Complainant

Respondent

Anonymised Parties

A trainee accountant

An accountancy firm

Representatives

None

IBEC

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-00026019-001

04/02/2019

This is a complaint pursuant to the Payment of Wages Act, where the complainant asserts that the respondent unlawfully deducted €3,012.40 from her last pay. She was paid 3 cents in her last pay cheque. The respondent asserts that this was a lawful deduction, arising from €9,000 paid in examination fees in respect of the complainant.

The complainant’s employment on the 31st August 2015 and she handed in her notice on the 21st August 2018. Her line manager did not take it well and told the complainant that she could not leave. The line manager ridiculed her and criticised her for moving from the respondent to the regional office of another firm. He told her to come back when she had changed her mind. The following day, the complainant confirmed her departure. The line manager told her three times that she would have to pay the examination fees. She never saw the line manager again and met a HR representative who said that the complainant would have to pay €9,000 within a month. She said that it was the respondent’s policy to take the last month’s salary when an employee leaves and the fees are due. She said that this required the complainant’s consent. The complainant was later given an extra two months to pay the €9,000.

The complainant outlined that her starting salary was €22,500 per year and had increased to €36,000 per year by the time she left. The complainant outlined that her role was billable or chargeable. She was expected to charge out for 80% of her time. She dealt directly with large multi-nationals and in respect of respondent employees posted abroad. She passed all the CAI examinations and the FAEs in October 2017. Subsequently, she passed Part II of the ITI examinations in April or May 2018 and was now due to sit the Part IIIs. The respondent is not paying for the latter examinations.

The complainant charged out at about €200 per hour and worked 43 hours per week. She charged out for 80% of her time. The charge out rate increased after she passed each set of examinations. She estimated that she charged out €6,880 per week. The respondent sought repayment of €9,000 and the complainant said that this was a tax-deductible expense.

The complainant outlined that she was due 6 or 7 days of annual leave and around 4 days of TOIL at the end of her employment. She should have been paid €3,012.43. This is a net amount and includes annual leave and TOIL. The respondent paid her 3 cents in the last remittance and the complainant took this as an insult.

The complainant said that she was in Italy with her boyfriend who was suddenly hospitalised at the time she should have received her last pay. She explained to the respondent that she needed the money to stay in Italy. As she was not paid her full salary, they could not afford to stay, and her boyfriend had to check out against medical advice.

The complainant said that other trainees who left were not deducted wages. The complainant outlined that she signed the training contract in a room during induction and never received a copy.

The respondent submitted that the complainant resigned in breach of the CAI Regulations. It relies on clause viii of the training contract, which applied across the board. The contract states “If a student wishes to terminate or transfer a training contract before its expiry day then all the education costs incurred up to the date of termination or transfer are repayable to the firm”.

The respondent HR witness outlined that she met the complainant on the 12th September to confirm the fees being sought. The complainant raised how her line manager had reacted to her resignation and she was provided with the grievance and dignity at work policies. The HR witness drafted the memorandum of the 13th September and later extended the time to repay the monies to three months. It was standard practice for the respondent to seek education fees when someone left. The respondent agreed that the complainant had explained in the phone call that she was in Italy and her boyfriend was unwell.

The respondent submitted that it has 250 trainees and this case has knock-on implications. They rejected that others were treated less harshly, and all were deducted their last month’s pay. It submitted that the value for the respondent is in the final six months of the training contract. There are long periods of paid study leave when no hours are charged out.

The complainant’s employment ended on the 19th September 2018. She was due to receive payment of €4,101.84 (gross) and €3,012.43 (net) on the 27th September 2018, consisting of outstanding salary, holiday pay and TOIL entitlements. The pay slip shows that the respondent deducted €3,012.40 for “exam fees” and the complainant received payment of 3 cents.

The complainant asserts that the deduction of €3,012.40 contravenes the Payment of Wages Act as she did not consent to it. The respondent asserts that this deduction was authorised by the complainant’s contract of employment. It refers to the memorandum of the 13th September 2018 and the amount of €9,280 owing to the respondent. It sets out that this is due for the ACA CAP 2 exam (€3,180), ACA FAE (€4,350) and IATI Part 2 (€1,750).

This is a claim pursuant to the Payment of Wages Act. My role is to determine whether the deduction of €3,012.40 was lawful. It is not to decide whether other monies are due; this is a matter for the civil courts.

The respondent outlines that it was entitled to withhold pay, accrued TOIL and annual leave because the complainant owed the examination fees it discharged. As set out in the pay slip, the complainant’s role was chargeable, and her evidence was that she latterly charged out some €6,880 per week. She sat three sets of examinations, passing each on the first occasion. Her success allowed the respondent to increase the hourly rate chargeable to clients. The respondent, therefore, derived an immediate and real-time financial benefit from its investment in the complainant’s professional development.

I also note that the clause relied on by the respondent purports to entitle the employer to recover all examination fees, no matter when the examination was taken. There is no sliding scale where the amount an employer can retain diminishes over time. I note that the clause purports to have application even where an employee transfers office and does not leave that employer’s employment.

It is not clear why the respondent paid the complainant 3 cents in the last pay cheque when it maintained that €6,000 was outstanding. The complainant described the payment of three cents as “an insult” and it is hard to view this in any other way.

According to the last pay slip, €1,418.46 of the monies due to the complainant was holiday pay. Even if a contractual term permitted a deduction in pay, this contractual term could not over-ride the employee’s entitlement to annual leave or cesser pay arising from the Organisation of Working Time Act or the Working Time Directive.

In the instant case, the wages, accrued TOIL and holiday pay were properly payable to the complainant. Section 5(2) of the Payment of Wages Act requires any deduction for goods or services supplied to, or provided for, the employee by the employer be “fair and reasonable in all the circumstances.” In Ryanair Ltd v Downey [2006] ELR 347, the EAT held that the employer’s deduction of all the employee’s wages for his final period of service (also due for training) was not fair and reasonable.

Section 6 of the Payment of Wages Act requires an adjudication officer decide if a complaint is well founded. For the reasons set out, I find that the complaint is well founded, and the deduction was not fair and reasonable. It was not fair and reasonable to deduct the complainant’s entire last salary, including her annual leave entitlement, in circumstances where the respondent had already accrued substantial benefit from the complainant’s successful professional development over three years.

Section 6 provides that a direction can be made for compensation of such amount as is reasonable in the circumstances. Where the amount deducted exceeds one week’s wages, section 6 permits that up to twice the net amount can be awarded.

Taking account of the circumstances of the case, I direct that the respondent pays the complainant compensation of €3,600, being the deduction of €3,012.40 (the net due) and compensation for loss and inconvenience incurred by complainant. I note that the deduction placed the complainant in great financial difficulty while away and she made the respondent aware of this situation.

CA-00026019-001

I find that the complaint pursuant to the Payment of Wages Act is well founded and I direct that the respondent shall pay to the complainant compensation of €3,600.

Payment of Wages Act / deduction

Ryanair Ltd v Downey / fair and reasonable