Complainant

Respondent

Anonymised Parties

An Accountant

A Shared Services Company

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-00031769-001

22/10/2019

The complainant began employment with the respondent on August 28th, 2018.

Prior to this he had been living in the United Kingdom and understood a payment offered to him by the respondent would be a ‘re-location bonus’.

In due course he quit the employment as a result of differences over arrangements for time off in lieu of overtime. He says that his inability to remain in the company and meet the terms of his bonus was therefore not his fault.

He also submits that the terms on which the respondent relies were not included in his statement of Terms and Conditions of Employment.

The respondent then made a deduction from his final salary in respect of the bonus which had been paid. He raised the matter with the respondent in correspondence but to no avail.

The complainant’s package did include a ‘sign-on bonus’ of €5,500.00.

One of the clauses in the conditional offer of employment to him outlined the basis on which this was being paid, as follows.

‘This will be paid to you in your first payroll and will be subject to the normal tax and other statutory deductions. Please note that should you leave the company within certain timeframes the bonus must be refunded on the following basis; within your first year at 100%, within your second year at 75%, within your third year at 50%.

On commencement the complainant was also furnished with a statement of his terms and conditions of employment which included the following.

By signing this Statement, you confirm that the Company may (including on termination of your employment) deduct any sums from time to time owed by you to the company for whatever reason from any payment due to you by the company.

In correspondence with the respondent the complainant has acknowledged that the deduction ‘has been stipulated in the terms of employment’.

The complainant left his employment within twelve months and the bonus was deducted in line with the above provisions (although there was an administrative error in the manner this was effected which was subsequently corrected).

The Payment of Wages Act 1991 provides a number of exceptions allowing deductions to be made from an employee’s wages.

These include, at Section 5 (1) of the Act;

(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.

Given these provisions the respondent has not made an unauthorised deduction as it was provided for in the letter of offer of employment to the complainant and his subsequent conditions of employment.

The complainant did not attend the hearing as he is now resident in Poland he advised that due to the costs of returning for the hearing he could not do so.

However, he actively engaged with the process and agreed that the hearing should proceed on the basis of the documents he had submitted, including a response to the respondent’s submission which had been submitted in advance of the hearing and sent to the complainant.

The respondent did not object to the hearing proceeding and on the basis of all these (somewhat unusual) considerations the hearing went ahead.

It was clear from his original complaint form that the complainant was aggrieved about the circumstances which led to his resignation from the company and this formed a good part of his outline statement of the case. He set out in a degree of detail his view of that particular dispute in relation to overtime.

This contained an implication that because he was not at fault for leaving that this should be a relevant consideration in the case.

In passing the respondent says that the claims made by the complainant in relation to the overtime issue are without merit, but they also submit, (and I must agree) that they have no relevance to the complaint under the Payment of Wages Act, 1991.

The documentation submitted in evidence and referred to above clearly specify the terms on which the bonus was being paid, and more importantly might fall to be re-paid. While it was somewhat imprecisely referred to as a ‘sign on bonus’ in fact it was more in the nature of a fidelity or loyalty payment.

However it may be described, the terms on which it was offered were clearly set out in the letter of offer of employment to the complainant sent to him on July 26th, 2018.

The complainant submitted that the terms related to the bonus were not incorporated in his Statement of Terms etc.

This is not correct.

In fact, the opening paragraph of that Statement of Terms etc document states;

‘This Statement in conjunction with your offer letter, sets out your terms and conditions of employment with the company…’    (Emphasis added)

He consented to those terms, including the bonus repayment terms when he signed the company ‘Statement of Terms and Conditions of Employment’ on August 25th, 2018 and this brings the deduction within the exceptions referred to above in Section 5(1) of the Payment of Wages Act 1991.

The complaint is not well founded and does not succeed.

For the reasons set out above Complaint CA-00031769-001 is not well founded.

Loyalty bonus repayment, Payment of Wages deduction