Complainant

Respondent

Anonymised Parties

A Sales and Business Development Manager

A Communications Solutions Company

Representatives

The Complainant attended the Hearing in person and was not represented

Sean Ormonde & Co. Solicitiors

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-00024644-001

03/01/2019

The Complainant was employed by the Respondent as a Sales and Business Development Manager from 30 April, 2018 until 14 December, 2018 when his employment was terminated. The Complainant claims that the Respondent has contravened Section 5 of the Payment of Wages Act 1991 in terms of its refusal to pay him for the duration of an agreed three month extended probationary period which was due to expire on 9 February, 2019. The Complainant claims that the Respondent made an unlawful deduction from his wages in the amount of €10,739.00 on the termination of his employment in respect of wages due to him for the period from 14 December, 2018 to 9 February, 2019.

The Respondent disputes the claim under the Payment of Wages Act, 1991 and contends that the Complainant’s employment was terminated on 14 December, 2018 with notice in accordance with the terms of his contract of employment. The Respondent contends that there was no contractual obligation which entitled the Complainant to be paid on the termination of his employment in respect of the period from 14 December, 2018 to 9 February, 2019.

The Complainant commenced employment with the Respondent as a Sales and Business Development Manager on 30 April, 2018. The Complainant had a six-month probationary review meeting with management on 9 November, 2018 and it was agreed that his probationary period would be extended by a further three months until 9 February, 2019, at which point a further review would take place to confirm the status of his employment. The Complainant contends that there was a written agreement to extend his probationary period by three months until 9 February, 2019.

The Complainant was informed by management at a meeting on 3 December, 2018 that his employment was being terminated with effect from 14 December, 2018 due to unsatisfactory performance in relation to his KPI’s. The Complainant contends that he had an agreement with the Respondent to an extension of his probationary period up to 9 February, 2019 and therefore, is entitled to payment of his salary from the date of termination of his employment on 14 December, 2018 to 9 February, 2019.

The Complainant contends that the Respondent’s failure to pay his salary for the duration of the agreed three-month additional probationary period constitutes an unlawful deduction from his wages contrary to Section 5 of the Payment of Wages Act, 1991.

The Complainant was employed as a Sales and Business Development Manager pursuant to a contract of employment dated 3 April, 2018 and commencing on 30 April, 2018. The Complainant’s contract of employment explicitly refers to an initial probationary period and reserves the right to extend same.

On 9 November, 2018, a probationary review meeting was held and the Complainant was informed that his probationary period would be extended for a period of up to three months. This extension was on foot of significant concerns on the part of the Respondent that the Complainant was unable to fulfil his duties to a satisfactory standard. In particular, concerns were raised about the Complainant’s Sales Strategy document, account management and sales planning and reporting.The Respondent contends that the Complainant’s performance did not improve over the subsequent weeks and a decision was made to terminate his employment. On 3 December, 2018, the Complainant was given two weeks’ notice that his contract would be terminated with effect from 14 December, 2018. The Complainant was paid a gross annual salary of €70,000 and the Respondent could not afford to continue to employ him in circumstances where he was not delivering on the investment made in him.

The Respondent submits that it was made clear to the Complainant, both verbally and in writing, that the extension of his probationary period was granted for a period of up to three months. Nothing in this extension served to displace the notice provisions in his contract of employment or to provide him with a guaranteed fixed term of employment from 14 December, 2018 to 9 February, 2019. The Respondent had a contractual entitlement to terminate the Complainant’s contract of employment on the giving of one week’s notice. The Respondent did so on 3 December, 2018 and as such the Complainant’s employment terminated on 14 December, 2018 and he had no entitlement to pay thereafter.

The Respondent submits that there could not be an unlawful deduction from the Complainant’s wages contrary to the Payment of Wages Act, 1991 after 14 December, 2018 in circumstances where he was no longer employed.  

The relevant Law

Section 1 of the Payment of Wages Act provides for the following 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 of employment 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.”

Section 5(1) of the Act provides:

“(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 5(6) of the Act provides: —

(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.

The Complainant referred this complaint to the Workplace Relations Commission on 3 January, 2019. By application of the time limits provided for in Section 41(6) of the Workplace Relations Act 2015, the cognisable period for the purpose of this claim is confined to the six-month period ending on the date on which the complaint was referred to the WRC, namely 4 July, 2018 to 3 January, 2019. The Complainant’s employment was terminated on 14 December, 2018 and he claims that the unlawful deduction from his wages occurred on this date. Therefore, it is clear that the unlawful deduction which is alleged to have occurred in respect of the unpaid wages claimed is within the cognisable period covered by the complaint.

The issue for decision in relation to the Complainant’s complaint is whether or not the Respondent made an unlawful deduction from his wages contrary to Section 5 of the Payment of Wages Act 1991 in relation to unpaid wages which he claims were due to him on the termination of his employment in respect of the period from 14 December, 2018 to 9 February, 2019. In considering this issue, I must first decide whether the claimed unlawful deduction was in fact “properly payable” to the Complainant within the meaning of Section 5(6) of the Act.

I note that the main key facts are not in dispute between the parties in relation to this matter. It was common case that the Complainant’s six-month probationary period was extended by mutual agreement between the parties following a review meeting on 9 November, 2018. It was also common case that the Complainant was subsequently informed by the Respondent on 3 December, 2018 that a decision had been taken by management to terminate his employment with effect from 14 December, 2018 due to unsatisfactory performance relating to attaining KPI’s.

I have examined the Complainant’s written contract of employment and it is clearly provided in this contract that his initial probationary period of six months may be extended by the company at or before his initial probationary review. I also note that this contract provides that “During the Contract Period the period of notice in the event of termination of your employment is for both parties, two weeks. During the period of probation this notice period shall, at the discretion of the Company, be reduced to one week where there is significant shortcomings in your ability to perform the duties required”.

I am satisfied that the Complainant’s employment was terminated in accordance with the terms provided for in his written contract of employment and that there was no contractual obligation upon the Respondent to pay the Complainant for the duration of the extension to his probationary period. In the circumstances, I find that the unpaid wages which the Complainant is claiming for the period from 14 December, 2018 to 9 February, 2019 were not properly payable to him within the meaning of Section 5(6) of the Act. Therefore, the question of compliance with subsections (1) and (2) of Section 5 of the Act do not arise for consideration. Accordingly, I find that the complaint is not well founded.

I find that the Respondent did not make an unlawful deduction from the Complainant’s wages contrary to Section 5 of the Payment of Wages Act 1991. Accordingly, I find that the complaint is not well founded.

Payment of Wages Act 1991 – Section 5 - Unlawful Deduction – Probation Period – Unpaid Wages - Wages not properly payable - Complaint not well founded