ADJUDICATION OFFICER DECISION
Adjudication Reference:
Parties:
| Complainant | Respondent |
Anonymised Parties | A PE Teacher | A primary school |
Complaint:
Act | Complaint Reference No. | Date of Receipt |
CA-00024205-001 |
Date of Adjudication Hearing:
Workplace Relations Commission Adjudication Officer:
Procedure:
On the 17th December 2018, the complainant referred a complaint pursuant to the Redundancy Payments Act. It was scheduled for adjudication on the 13th February 2019. The complainant attended the adjudication and two representatives of the respondent primary school also attended.
In accordance with Section 39 of the Redundancy Payments Acts 1967 – 2014 following the referral of the complaint to me by the Director General, I inquired into the complaint and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint.
Background:
The complainant worked as a PE teacher directly employed by the respondent primary school between 1991 and 2018. She worked part-time and only during the school term. She was made redundant. The quandary is how to calculate normal weekly remuneration based on her seasonal employment. It is a quandary because it is not readily clear from the Redundancy Payments Act, and Schedule 3, how this should be calculated.
Summary of Complainant’s Case:
The complainant outlined that she is seeking her statutory redundancy lump sum payment. She said that the respondent had incorrectly calculated her entitlement because it under-estimated her normal weekly remuneration.
The complainant outlined that she commenced employment with the respondent on the 2nd September 1991 and this came to an end on the 19th June 2018. In calculating the complainant’s normal weekly remuneration, the Department of Employment Affairs and Social Protection had said to take the P45 for the last year as the basis of redundancy calculation. The respondent, therefore, took her gross average wage from January to June 2018 and divided this by 26 weeks, when it should have been divided by 21 or 22 weeks.
The complainant said that in 2018, she started on the 8th January and finished on the 19th June 2018. There were two weeks when she was on lay-off (between the 26th March and 9th April). There was also the mid-term break in May (the week of the 7th May) and she returned on the 14th May. She worked for 22 weeks in 2018 and was paid €350 per week.
Commenting on the record of her work in the 2016/17 year, the complainant said that there was an error in respect of March 2017 when she worked 30.15 hours. The complainant outlined that her weekly pay comes out at €350 if periods of lay-off are excluded. She had not worked in the month of December, nor the first week of January, mid-term, Easter as well as the last week in June, all of July and August and the first week in September. |
Summary of Respondent’s Case:
The respondent outlined that the complainant had initially been employed by the school Parents Association but was deemed by Scope Section of the Department of Employment Affairs and Social Protection to be the school’s employee. The respondent accepted that the complainant started in 1991, despite the absence of records for the first six years.
The respondent stated that the complainant had a contracted minimum yearly number of hours of 260 hours plus her holidays. Her hours could be increased if parents were willing to pay more. The respondent outlined that the question was how to calculate the complainant’s average weekly wage. The complainant had an annual hourly rate of hours. The respondent outlined that physical education is now taught by teachers and paid for by the Department.
The respondent submitted that Regulation 20 of Schedule 3 to the Redundancy Payments Act applies as the complainant had a contractual annual entitlement to hours. She billed the school on a monthly basis. The respondent used the 26 weeks the complainant worked in 2018 to calculate her average weekly wage, i.e. every week up to the 30th June. It outlined that using the average over three years leads to a figure of €12,000, i.e. a lower amount. This is because the average gross weekly wage was €224.95, calculated over a 52-week year.
The respondent submitted that the kernel of the case is whether the normal weekly remuneration should be calculated over a 52-week year or according to the weeks worked. The figure the respondent used for 2018 (€234.95) is higher as it did not include the lay-off period over the summer of 2018. The complainant’s pay had also been restored. The respondent referred to the example set out, based on the weekly returns from September 2017 to the end of her employment. |
Findings and Conclusions:
Overview The complainant’s role as PE teacher had been funded from parental contributions, a practice which the Department of Education required to end. Physical education was now to be provided by teachers employed by the respondent, with Department funding. The respondent informed the complainant of her pending redundancy by letter of the 20th April 2018. The complainant’s employment ended on the 19th June 2018. This is clearly a redundancy situation.
While there was no paper work relating to the first years of the complainant’s employment, the respondent accepted that she commenced on the 2nd September 1991.
