ADJ-00026754

Complainant

Respondent

Anonymised Parties

Former Civil Servant

Government Department

Representatives

Self

Chief State Solicitor's Office

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-00033305-001

11/12/2019

Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991

CA-00033305-002

30/01/2020

The Complainant is a retired Civil Servant.

The Respondent asserts that the Complainant was overpaid for a short period during his employment and that the overpayment was correctly deducted from his pension lump sum and his final salary payment.

The Complainant disputes the Respondent’s position and has submitted two complaints under the Payment of Wages Act, 1991 – (i) that the Respondent made an unlawful deduction from his wages and (ii) that the Respondent paid him less than the amount due to him.

The following is a summary of the Complainant’s submission:

The Complainant submits that from 25th February 2019 until 14th June 2019 he was correctly on full pay. The Complainant denies that he was overpaid during this period.

The Complainant submits that the Respondent made unlawful deductions from his statutory pension lump sum and from his final statutory pay in breach of clear exceptions which exist in law or under various principles of employment law.

The Complainant submits that the Respondent deducted a gross total of €8,866.30 from his statutory entitlements – €6,702.60 from his pension lump sum and €2,163.70 from his final pay.

The Complainant submits that the Respondent sought his consent to make the deductions but that no consent was given by him. Furthermore, the Complainant submits that, prior to his retirement, the Respondent accepted that exceptional and hardship grounds existed, such that deductions were not made from his salary.

The Complainant submits that Department of Public Enterprise and Reform (DPER) Circular 07/2018, which sets out the administrative arrangements for the repayment of overpayments made to serving and former Civil Servants, states, inter alia, that overpayments are ‘recoverable in principle’. The Complainant contends that this means that that overpayments are generally, but not always recoverable.

The Complainant contends that the overpayment in his case should not be recovered as it arose due to the Respondent’s gross negligence; that a legitimate expectation of payment had been created; that he had validly expended the disputed payment; that he no longer had access to the disputed payment; that exceptional circumstances existed in relation to his previous employment history; that extenuating grounds of hardship existed in his case; that the cost of litigation was a waste of taxpayers’ money and that Circular 07/2018 does not conform with Generally Accepted Accounting Practices in regard to the write-off of employee bad debts.

The Complainant also seeks that the WRC makes certain orders in relation to DPER Circular 07/2018.

The following is a summary of the Respondent’s submission:

The Complainant had been absent from work and, in mid-March 2018, was placed on the Temporary Rehabilitation Remuneration (TRR) rate of pay, which is less than full pay.   In mid-November 2018, the Complainant submitted a fitness to work certificate signed by his GP. The Respondent sought advice from the Chief Medical Officer (CMO). Pending receipt of advice from the CMO, the Complainant was restored to full pay on 21st November 2019 but did not return to work.

The Complainant was assessed by the CMO on 21st February 2019 and deemed fit to return to work. However, the Complainant did not return to work. The Complainant then submitted a cert from his GP to PeoplePoint (Civil Service shared HR) to certify that he was unfit to return to work.

The Respondent instructed PeoplePoint that, on receipt of a cert from the Complainant, he was to be placed back on the TRR rate of pay.

On 25th February 2019, the Respondent wrote to the National Shared Services Offices (NSSO), which manages payroll matters on behalf of the Respondent, to ask it to review the Complainant’s pay as a matter of priority to ensure that no overpayment had occurred. The Respondent took no further action at that time, as it had an expectation that the NSSO would act on its instruction. Despite the Respondent’s instruction to the NSSO to the contrary, the Complainant erroneously remained on full pay from 25th February 2019 until 14th June 2019.

The Respondent submits that on 14th June 2019, the NSSO wrote to the Complainant to inform him that he had been overpaid from 25th February 2019 until 14th June 2019. On foot of this correspondence, the Complainant wrote to the Respondent to dispute the NSSO’s position and to request that he be permitted to remain on full pay until his retirement which was likely to occur in late 2019.

The Respondent submits that on 12th July 2019, the National Shared Services Offices (NSSO) wrote again to the Complainant to advise him that monies had been overpaid to him to the value of €8,866.30 gross. The NSSO outlined a number of possible repayment options to the Complainant.

The repayment plan never came into play as the Complainant submitted documentation and information to show that repayment would cause him hardship. On 23rd August 2019, the Respondent wrote to the Complainant to confirm that no deductions would be made until further notice.

The Respondent disputes the Complainant’s assertion that DPER Circular 07/2018 gives Department’s discretion as to whether recoupment of an overpayment of salary should be sought in all instances and quotes paragraph 1.4 in support of its position which states that:

“Departments and Offices are under an obligation to seek to recover the amount of the overpayment and to correct the mistake in the disbursement of public monies, subject to relevant procedures and practices in Government accounting. Staff members/former staff members/pensioners have a reciprocal right to repay.”

