and finish information from July 2016 (week 31) until May 2018 (week 20) and covers a period of 87 weeks. This is a summary of my examination of the complainant’s work pattern over that period:

66 weeks: Apart from one week, when he worked 39.23 hours, the complainant worked five days each week and he worked for more than 40 hours.

6 weeks: The complainant worked six days each week and he worked for more than 40 hours.

13 weeks: The complainant worked part of the week and was on holiday or off work for some reason for one or more days.

2 weeks: The complainant was on holiday for the full week (weeks 4 and 17 in 2017).

An unpaid break of 30 minutes each day is indicated on the clocking report and is not included in the consideration of the hours that the complainant worked.

The report shows that the complainant was paid in lieu as follows:

13th October 2016: 8 hours

3rd April 2017:   42 minutes

14th April 2018: 4 hours

The clocking report shows that in any week that the complainant worked for more than 40 hours, he was paid for 40 hours. In any week that he worked less than 40 hours, he was paid for the actual time he attended at work, less a 30 minute unpaid break each day. It appears therefore that the time and attendance system was set up to pay up to a maximum of 40 hours per week, regardless of the number of hours worked. Where the hours worked were less than 40 hours, the system took account of this and the complainant was paid for the actual hours worked.

In some of the weeks in which the complainant took a day off, he worked more than 40 hours. For example, in week 3, in January 2018, he worked for four days and he had one day off as a paid holiday (Sunday). On three of the four days, he worked more than 10 hours and on one day, he worked more than 12 hours. The following week, he also had one day off (Wednesday). On two days, he worked for 10 hours and on the other two, he worked for 11 hours.

Working for Six Days a Week

It is apparent from the clocking report that the complainant was regularly rostered to work more than 40 hours each week and, for six weeks, he worked on six days, comprising an additional 48 hours (6 days x 8 hours). The report shows that he was compensated for his “lieu days” with a payment for 12 hours and 42 minutes. We have no details of the complainant’s attendance in the four months from May 14th 2018 until he finished work on September 22nd, and therefore, we have no information about the number of times he worked six days a week during that period. His final payslip shows that he was paid for 40 hours in respect of “lieu days.” This means that, for the duration of his employment, he was paid for 52 hours and 42 minutes for working an extra day a week on a minimum of six occasions (a minimum of 48 additional hours).

The “Overtime” section of terms and conditions document provides that overtime may be taken as time in lieu or paid for at time plus one half. I find that the respondent is in breach of this provision because it is evident that time in lieu has been paid for at the basic hourly rate.   As he worked for a minimum of 48 additional hours, he should have been paid for a minimum of 72 hours (48 hours x 1.5). As he was paid for 52 hours, he has been underpaid by at least 20 hours. This takes no account of any occasion on which the complainant worked a six day week in the last four months of his employment.  

Regular and Rostered Overtime

A close analysis of the complainant’s clocking report is beyond the scope of this enquiry. From the 87 weeks featured in the report, to take account of the seasonal variation in the business, I examined the hours worked in the 26 weeks from January 1st until June 30th 2017. For 21 of these weeks, the complainant worked for five days and, apart from one week, he worked more than 40 hours, excluding breaks. On average during these weeks, he worked for 47.67 hours a week. This means that on average, the complainant worked 7.67 extra hours each week, almost one extra day every week.

The complainant worked in the respondent’s hotel for 107 weeks. Based on his clocking report, it appears that, for 75% of that time, or 80 weeks, he worked five days a week for an average of 47.67 hours, a total of 614 additional hours (80 weeks x 7.67 hours). On the summary sheet submitted at the hearing, the “lieu time balance” was shown as 458 hours, but there was no explanation given at the hearing of how this balance was calculated.

Regardless of which figure is correct, it is my view that this cannot be the level of unpaid additional hours envisaged in the complainant’s contract of employment, which provides that “working additional hours above the norm will not occur.”   The additional hours worked by the complainant is equivalent to almost 16 weeks over two years and is certainly not the level of unpaid hours that the complainant expected to work, as he said, “for free.”

Definition of Wages

Counsel for the respondent, Mr Flynn, referred to the definition in section 1 of the Payment of Wages Act which provides that wages are “…any sums payable to the employee by the employer in connection with his employment.” He argued however, that the respondent was not obliged to pay the complainant wages in respect of overtime, because the complainant’s contract provided that he was not entitled to remuneration for overtime. The paragraph titled “Hours of Work” which contains this provision also states that, “as far as possible,” hours above the norm of 40 hours per week “will not occur.” The last sentence of this section states that “unless otherwise agreed, you will not be entitled to any extra remuneration for overtime worked from time to time” (my emphasis). It is my view that this means “occasionally” or “now and again” and not every week.