What is in dispute is how the complainant’s “normal weekly remuneration” should be calculated. The respondent looked at two ways of calculating this, going with approach that yielded the higher lump sum for the complainant. The first way was to calculate “normal weekly remuneration” over the last full year (2017), divided by 52. The second was to calculate normal weekly remuneration for 2018 based on the P45. The respondent opted for the latter approach as it was more beneficial to the complainant, as fewer periods of lay-off were included. The complainant submits that periods of lay-off in 2018 should be excluded, leading to a gross weekly wage of €350.
The most recent contract of employment was made on the 14th October 2015, providing that the complainant worked three days per week, between 11am and 2.20pm, excluding 30 minutes at lunchtime. The letter of the 15th June 2017 refers to the complainant’s annual contracted hours of 260 per year; the letter agrees to increase her pay by 2.5% effective the 1st April 2017. The respondent completed the “certificate of holiday entitlement” form for periods where the complainant was off; this states that the respondent does not pay for public holidays outside of school time.
The complainant’s hourly rate of pay was €43.48, having been increased from €42.42. The payment hours sheets submitted by the complainant show that she worked 264 hours and 45 minutes in 2017/18; 235 hours and 15 minutes in 2016/17 and 254 hours and 45 minutes in 2015/16. The time she worked varied per month. Some months (December, July and August), she worked nil hours. During the school term, the complainant’s hours could vary from 37 hours and 15 minutes (May 2016) to 16 hours and 30 minutes (April 2017).
Nature of the complainant’s employment The complainant was a longstanding employee of the respondent. She worked during the school terms and is, like many employees in education, a seasonal employee. In Blackrock College v Coyle (FTD183), the Labour Court commented on seasonal work in education as follows: “4. The Court attaches no significance to the arrangement that was in place whereby the Complainant signed on for Unemployment Benefits each summer. There are many permanent seasonal contracts of employment in place in the economy. The fact that they are seasonal does not detract from the fact that they are permanent contracts of employment. 5. The Court finds that the Complainant is employed on a permanent annual 39-week contract of employment. She is laid off in June of each year and resumes work in September."
The Redundancy Payments Act defines “lay-off” as “where an employee’s employment ceases by reason of his employer’s being unable to provide the work for which the employee was employed to do, and (a) it is reasonable in the circumstances for that employer to believe that the cessation of employment will not be permanent, and (b) the employer gives notice to that effect to the employee prior to the cessation” [section 11(1)]. In Stanek v G4S Secure Solutions (IRL) RPD 182, the Labour Court held that a notice of lay-off need not be in writing. In this case, a telephone call was enough to start a period of lay-off.
In line with these authorities, I find that the complainant had a permanent, seasonal employment contract with the respondent. I further find that the complainant was on lay-off in the weeks she was not working, for example over the summer period. It follows that the complainant had a normal working pattern or normal working hours during the school term and was otherwise on lay-off.
The Redundancy Payments Act and the statutory context Schedule 3 to the Redundancy Payments Act, 1967 addresses the calculation of a redundancy lump sum payment. It sets out four subheadings: “amount of lump sum”, “continuous employment”, “reckonable service” and “normal weekly remuneration”. The relevant parts of Schedule 3 are: “Amount of Lump Sum 1. (1) The amount of the lump sum shall be equivalent to the aggregate of the following: (a) the product of two weeks of the employee’s normal weekly remuneration and the number of years of continuous employment from the date on which the employee attained the age of 16 years with the employer by whom the employee was employed on the date of dismissal or by whom the employee was employed when the employee gave notice of intention to claim under section 12, and (b) a sum equivalent to the employee’s normal weekly remuneration. (2) In calculating the amount of the lump sum, the amount per annum to be taken into account shall be that obtaining under section 4(2) of the Redundancy Payments Act 1979 at the time the employee is declared redundant.
2. If the total amount of reckonable service is not an exact number of years, the “excess” days shall be credited as a proportion of a year.
3. (a) For the purpose of ascertaining, for the purposes of paragraph 1, the number of years of continuous employment, the number of weeks in the period of continuous employment shall be ascertained in accordance with this Schedule and the result shall be divided by 52. (b) In ascertaining the number of weeks in the period of continuous employment, a week which under this Schedule is not allowable as reckonable service shall be disregarded.
