Complainant

Respondent

Anonymised Parties

A Retail Worker

A Retail Chain

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-00028959-001

05/06/2019

Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994

CA-00028959-002

05/06/2019

The issues in contention concern the restructuring of the Complainant’s pay arrangements by the Respondent employer. In particular the removal of the Commission Payments and the inclusion/non-inclusion of a special qualification supplement to basic pay were particular issues of concern.

The Complainant commenced full time employment in March 2006. In 2013 she moved to a reduced hour arrangement (16 basic hours per week) at her own request. With Wage progressions by April 2019 her Wages were comprised of

1.       A basic rate of € 10.89 per hour

2.       Plus, a qualification “healthy eating supplement” (HES) of €54.92 on average per pay period-€0.35 per hour

3.       Plus, a Sales Commission bonus

In April of 2019 the Respondent informed the Complainant that the Qualification Supplement was inadvertently being double paid in error – it was not a Top Up Supplement to Basic Pay but was intended to have been included as part of the Basic Rate. In effect they alleged that it was being paid on the double. The €10.89 already include it. Basic pay was alleged to be € 10.89 – 0.35 = €10.54. This was the rate then implemented by the Respondent. This change was never agreed to by the Complainant. The hourly rate of €10.89 (or previous pre-Wage Round versions) had been paid for a number of years without comment. It was a carry-over from her days as a full-time staff member. The Employer could not now, almost on a whim, change this rate.

The Respondent had informed all staff in May of a change to the Commission system -it was being abolished and a supplement to employee’s wages (based on previous earnings) was being introduced to replace it. Again, this had never been agreed to by the Complainant and she had not been adequately notified or properly communicated with in regard to this fundamental change in her T &Cs (Terms of Employment information Act,1994 Complaint).

The Wage “Special Payments” being made to compensate employees for any reductions in overall earnings from the Commission changes were based on earnings in 2017/ 2018 reference period and did not accurately reflect the reality of Commission earnings. The reference period was in the midst of the economic downturn. It could not accurately reflect the current situation of a much more buoyant retail sector and the Complainant’s efforts to drive sales.

In summary the Respondent was in breach of the Payment of Wages Act,1991 by the non-agreed changes to the Complainant’s basic pay (the exam supplement) and equally the non-agreed manner of the changes to the Commission system.

The Respondent argued, in summary, as follows

1:       Hourly rate of Pay and the HES

The Hourly rate of Pay of € 10.89 was always an Inclusive Rate – (broken down in was €10.54 plus HES of € 0.35 to give an overall rate of € 10.89). In error the Respondent had not actually clarified this to the Complainant and to compound the openly admitted administrative payroll error they had paid the HES as a salary supplement on top of the €10.89.

When this had come to light in April 2019 they made the changes and communicated these to the Complainant. In recognition of the Respondent’s long service and good employee record they had not sought to recover any due arrears but wrote these off. The Hourly Rate remained € 10.89 but was now classified as a Basic of €10.54 with a €0.35 HES. It was the monthly, in error, special Top Up that was removed.

The Payment of Wages Act,1991 allows for Employers to correct overpayments and as this was the case here there can be no case to answer for the Respondent. It was, also , clearly covered in the Complainant’s Contract. Legal precedents were quoted in support.

2:       The Commission Scheme

The Respondent is a UK and Ireland wide chain of Retail outlets which had a common Commission structure. In late 2018 it was decided that the existing Commission scheme was not achieving the initial goals and was confusing for all involved. It would be discontinued by a new simpler arrangement of Higher Basic pay rates.

All staff were informed, a Road Show was provided, and all Managers were fully briefed to cascade the information to all store staff. The Complainant was written to in May 2019 setting out in detail her position under the changes.

Staff, including the Complainant, who would initially earn less under the new Proposals were to receive a Special Earnings Enhancement to ensure that earnings would remain “at least as much this year and you did last year”.

The Complainant’s earnings have been protected and accordingly no claim can be made under the Payment of Wages Act,1991.

In relation to the Complaint under the Terms of Employment information Act,1994 the Complainant has been kept fully informed, in good time, of all developments.

The Respondent was unable, by the date of the Hearing, to locate the Complainant’s original contract of Employment and relied upon a more recent version. A letter of the 19th September 2013 detailing the changes made at that time (her move to a reduced hours) role was attached in evidence. The requirements of the Act are satisfied and if any irregularities are found they are merely technical with no practical impact on the Complainant.

