PWD2038

1.An appeal of an Adjudication Officer's Decision No. ADJ-00021741.

BACKGROUND:

2.The Employer appealed the Decision of the Adjudication Officerto the Labour Court on 2 June 2020 in pursuant to Section 7(1) of the Payment of Wages Act, 1991. A Labour Court hearing took place on 11 December 2020. The following is the Determination of the Court:-

DETERMINATION:


This is an appeal by Lee Overlay Partners Limited against the Decision of an Adjudication Officer ADJ-00021741, CA-00028619-001 under the Payment of Wages Act 1991 (‘the Act’) by Mr Stephen Kiely against his former employer.

For ease of reference, the parties are referred to as at first instance. Mr Stephen Kiely is referred to as “the Complainant” and Lee Overlay Partners Limited is referred to as “the Respondent”.

The Complainant submitted a complaint under the Act to the Workplace Relations Commission on 23rd May 2019. He claimed that the Respondent failed to pay him a sum of €6,300 on 31st January 2019 in respect of two bonus payments which were due from reviews in 2016 and 2017. This failure he claimed constituted an unlawful deduction under the Act.

By Decision dated 23rd April 2020, the Adjudication Officer found that the claim was well founded. The Respondent appealed the Decision on 2nd June 2020.

Background

The Complainant was employed by the Respondent as a Head of Settlements from December 2016 until he resigned with effect from 3rd May 2019.

On the commencement of his employment, the Complainant was given a contract of employment stating that he was offered future Discretionary Incentive Compensation Awards of €4,000 to be paid on 31st January 2017, €3,000 to be paid on 31st January 2018 and €3,000 to be paid on 31st January 2019 subject to meeting various conditions and targets. The Complainant met the relevant targets on 31st January 2017 and 31st January 2018 and received the appropriate payments.

On 18th January 2018, he was offered future Discretionary Incentive Compensation Awards of €3,300 to be paid on 31st January 2019 and €3,000 to be paid on 31st January 2020 subject to meeting various conditions and targets. The conditions of the awards were as follows:-

He was informed that on the date the instalment becomes payable, each of the following conditions must be met:-

• i.You must be employed by the company;

  ii.You have not given notice to the company of the termination of your employment;

  iii.You have received a ranking of 5 or above in your most recent performance appraisal; and

  iv.You have not been subject to the company’s disciplinary procedure in the preceding 12 months.

The Complainant submitted that while the Respondent alleged that he did not follow procedures in respect of an incident which occurred while he was out of the office on 19th December 2018, an investigation of the matter found that there was no breach of procedures.

Ms Mary Paula Guinness, B.L., instructed by Philip Lee Solicitors on behalf of the Respondent stated that the Complainant did not meet the relevant targets and conditions for the incentive payments which fell due on 31st January 2019 therefore he was not paid the two payments. Ms Guinness therefore, submitted that there was no unlawful deduction of wages. The Respondent alleged that the incident which arose on 19th December 2019 occurred as the Complainant unilaterally and without authorisation changed the firm’s procedures and verbally instructed those amendments to his direct report.

Ms Guinness said that all employees were reminded on 2nd August 2018 that any breach of the Firm’s procedures would automatically result in that employee being subject to the Firm’s disciplinary procedures. Therefore, on 22nd January 2019, the Complainant was required to attend a disciplinary meeting with management. At the conclusion of the meeting, the Firm considered that the matter had been adequately resolved and there was no necessity to progress further through the disciplinary procedure. Therefore, she argued that as the Complainant had been the subject of disciplinary procedures on 22nd January 2019, he did not meet the conditions for the awards due on 31st January 2019.

Ms Guinness said that the Firm, as a regulated entity, whereby its policies and procedures are guided directly and indirectly by various regulatory and risk requirements and considerations, must comply with its legal obligations, and must accordingly, strictly adhere with the terms of the scheme.

The Complainant disputed the Respondent’s contention that the meeting held on 22nd January 2019 was a disciplinary meeting, he said that he was not given notice of the purpose of the meeting beforehand, he was not informed of allegations against him prior to the meeting and he was not advised to bring a representative. All of which he contends were required by the Respondent’s disciplinary procedures. He also denied receiving minutes of the meeting. Furthermore, he was not subjected to any form of disciplinary sanction as a result of the meeting, instead he carried on his duties as normal.

The Law

Section 5 of the Act deals with regulation of certain deductions made by employers, the relevant part are as follows:-

Section 5(1) provides:-

• 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.

• 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.

The Act at Section 5 makes it clear that a deduction made by an employer is unlawful except in circumstances where the employee has given his or her prior consent in writing. Subsection (6)(a) of Section 5 of the Act provides, in effect, that where the total amount of wages properly payable to an employee is not paid, the deficiency or non-payment is to be regarded as a deduction.

InDunnes Stores (Cornelscourt) v Lacey and Nuala O’Brien[2005] IEHC 417, unreported Finnegan P., the High Court found that in determining claims under the legislation, the central consideration is whether or not the remuneration in question was ‘properly payable’ to the claimant.

The Court must first decide whether the claimed unlawful deductions were in fact properly payable to the Complainant.

Having considered the submissions of both parties and having examined the Respondent’s Disciplinary Procedure furnished to the Court, the Court notes Clause 2.1 of the procedure states as follows:-

• “The Company will attempt to resolve any complaint in an informal manner by way of private discussion between the employee and his/her immediate supervisor. However, where such discussion fails to adequately resolve the issue or where the matter is deemed as gross misconduct, the Company’s disciplinary procedure will be invoked.”
  
  Clause 2.3 states:-
  
  At every state in the procedure the employee will be furnished with details of the allegation(s) or complainant(s) against him or her and will be given the opportunity to respond fully to such allegations(s) or complaints(s) before any decision is taken.
  
  Where considered necessary by the Company, details of the allegation(s) or complaint(s), including witness statements, may be provided in writing to the employee in advance of any disciplinary meeting.”
  
  Clause 2.4 states:
  • “At all stages the employee will have the right to be accompanied during any disciplinary meetings by a fellow employee or a representative of his/her trade union (if any) or other employee representative.”

Determination

The Court is satisfied that the Respondent contravened the Act in respect to the Complainant. The Respondent is directed to compensate the Complainant for that breach in the sum of €6,300.

Therefore, the Respondent’s appeal is disallowed, and the decision of the Adjudication Officer is affirmed.

The Court so Determines.

	Signed on behalf of the Labour Court
	Caroline Jenkinson
CR	______________________
23 December, 2020	Deputy Chairman