Continuous employment 4. For the purposes of this Schedule employment shall be taken to be continuous unless terminated by dismissal or by the employee’s voluntarily leaving the employment, but for the purposes of this paragraph ‘dismissal’ does not include a dismissal within the meaning of the Unfair Dismissals Act, 1977, and in respect of which redress has been awarded under section 7(1)(a) or 7(1)(b) of that Act.
5. Where an employee’ s period of service has been interrupted by any one of the following — (a) any period by reason of — (i) sickness, (ii) lay-off, (iii) holidays, (iv) service by the employee in the Reserve Defence Forces of the State, (v) any cause (other than the voluntary leaving of the employment concerned by the employee) not mentioned in clauses (i) to (iv) but authorised by the employer, … continuity of employment shall not be broken by such interruption whether or not notice of termination of the contract of employment has been given
Reckonable service 7. For the purposes of this Schedule, a week falling within a period of continuous employment and during which (or during any part of which) the employee concerned either was actually at work, or was absent therefrom by reason of sickness, a dismissal within the meaning of the Unfair Dismissals Act, 1977, and in respect of which redress has been awarded under section 7(1)(a) or 7(1)(b) of that Act, holidays or any other arrangement with his employer shall, subject to paragraph 8, be allowable as reckonable service.
8. During, and only during, the 3 year period ending with the date of termination of employment, none of the following absences shall be allowable as reckonable service — (a) absence in excess of 52 consecutive weeks by reason of an occupational accident or disease within the meaning of the Social Welfare (Consolidation) Act 1993, (b) absence in excess of 26 consecutive weeks by reason of any illness not referred to in subparagraph (a), (c) absence by reason of lay-off by the employer.
Normal weekly remuneration 13. For the purposes of this Schedule, in the case of an employee who is paid wholly by an hourly time rate or by a fixed wage or salary, and in the case of any other employee whose remuneration does not vary in relation to the amount of work done by him, his normal weekly remuneration shall be taken to be his earnings (including any regular bonus or allowance which does not vary in relation to the amount of work done and any payment in kind) for his normal weekly working hours as at the date on which he was declared redundant, together with, in the case of an employee who is normally expected to work overtime, his average weekly overtime earnings as determined in accordance with paragraph 14.
20. For the purposes of this Schedule, in the case of an employee who has no normal working hours, his normal weekly remuneration shall be taken to be the average weekly remuneration, including any bonus, pay allowance or commission, received by the employee concerned over the period of 52 weeks during which he was actually working immediately prior to the date on which he was declared redundant.
21. The date on which an employee is declared redundant shall for the purposes of this Schedule be taken to be the date on which a notice of proposed dismissal was given to the employee in accordance with section 17 or, where a redundancy payment is claimed in accordance with section 12, the first day of the series of weeks of lay-off or short-time referred to in section 7(3).”
In calculating a redundancy lump sum, the Redundancy Payments Act requires that the employee had continuous employment. There is a statutory presumption that employment is continuous, unless the contrary is proved (see section 10 of the Redundancy Payments Act, 1971). Schedule 3 has been amended to provide that periods of lay-off do not break continuity (the Act initially provided that lay-offs of less than 26 weeks did not break continuity).
Schedule 3 also requires that the employee has reckonable service. The Act, as initially enacted, held that periods of lay-off were not reckonable. This was amended by the Redundancy Payments Act, 2003 to provide that periods of lay-off in the 3-year period ending with the date of termination are not reckonable. Logically, it follows that periods of lay-off that precede this three-year period are reckonable.
The Redundancy Payments Act addresses situations of atypical employment, i.e. other than full-time, permanent employment. It, for example, made specific provision for seasonal employees, i.e. those whose employment are punctuated by periods of lay-off. Section 8 prevents an employee who has regular periods of lay-off triggering an entitlement to a redundancy lump sum during a period of “regular” lay-off. A school employee, for example, who has a permanent, seasonal contract could not seek redundancy when the school closes for the summer in circumstances where their role will resume in the new school year.
While Schedule 3 does not explicitly refer to part-time employees, it addresses employees who are paid an hourly time rate or by a fixed wage, including the calculation of any overtime. It caters for employees who are paid piece-rate, i.e. according to their output. It provides for shift workers whose remuneration varies according to their working pattern. In such cases, normal weekly remuneration is assessed in the period of 26 weeks which ended 13 weeks before the date the employee is declared redundant and is divided by 26. As cited in this case, Regulation 20 provides that for an employee with no normal working hours, the normal weekly remuneration is the average over 52 weeks preceding the date the employee is declared redundant.