The Respondent asserts that all overpayments are pursued.

Recoupment on Retirement

The Complainant retired on 1st November 2019.

The Respondent submits that where an overpayment of salary is still outstanding on retirement, paragraph 4.1 and 4.2 of DPER Circular 07/2018 provides that the overpayment can be recouped from monies due on retirement as follows:

“4.1 Where a staff member is due to leave employment with the civil service (including on retirement …) a higher rate of deduction will be applied to completely discharge the overpayment in advance of his or her departure, if possible.

4.2 Should any higher rate of deduction prior to leaving employment not be sufficient to fully discharge the overpayment, the staff member/former staff member/pensioner will be notified by PeoplePoint of the amount outstanding and this amount will be recouped from any retirement lump sum, pension payment, allowance, death in service (or other) gratuity or any other monies, including any other entitlements under the Superannuation Acts, due to the staff member/former staff member/pensioner.”

On 31st October 2019, the Respondent emailed the Complainant to advise him that non statutory annual leave accrued by him had been offset against his overpayment and, accordingly, the amount overpaid was being reduced by €2,163.63. The Respondent noted that the value of accrued statutory leave exceeded the value of the overpayment and sought the Complainant’s consent to offset the accrued statutory leave against the remaining overpayment.

At 9.49 a.m. on 1st November 2019, the Respondent emailed the Complainant again to advise him that as he was due to retire that day, “in the absence of his consent to offset statutory leave or a firm arrangement in respect of future recoupment of the outstanding overpayment, the outstanding overpayment would be recouped from his pension entitlements”.

The Respondent sought a decision on the matter from the Complainant by 1pm on that date.

The Complainant responded at 11.27am on the same day to confirm that “for the avoidance of doubt, to repeat there is no consent from me allowing my employer to take any unilateral actions”.

Jurisdiction

Section 1 of the Payment of Wages Act, 1991 provides the following definition of wages:

“ “wages”, in relation to an employee, means any sums payable to the employee by the employer in connection with his employment, including—

(a) any fee, bonus or commission, or any holiday, sick or maternity pay, or any other emolument, referable to his employment, whether payable under his contract of employment or otherwise, and

(b) any sum payable to the employee upon the termination by the employer of his contract of employment without his having given to the employee the appropriate prior notice of the termination, being a sum paid in lieu of the giving of such notice: Provided however that the following payments shall not be regarded as wages for the purposes of this definition:

(i) any payment in respect of expenses incurred by the employee in carrying out his employment,

(ii) any payment by way of a pension, allowance or gratuity in connection with the death, or the retirement or resignation from his employment, of the employee or as compensation for loss of office,

…”

Pursuant to the above provision, I find that I do not have the jurisdiction to investigate the deduction the Respondent made from the Complainant’s pension lump sum.

Furthermore, I am of view that I do not have the jurisdiction, under the Payment of Wages Act, 1991, to make any findings regarding the consistency or clarity of Department of Public Enterprise and Reform (DPER) Circular 07/2018.

The matter for me to decide, therefore, is whether or not the deduction which the Respondent made from the Complainant’s final salary was in accordance with section 5 of the Payment of Wages Act, 1991.

Relevant Legislation

Section 5 of the Payment of Wages Act 1991 serves to regulate certain deductions made and payments received by employers.   Sections 5(1), (2), (3) and (4) of the Act places a number of restrictions on employers in relation to such deductions or payments with regard to the authority for making the deduction, the fairness and reasonableness of the deduction and the manner in which the deduction is to be notified to the employee.

Section 5(5) of the Act, however, provides that nothing in the preceding sections shall apply to the following :

“( a) a deduction made by an employer from the wages of an employee, or any payment received from an employee by an employer, where—

(i) the purpose of the deduction or payment is the reimbursement of the employer in respect of—

(I) any overpayment of wages, or

(II) any overpayment in respect of expenses incurred by the employee in carrying out his employment,

made (for any reason) by the employer to the employee, and

(ii) the amount of the deduction or payment does not exceed the amount of the overpayment,”

Effectively, section 5(5) provides that an employer may make a deduction from the wages of an employee where the purpose of the deduction is the repayment to the employer of the overpayment of wages to an employee without any regard to the restrictions set out in sections 5(1), (2), (3) and (4) of the Act.

From the documentary and oral evidence adduced at the hearing, I accept that the Complainant was overpaid by the Respondent for a period of approximately 3.5 months from 25th February 2019 until 14th June 2019.

I find that the actions of the Respondent in the herein case comply with the provisions of section 5(5) of the Payment of Wages Act 1991 with regard to the recoupment of an overpayment of wages.

Accordingly, I find that this complaint is not well founded.

CA-00033305-001

I find that this complaint is not well founded.

CA-00033305-002

I find that this complaint is not well founded.

Deduction by employer – section 5(5)