ADJUDICATION OFFICER DECISION

Adjudication Reference:  ADJ-00027517

Parties:

Complaints:

Date of Adjudication Hearing:  26/01/2021

Workplace Relations Commission Adjudication Officer:  Aideen Collard

Procedure:

These complaints under Section 27 of the Organisation of Working Time Act 1997 were referred to the Workplace Relations Commission (hereinafter ‘WRC’) on 17th March 2020 pursuant to Section 41 of the Workplace Relations Act 2015.  Following delegation to me by the Director General, I inquired into these complaints and gave the Parties an opportunity to be heard and to present any relevant evidence.  I held a remote hearing on 26th January 2021 pursuant to the Civil Law and Criminal Law (Miscellaneous Provisions) Act 2020 and S. I. 359/2020, which designates the WRC as a body empowered to hold remote hearings.  There was consent by both Parties to the remote hearing.  The Complainant was assisted by Marius Marosan and an Interpreter, and the Respondent was unrepresented.  As the evidence is identical in relation to both complaints, I have dealt with them together in terms of the Parties’ positions and findings and conclusions but have made separate decisions.  All evidence, submissions and documentation have been taken into consideration.

Background:

The Complainant had been employed as a Cleaning Supervisor with a company and transferred to the Respondent on 1st August 2019 under TUPE whilst on certified sick-leave owing to ill-health.  She resigned on 16th February 2020 and seeks compensation for an alleged delay in the payment in lieu of outstanding annual leave including public holidays that became due upon cessation.  The Respondent refuted any delay in circumstances where payment was made the following month.

Summary of Complainant’s Case – Complaints CA-00035278-001 & 002:

The Complainant gave evidence confirming the contents of a written submission (including the documentation referred to herein) made on her behalf outlining the circumstances giving rise to these complaints.  It is common-case that the Complainant commenced working for a previous company on 9th September 2012 and was transferred to the Respondent under the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 on 1st August 2019.  An issue with this TUPE transfer was resolved with the assistance of her Representative.  The Complainant had been on certified sick-leave owing to severe medical conditions and had not worked for the prior two year period.  It is common-case that her contractual rate of pay was €11.50 per hour and that she resigned by email to Human Resources (HR) on Sunday 16th February 2020 owing to ill-health stating: “I am emailing to let you know that I am resigning from my position with the company due to ongoing medical issues (described) effective immediately…  Please can you also confirm when I can expect my last payment for my remaining annual leave to be made.”  On 19th February 2020, the Complainant received an e-mail response from the HR Manager advising: “I am so sorry to hear that you have suffered another injury.  I have advised payroll of your resignation and to issue you annual leave, which will be transferred in our next pay run at the end of this month.”  There was no mention of bank details.  On 2nd March 2020, the Complainant sent an email reminder including her bank details and rate of pay stating: “…since this is the first time I am being paid, I just wanted to reconfirm my bank details and rate of pay in order to avoid any possible confusion.” 

As no payment had been forthcoming more than two weeks following her resignation and she had not received any response to her reminder, with a view to resolving the matter amicably, the Complainant’s Representative emailed the Respondent on 10th March 2020 giving five days’ notice for payment before referral to the WRC.  As no payment or response had been received from the Respondent within that period, on 17th March 2020, he referred these complaints to the WRC on her behalf.  The Respondent contacted the Complainant only after these complaints had been referred.  Whilst the payment was processed in the March 2020 pay run and received by 2nd April 2020, a large deduction of taxes was made at the higher band.  It is common-case that the payment due was in lieu of 29 days annual leave including untaken public holidays giving a gross amount of €2,668.00.  The Complainant was paid a net amount of €1,431.72, with deductions totalling €1,236.28.  The payslip was sent to the Complainant under cover of letter dated 25th March 2020.  By email dated 6th April 2020, the Complainant acknowledged receipt of her payslip and letter and queried the amount of deductions and tax band applied.  She also pointed out an error in her e-mail address used for her by the Respondent and the fact that she had already emailed confirming her correct bank details.  By email on the same date from the HR Manager, she was informed: “Unfortunately, I cannot comment on your Tax situation as I would have no direct dealings with this matter.  I would suggest contacting the Tax Office who can explain this better.  I did think it strange that I did not receive a reply from my emails, however I did not receive any  bounce back from the email, therefore a written letter was sent.”  The Complainant regarded this to be a dismissive response.  Upon querying the matter with the Revenue Commissioners, she was shocked to learn that the deductions were not showing up as being paid on her behalf.  It was not until July 2020 that the situation was resolved after numerous queries from her Representative and her records updated so that she could receive a tax credit/rebate.  There is no reasonable explanation as to why the Respondent treated the Complainant as being on the higher tax band and why payment was processed only after referral of these complaints.  Payment was also delayed with the knowledge that she had severe health difficulties at the time and the monies were required for payment towards various doctors. 