3:1       Payment of Wages Act, 1991 Complaints - CA-00028959-001

In essence there are two separate complaints here –

1.       The Basic rate of Pay & the allied HES Supplement.

2.       The stopping/replacement of Commission.

3:1:1       The Basic rate of Pay

The Respondent openly admitted that they had made an error in their Administration and any difficulties arising were from their steps to correct this in April 2019. This was the inadvertent “Double Payment” of the HES supplement, both in the basic rate and as an additional Top Up Payment.

Section 5(5) of the Payment of Wages Act,1991 allows for Deductions to correct an Employer payroll error. In the case in hand the Respondent did not seek to make any actual deductions to seek to recover the alleged overpayments but simply wrote off the past amounts.

The Complainant strongly contested the Respondent arguments to satisfy the “error” position. Considerable Oral evidence was given on this salary/HES point by the Respondent People Services Manager, Ms. Xa and the Complainant herself. The Complainant basically argued that the arrangements in place for her had essentially been part of her legal Contract and as such could not be withdrawn or changed without her consent. This was contested by the Respondent as the arrangements had developed in error possibly due to the change in her status when she went to 16 hours.

The only Contract of Employment available to the Hearing was the copy of the 2017 version. The Contract only refers to the basic rate before the HES. The original for the Complainant appeared to have been mislaid. I did not think that the earlier version for the Complainant was likely to have been radically different.

I noted that the Contract does contain a provision for the repayment of “over payment” of salary.

On balance and having carefully considered the evidence I came to the view that the balance of probability lay with the Respondent. An error had been made and once belatedly discovered was corrected.

I did not think there was a good case made for a claim to effectively restore the previous arrangements and as no penalty on the Complainant was incurred by reasons of the Respondent trying to recover past payments, I came to the view that the Payment of Wages complaint was not Well Founded as regards the Basic Pay and the HES.

The Labour Court Precedent quoted by the Respondent – PWD 1822 Aer Lingus and An Employee of May 2018is usefully supportive of this conclusion.

3:1:2     The Commission situation.

The documentary evidence, copy of the Commission rules from September 2014, clearly stated that the

“The Commission scheme remains discretionary and can be changed or altered at any time.”

In the 2017 Statement of Terms and Conditions no reference is made to Commission and it is also not mentioned in the T & Cs letter of the 19th September 2013 from the Respondent to the Complainant. It was clearly outside of the strict Terms and Conditions/Employment Contract,

The details provided in evidence of the Changes made in early 2019 to the Commission scheme were comprehensive. The compensation arrangements to cover potential loss of overall earnings was detailed. The only real issue in contention was effectively the Base Reference Period on which the Compensation/ Earnings Enhancement payment was based. The Complainant felt that an economically distressed period in Ireland had been used. As the Scheme was administered from the UK this was possibly an inadvertent situation. However, the revision Documents allow for a review of the Earnings Enhancement at further annual reviews and changes can be made if necessary.

Considerable Oral evidence was given by Ms. Xa, the People Services Manager and the Complainant herself on this entire situation.

On the Balance of Probabilities and having reviewed all the evidence, both Oral and Written, I came to the view that

1.       The Commission scheme had been discretionary and not directly included in the Contact of Employment.

2.       The changes being proposed were reasonable and sufficient steps were being taken to protect employee earnings.

3.       Changes were possible at future reviews. An element of belief in the future good faith of the Respondent is required here. Reviewing the professional demeanour of Ms. Xa at the Hearing I saw no reason to doubt the implementation of any future revisions if they became necessary,

Accordingly, I did not find that there was sufficient good ground to make a Payment of Wages Act,1991 complaint legally Well Founded.

I set it aside.

3:2       Terms of Employment (Information) Act, 1994 Complaint, CA-00028959-002

This complaint concerns an alleged failure by the Employer – the Respondent to adequately notify the Complainant of changes to her Terms and Conditions of Employment.

In the Complainant’s favour was the inability of the Respondent to produce the Complainant’s original Contract of Employment. However, on Balance and having heard the Oral evidence of the People Services Manager and reviewed the considerable documents/E mails that passed between the parties I did not find that a breach of the Terms of Employment (Information) Act, 1994 regarding changes to the Terms of Employment had occurred.

I found the complaint not to be Well Founded and set it aside

Act

Complaint/Dispute Reference No.

Summary Decision / Please refer to Section Three above for detailed reasoning.

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

CA-00028959-001

Complaint is not Well Founded

Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994

CA-00028959-002

Complaint is not well founded