In An Post v McNeill [1998] ELR 19, the High Court upheld a decision of the EAT that a “casual” employee was entitled to a redundancy lump sum as the 92 breaks in employment were lay-offs. The Court held that the Tribunal was correct to base the entitlement on the complainant’s “normal” wage of £250, i.e. his outgoing wage. In two cases, the UK EAT held that the denominator used in calculating the redundancy entitlement of “term time” employees is the weeks they worked plus annual leave Gilbert v Barnsley MBC [2002] UKEAT 674 and Asgard v Westminster Kingsway College [2010] UKEAT 767. The EAT rejected the proposition that the denominator should be the whole 52-week year.
Whether the complainant had “normal working hours” The respondent outlined that the complainant did not have normal working hours and, therefore, Regulation 20 of Schedule 3 applied. Otherwise, Regulation 13 of the Schedule would apply in determining “normal weekly remuneration”.
Having considered the evidence, I find that the complainant had “normal working hours”. These were the hours the complainant worked during term time and she was on lay-off in other times. I have regard to the High Court decision An Post v McNeill, where Regulation 20 was not applied. While I note that the EAT Decision in Lynch v Bellerophon Ltd (RP1089/2013) cited Regulation 20, this also states that the most recent periods of lay-off are not reckonable. The effect of both applying Regulation 20 and excluding recent periods of lay-off from reckonable service is that lay-offs could be double-counted. I say this as applying Regulation 20 means that lay-offs are included in calculating normal weekly remuneration (leading to a lower amount) but are also periods of non-reckonable service. For these reasons, I conclude that Regulation 13 and not Regulation 20 should be used in calculating the complainant’s normal weekly remuneration.
Calculating the complainant’s lump sum entitlement I calculate the complainant’s lump sum entitlement as follows. The complainant had continuous service from the 2nd September 1991. Her redundancy was declared on the 20th April 2018 and her employment ended on the 19th June 2018.
I find that the complainant also had reckonable service during this period, minus the periods of lay-off in the three years preceding the termination of her employment, i.e. the period of the 20th June 2015 to the 19th June 2018. Given the lay-offs outside of the school term and the complainant not working in the month of December, I calculate that the complainant worked for 34 weeks in a school year. She was, therefore, on lay-off for 18 weeks per year. Schedule 3 provides that lay-offs in the three years preceding the termination of employment are not reckonable. This is a period of 54 weeks.
Applying Regulation 13 of Schedule 3, I find that the amount of the lump sum should be calculated per the complainant's normal weekly remuneration, i.e. the gross pay the complainant received while at work. This is the amount of €350.
Pursuant to the Redundancy Payments Acts, the complainant is entitled to a redundancy lump sum payment on the following criteria.
Date start of employment: 2nd September 1991 Non-reckonable service due to lay-off in the three years preceding redundancy: 54 weeks Date end of employment: 19th June 2018 Normal weekly remuneration: €350
Decisions issued by the Workplace Relations Commission in redundancy claims generally state whether the employee is entitled to a lump sum and if this is the case, the criteria to be used in calculating the amount of the lump sum. For information purposes only, I have run the above criteria through redundancy calculator, and it states that this yields 52.56 weeks of reckonable service. |
Decision:
Section 39 of the Redundancy Payments Acts 1967 – 2014 requires that I make a decision in relation to the complaint in accordance with the relevant redress provisions under that Act.
CA-00024205-001 I find that the complaint is well founded, and the complainant is entitled to a statutory redundancy lump sum payment calculated in accordance with the following facts: Date start of employment: 2nd September 1991 Non-reckonable service due to lay-off in the three years preceding redundancy: 54 weeks Date end of employment: 19th June 2018 Normal weekly remuneration: €350
This award is made subject to the complainant having been in insurable employment under the Social Welfare Acts during the respective period of employment.
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Dated: September 10th 2019
Workplace Relations Commission Adjudication Officer: Kevin Baneham
Key Words:
Redundancy Payments Act / Schedule 3 Seasonal employment Normal weekly remuneration Normal working hours Lay-offs |