It is also my view that no employee on a mid-range salary of €40,000 would sign up to a contract of employment where they have no discretion with regard to taking time off but are expected to work almost eight extra hours every week for no pay.   This section in the complainant’s contract of employment does not have the meaning that, at this point, the respondent wants it to have. It simply provides that overtime is required now and again to finish up the service in the kitchen. Because the hotel was short-staffed, and, with the approval of his manager, the complainant worked a significant level of overtime and it is my view that he is entitled to be paid wages for these hours. It is also my view that pay for this overtime is in accordance with the overtime section in his terms and conditions of employment.

Time Limit for Submitting a Complaint

The complainant said that, in 2017, he made enquires with the HR manager about his overtime and lieu days. He said that the HR manager produced a report and she said that she would sort it out; however, she left the company and a new manager joined in December 2017.   This manager attended the hearing and, in her evidence, she said that she was not aware of any investigation carried out by the previous HR manager and she said that the complainant never made any enquires with her.

In his evidence, the complainant said that he knew it was impossible to take time off in lieu of overtime because the hotel was so busy. When he left his job in September 2018, he had accrued an entitlement to 15 days’ holidays. His final payslip shows that he was paid for 102 hours in lieu of holidays not taken, equivalent to 13 days, and 16 hours for public holidays not taken, equivalent to two days. It seems therefore, that, apart from the requirement to work long hours, the complainant took hardly any holidays in 2018. I find it entirely credible that the complainant had no opportunity to take time off in lieu of overtime.

As an explanation for not pursuing this matter before he left his employment, the complainant submitted a letter in evidence dated September 11th 2018, two weeks before his last day at work. In this letter, which he sent to the HR manager, he wrote to express his concern about his overtime and he asked the HR manager to resolve the issue. At the hearing, the complainant said that he expected to be paid for the overtime in his final wages. When he was paid for just 40 hours as “lieu days” and, with no breakdown of what this referred to, he submitted this complaint to the WRC on October 15th 2018.

The complainant said that in the hotel where he worked, there was a shortage of chefs and he co-operated with the head chef to manage the business. It is my view that it was not unreasonable for him to expect that, when he was leaving, he would be paid for his overtime. He made an effort in 2017 to resolve the issue, and again in 2018, just before he left. I am satisfied that, in accordance with section 41(8) of the Workplace Relations Act 2015, I can exercise my jurisdiction to consider the failure of the respondent to pay for overtime for the period of 12 months before this complaint was submitted to the WRC on October 15th 2018.  

Conclusion

I have found that, for at least 75% of the 107 weeks that he worked for the respondent, the complainant worked an average of 7.67 hours’ overtime each week. He received no wages in respect of this work.

I have decided that I will consider the 12 months prior to October 15th 2018, when this complaint was submitted, and I will direct the respondent to pay compensation based on the failure to pay for overtime during that period. As the complainant was at work during this 12 month period from October 16th 2017 until September 22nd 2018, the contraventions span a period of 49 weeks. As I have concluded that the complainant worked overtime for 75% of the weeks of the year, I estimate that he worked overtime during that period for 37 weeks and that each week, he worked on average, 7.67 additional hours. I find therefore, that he is entitled to be paid for 281 hours at time plus a half, equivalent to 422 hours at his hourly rate of pay.  

In addition to pay for overtime, I have found that the complainant was left short of at least 20 hours’ pay in respect of wages for working a sixth day on six occasions.   He was paid for this at a flat rate of pay instead of at time plus a half.

I have concluded therefore, that the complainant is entitled to compensation for 442 hours worked as overtime, for which he was not paid.

The complainant’s annual salary was €40,000 and, from his final payslip, I calculate that his hourly rate of pay was €19.23. As I have concluded that he is entitled to be paid for 442 hours of overtime, he is entitled to €8,500 gross. In accordance with section 6 of the Payment of Wages Act, as amended, I am required to direct the respondent to pay compensation as a net amount. Taking guidance from the total deductions of 27.4% from the gross pay in his final wages, I decide that the respondent is to pay the complainant a net amount of €6,170.

Non-payment of overtime