PWD204

This is an appeal on behalf of Cityjet DAC (‘the Respondent’) from a decision of an Adjudication Officer (ADJ-00016521, dated 22 August 2019) under the Payment of Wages Act 1991 (“the Act”). The Notice of Appeal was received on 2 October 2019. The Court heard the appeal in Dublin on 7 January 2020.

The issue before the Court concerns a deduction made by the Respondent from Mr David Ryan’s (“the Complainant”) final salary payment in 2018, following his resignation which had been notified to the Respondent in June 2018. The salary deduction was in the amount of €3,431.62 and was in respect of what the Respondent had calculated to be the balance of a written training bond that the Parties had entered into in September 2016. The claim under the Act succeeded at first instance. The Adjudication Officer directed repayment of the aforementioned deduction and – in excess of her jurisdiction under the Act – also awarded two weeks’ compensation in the amount of €1,583.82.

The Relevant Contractual Provisions

In 2016, the Complainant’s base was in London. In or around May 2016, the Respondent introduced a new aircraft – the SSJ- to its fleet. The Complainant was one of a number of recently qualified pilots who were required to undertake training on the SSJ. He entered into a written training bond to the value of €10,000.00 in respect of that training. The written Bond Agreement is dated 7 September 2016 and it provides, inter alia, for a pro-rata formula for reimbursement to the Respondent of the cost of the training should the Complainant leave the Respondent’s employment within three years of the date of the completion of the training.

Clause 4.1 of the agreement provides:

• “No variation of this Agreement will be effective unless it is in writing and signed by the Parties.”

• “This Agreement constitutes the entire agreement between the Parties with respect to its subject matter and no correspondence or representation (written or verbal) entered into or which took place before the date of this Agreement shall be of any effect unless specifically referred to in this Agreement or provided by subsequent procedures which are envisaged or contemplated by this Agreement.”

• “The Company is authorised to deduct from salary/monies due to you any monies owed by the employee as a result of any overpayments including but not limited to: unauthorised/overpaid business expenses; overpayment of salary; overpayment of holiday or sick pay; failure to return Company property (uniforms, ids, manuals etc) on termination of contract. If appropriate, the amount of the deduction and repayment schedule will be agreed in advance between the company and the employee.”

The Complainant’s Submissions

The Complainant accepts that he entered into both the Bond Agreement, dated 7 September 2016, and the revised contract of employment, dated 14 October 2016. He submits that the fact that he received a P45 on the termination of his previous contract of employment in the United Kingdom and entered into a new contract of employment made under Irish law in October 2016 had the effect of setting aside the earlier Bond Agreement. The Complainant has not disputed the application of the formula for calculating the amount of the training costs provided for in the Bond Agreement to his particular circumstances.

The Respondent relies, in particular, on Clause 4.1 of the Bond Agreement and submits that the Complainant’s employment contract of 14 October 2016 does not provide for a written variation of the Bond Agreement and that, therefore, that Agreement continued to apply with the result that the deduction made by the Respondent from the Complainant’s final salary in August 2018 was lawfully made pursuant to Clause 7.1 of the Complainant’s, then extant, employment contract. The Respondent further submits – and this is not disputed by the Complainant – that the Complainant, having been notified in writing, after he tendered his resignation, of the amount of the repayment due from him, agreed in writing to have that amount deducted from his final salary payment in August 2018.

Discussion and Decision

In determining whether the deduction made by the Respondent from the Complainant’s salary in August 2018 was lawful or not, the Court must first have regard to the question of whether or not the employment contract the Parties entered into in October 2016 expressly varied the pre-existing Bond Agreement. The latter – as previously noted – expressly provides that it can only be varied by the Parties to it in writing “signed by the Parties”. Having carefully considered the employment contract dated 14 October 2016, the Court finds that it contains no express variation of the Bond Agreement. It follows that the Bond Agreement, in the absence of any express variation thereof in writing and signed by the Parties continued in being for the duration, as it happens, of the Complainant’s employment with the Respondent.

Section 5(2) of the Act provides:

(2) An employer shall not make a deduction from the wages of an employee in respect of—

• (a) any act or omission of the employee, or

  ( b) any goods or services supplied to or provided for the employee by the employer the supply or provision of which is necessary to the employment,

• (i) the deduction is required or authorised to be made by virtue of a term (whether expressor implied and, if express, whether oral or in writing) of the contract of employment made between the employer and the employee, and

  (ii) the deduction is of an amount that is fair and reasonable having regard to all the circumstances (including the amount of the wages of the employee), and

  (iii) before the time of the act or omission or the provision of the goods or services, the employee has been furnished with—

  • (I) in case the term referred to in subparagraph (i) is in writing, a copy thereof,

    (II) in any other case, notice in writing of the existence and effect of the term,

  and

  (iv) in case the deduction is in respect of an act or omission of the employee, the employee has been furnished, at least one week before the making of the deduction, with particulars in writing of the act or omission and the amount of the deduction, and

  (v) in case the deduction is in respect of compensation for loss or damage sustained by the employer as a result of an act or omission of the employee, the deduction is of an amount not exceeding the amount of the loss or the cost of the damage, and

  (vi) in case the deduction is in respect of goods or services supplied or provided as aforesaid, the deduction is of an amount not exceeding the cost to the employer of the goods or services, and

  (vii) the deduction or, if the total amount payable to the employer by the employee in respect of the act or omission or the goods or services is to be so paid by means of more than one deduction from the wages of the employee, the first such deduction is made not later than 6 months after the act or omission becomes known to the employer or, as the case may be, after the provision of the goods or services.

Having carefully reviewed the contractual documents before it and having considered the Parties’ submissions, the Court finds that the deduction made by the Respondent from the Complainant’s final salary in August 2018 complies with the requirements of section 5(2) of the Act: the deduction was authorised by the Complainant’s written contract of employment and it was fair and proportionate having regard to the express terms of the Bond Agreement and the Parties dealings between the date the Complainant tendered his resignation and the date that the resignation took effect.

The Court, accordingly, and for the reasons stated, sets aside the decision of the Adjudication Officer.

The appeal succeeds.

The Court so determines.

Signed on behalf of the Labour Court



Alan Haugh
CO'R______________________
22 January 2020Deputy Chairman



NOTE

Enquiries concerning this Determination should be addressed to Clodagh O'Reilly, Court Secretary.