Complainant

Respondent

Anonymised Parties

Manager

Telecommunications Company

Representatives

Self

Reidy Associates Solicitors

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-00033252-001

18/12/2019

Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994

CA-00033252-002

18/12/2019

The Complainant has been employed by the Respondent since 21st August 2006. With effect from 26th November 2019, the Complainant was placed on lay-off along with one of her colleagues.   All other staff of the Respondent company were made redundant on 8th November 2019.

The Complainant has submitted complaints under the Payment of Wages Act, 1991 and the Terms of Employment (Information) Act, 1994.

The Complainant submits that she did not get paid in either October or November 2019.

In addition, the Complainant contends that the Respondent stopped paying her VHI and pension contributions in October 2019 without her consent.

The Complainant further submits that her USC and Local Property Tax have not been calculated correctly.

The Respondent submits that the Complainant has been paid all wages that were due to her.

The Respondent submits that it facilitated the deduction of the Complainant’s VHI subscription but did not pay it.

The Respondent submits that there was no company pension scheme in place and that a previous pension scheme had ceased in 2012.

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, pension related payments are excluded from the provisions of the Payment of Wages Act, 1991. However, the Labour Court found in Tourism Ireland v Farrelly PWD 43/2016 that “a pension deduction is not a payment by way of a pension within the meaning of the Act …. The Court finds that the impugned deduction is a matter that falls to be dealt with under section 5 of the Act and is therefore properly before it for decision.”

I find, therefore, that I have the jurisdiction to make findings in relation to the Complainant’s claim concerning the alleged non-payment of her pension contribution.

I am of view, however, that I do not have the jurisdiction, under the Payment of Wages Act, 1991, to make any findings with regard to taxation matters such as USC or Local Property Tax.

The matter for me to decide, therefore, is whether the Respondent has properly paid the Complainant in accordance with section 5 of the Payment of Wages Act, 1991.

Relevant Legislation

The relevant sections of the Payment of Wages Act are sections 5(1) which prohibits an employer from making a deduction from the wages of an employee unless certain conditions are fulfilled and section 5(6) which provides that the non-payment of wages which are properly payable to an employee by an employer shall be treated as a deduction unless it was due to a computational error. I have included the relevant sections of the Act below.

Section 5 (1) of the Payment of Wages Act, 1991 provides that –

“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.”

Section 5(6) of the Act provides that 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 employerfrom the wages of the employee on the occasion.”

Findings

The Complainant has raised a number of issues in her complaint –(i) that she was not paid in full for October and November 2019 and (ii) that the Respondent did not make a payment in respect of her VHI or pension in October or November 2019.

At the hearing, the Complainant was unable to substantiate her complaint that she had not been paid in full for October and November 2019. I find, therefore, that this element of the herein complaint is not well founded.

I note that the Respondent refutes the Complainant’s claims in relation to the non-payment of her VHI contribution. According to the Respondent, the Complainant paid her own VHI contribution – the Respondent simply facilitated the salary deduction.

I note that the Complainant’s contract of employment, which she signed when she joined the Respondent company in 2006, does not include any provision in relation to private health insurance. In the absence of any cogent evidence to the contrary from the Complainant, I accept the Respondent’s version of events and find that this element of the herein complaint is not well founded.

In relation to the Complainant’s pension, I note the Respondent’s position that there was no company pension scheme in place in October or November 2019. The Complainant rejects the Respondent’s contention and argues that there was a company pension scheme in place to which the Respondent made monthly contributions. In the absence of any cogent evidence from the Complainant to support her position, I find that this element of the herein complaint is not well founded.

I find that this complaint, in its entirety, is not well founded.

The Complainant submits that the Respondent removed her as a Director of the Respondent company on 1st October 2019.

The Complainant also submits that the Respondent redirected all emails coming into the company from external email addresses to an alternative server so that it could view all communication. The Complainant further submits that the Respondent removed her from all the IT systems in October 2019 with the result that she was unable to do any work.

The Complainant submits that the Respondent put her on lay-off on 26th November 2019 even though it was not provided for in her contract of employment or in the company handbook. The Complainant contends that lay-off was not customary in the Respondent company nor had it ever done before.

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

The Respondent submits that the Complainant is a shareholder of the Respondent’s Irish business.