The relevant provisions of the Organisation of Working Time Act 1997 which implemented the EU Working Time Directive (93/104/EC) were outlined.  Briefly, Section 19 sets out the requirements in relation to annual leave entitlements.  Section 21 sets of the requirements in relation to public holiday entitlements which include a day’s annual leave in lieu where a public holiday cannot be taken at the time.  Both of these entitlements accrue during certified sick leave.  Section 23 provides that payment in lieu of accrued annual leave becomes payable upon cessation of employment. 

The Complainant does not take any issue with the calculation of the sums due in respect of her accrued annual leave including public holidays.  It is also accepted that the sums due have been paid in full and any tax issues have since been resolved.  However, these complaints were still being pursued and compensation was sought on the basis that the Respondent had delayed in making payment and thus had contravened the 1997 Act.  This had caused hardship to the Complainant at a time when she was in ill-health and had required the monies for medical treatment.  The Respondent had not responded to requests for payment which would have avoided referral to the WRC.  When the Respondent’s position was put to the Complainant, she maintained her position.

In relation to the Complainant’s entitlement to compensation, reliance was placed upon a number of cases concerning complaints under the 1997 Act.  In Malecka & Krawczyk -v- Family Bakery Samo Zdrowie, DWT1584 / DWT1585, the Labour Court concluded that "the Court has taken account of the extent to which the Act was contravened and the particularly serious nature of those contraventions."  The Court also relied on Feeney -v- Milagros Baquiran [2004] 15 E.L.R. 304 where it was stated that "the provisions of the Act, and of the Directive on which it is based, are health and safety imperatives."  In the well-known case of Von Colson and Kamann (1984) ECR 1891, the CJEU made it clear that where a right which is derived from EU law is infringed the sanction for breaches must be effective, proportionate and dissuasive and must provide a real deterrent against future infractions as confirmed by the Labour Court in C & F Tooling Limited -v- Cunniffe, DWT15125.  Section 19 of the 1997 Act implements Article 7 of the EU Directive.  In Royal Liver Assurance -v- Macken (2002) 4 I.R. 427, Lavin J. held that entitlement under Section 19 of the 1997 Act was a fundamental right.  This decision is often quoted by the Labour Court when applying to other Directive provisions and in numerous cases, it has held that the Von Colson and Kamann principle applies and that a breach of the Directive amounts to a breach of a fundamental social right.  In Lemanski -v- Rutledge Recruitment and Training Ltd, DWT 15102, the Labour Court awarded €3000 in compensation for breaches of Sections 19 and 23 of the 1997 Act and in Nulty -v- Blackrock Leisure Ltd, DWT1920, awarded €1800 in compensation for breach of Section 21 of the1997 Act.