The Respondent submits that the directors of the Respondent company, who are based in the UK, had some concerns in relation to the operation of the Respondent’s Irish business which was being run by the Complainant and another shareholder who were executive directors.

The Respondent submits that it appeared, from a review of the accounts, that the Irish business was not performing well and that this led to reduced profits over the years 2014-2019. During this period, the relationship between the executive directors and the Respondent deteriorated.

The Respondent submits that in 2017 it was not given access to the end of year accounts or any financial details to check the financial status of the Irish company.

The Respondent submits that there was sporadic communication over the next 12-18 months and in April 2019, the Respondent received a letter from the executive directors which included a proposal to buy the Respondent out of its shareholding.

On 7th May 2019, a two hour meeting between the Respondent and the executive directors took place. At that meeting, it was agreed that the Respondent would now look at the possibility of purchasing the executive directors’ shareholding.

On a later date in May 2019, the Respondent was obliged to sign a non-disclosure agreement to look at the accounts of the Respondent’s Irish operation. This occurred in a hotel lobby and lasted for one hour.   The Respondent submits that it was not given access to bank accounts, servers or the office premises. The Respondent was then asked to sign the company’s accounts for 2018.

The Respondent submits that at a shareholders meeting in June 2019, the Complainant and the other shareholder refused to work any longer with the Respondent.

On 19th July 2019, the Respondent’s Irish bank emailed the Respondent to confirm that its access to online banking had been blocked. The bank suggested that the Respondent contact the executive directors to resolve the issue. Subsequently, on 21st July 2019, the Respondent was contacted by the bank to advise that unless the ongoing dispute between the board members was resolved, the bank may have to close the Respondent’s bank accounts. This would effectively mean that the ongoing business of the Respondent in Ireland would be shut down. The Respondent did not get access to its Irish bank accounts until late October 2019 when the directorship of the company changed.

On 1st October 2019, the Complainant ceased to be a director of the Respondent’s Irish operation but remained a majority shareholder. The Respondent submits that under the Shareholders’ Agreement/Memorandum and Articles of Association, the Respondent has the right to appoint the directors of the Respondent company.

The relationship between the parties further deteriorated which led to a number of incidents occurring in October 2019 including: the Respondent being denied access to the Respondent’s office premises in Ireland; the restriction of communication from the Respondent to all members of staff; the cancellation of the company credit card due to unauthorised cash withdrawals; an unauthorised transfer from the Respondent’s bank account to a firm of solicitors which was acting for the Complainant and the other shareholder and a further unauthorised transfer of €50,000 from the Respondent’s bank accounts.

Relevant Legislation

Section 3 of the Terms of Employment (Information) Act, 1994 sets out an exhaustive list of the terms of employment that must be contained in the statement furnished pursuant to subsection (1) of that section.

Section 3(1)(d) of the Act provides that the statement must provide “the title of the job or the nature of the work for which the employee is employed”.

Section 5(1) of the Act provides that where a change occurs in any of the terms notified under section 3, the employee must be notified of the changes within one month after they take effect.

Findings

I will examine each element of the Complainant’s claim under the Terms of Employment (Information) Act, 1994 in turn.

Removal as a Director

From the evidence adduced at the hearing, it appears that the Complainant held a substantive job with the Respondent company and also held a directorship with the company, independently of her main job.

A directorship is an office created by the memo and articles of association of the company and is not created by a contract of employment. I find, therefore, that this element of the Complainant’s case falls outside the remit of the Terms of Employment (Information) Act, 1994 and, accordingly, is not well founded.

Removal from IT Systems

It is apparent, from both the documentary and oral evidence adduced, that the relationship between the Complainant and the Respondent had completely broken down by the end of October 2019. I am of the view that, in light of the breakdown of the parties’ relationship, the removal of the Complainant’s access to the Respondent’s IT systems cannot be viewed in isolation as a change in her terms and conditions but must be viewed in the much broader context of the totality of the events that occurred around the same time.

I find, therefore, that this element of the complaint is not well founded.

Lay-off

Lay-off is provided for by section 11 of the Redundancy Payments Act, 1967. The notification requirements for lay-off are also provided for by that section. There is no provision in the Terms of Employment (Information) Act, 1974 relating to lay-off. I find, therefore, that this element of the Complainant’s case is not well founded.

I find that this complaint is not well founded.

Payment of Wages – Terms and Conditions of Employment