Summary of Respondent’s Case - Complaints CA-00035278-001 & 002:

The Managing Director and HR Manager gave evidence confirming the Respondent’s position and supplementing a written submission.  It was confirmed that the Complainant had been transferred along with a number of other employees to the Respondent under the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 on 1st August 2019 whilst on certified sick leave.  There was no issue regarding the accrual of annual leave whilst on certified sick leave and this was communicated to the Complainant in an email dated 28th January 2020 in response to a routine query from her when certifying her leave.  The Complainant had resigned by email of 16th February 2020 as acknowledged.  As the Respondent had never previously had to make a payment to the Complainant, the HR Manager emailed her on 26th February 2020 with a reminder on 10th March 2020 to ascertain whether her bank details supplied in August 2019 were still active.  Following receipt of these complaints from the WRC on 20th March 2020, the HR Manager wrote again to the Complainant on 25th March 2020 confirming that she had not received any response to her emails, expressing surprise at referral of these complaints, confirming that payment (for 20 days annual leave totalling €1840 and 9 bank holidays totalling €828) would be paid to her account on 1st April 2020 and enclosing a payslip setting out the breakdown.  Although no response to her request for confirmation of bank details was received from the Complainant, payment was successfully made by 2nd April 2020 using the bank details previously furnished as per bank transfer record furnished. 

No further communication from the Complainant had been received by the Respondent until her email of 6th April 2020 querying the amount of tax deductions from the payment as outlined above.  This query was addressed by advising the Complainant that she would need to contact the Tax Office.  This email was included in a thread that included the email of 2nd March 2020 from the Complainant but did not include any email address showing to whom it had been sent.  In addition to the obvious communication issues with the Complainant, it was also confirmed that the alleged delay covered the period when business was closed down by the Covid-19 pandemic and administrative staff were working remotely from home.  Regarding the tax deductions and apparent delay in showing up on Revenue records, the Managing Director outlined the automated process and confirmed compliance with same.  It is set up such that any tax deductions made in respect of employees are debited the following month.  Regarding the taxing of the Complainant at the higher tax band, he stated that deductions are made based upon Revenue records which the Respondent had no control over.  As the Respondent had availed of the Employment Wage Subsidy Scheme (EWSS), a scheme to assist with the payment of wages during the pandemic, he surmised that this may have entailed employees automatically being taxed at the higher rate and have accounted for any delay in the deductions paid to Revenue showing up on the Complainant’s record.  The Respondent would have resolved this matter on behalf of the Complainant if it had been possible.

Under questioning from the Complainant’s Representative, it was accepted that the emails requesting payment could have been sent but may not have filtered through to Payroll.  Whilst it was also accepted her bank details supplied in August 2019 had been correct, the Respondent had wanted to confirm same before processing payment.  None of the other evidence was contested.

Overall, it was submitted that all sums due under the 1997 Act had been paid in a timely manner and within a reasonable period of the Complainant’s resignation given that no response to requests for confirmation of bank details had been received and the prevailing circumstances.  The Respondent was unable to comprehend the basis upon which these complaints were still being pursued.

Findings and Conclusions – Complaints CA-00035278-001 & 002:

It is not in issue that the sums due to the Complainant in lieu of outstanding annual leave including public holidays were properly calculated and paid.  It is therefore unnecessary to set out Sections 19 and 21 of the Organisation of the Working Time Act 1997 providing for same.  The only issue in contention is whether there has been a delay in payment such that would merit an award of compensation under Section 27(3) which provides for awards of up to two years remuneration for breach/es of the Act.  Section 23(1) provides that payment in lieu becomes payable upon the cessation of employment as follows: “(a) Where- (i) an employee ceases to be employed, and (ii) the whole or any portion of the annual leave in respect of the relevant period remains to be granted to the employee, the employee shall, as compensation for the loss of that annual leave, be paid by his or her employer an amount equal to the pay, calculated at the normal weekly rate or, as the case may be, at a rate proportionate to the normal weekly rate, that he or she would have received had he or she been granted that annual leave.”  Paymenttherefore becomes due within the next payment run in accordance with an employee’s contract.  Whilst no specific evidence was adduced by either Party, it was not in issue that payment of wages was made on a monthly basis by direct debit.  Having weighed up the evidence, on the balance of probabilities I am satisfied that the Respondent discharged payment to the Complainant within a reasonable period and no such delay arises such that would merit payment of compensation under the caselaw cited above for the following reasons:

(1)  The Complainant resigned on Sunday 16th February 2020 and received payment in lieu of her outstanding annual leave including public holidays from the Respondent in the following month’s payment run processed on 31st March 2020.  Given that she had not provided any notice of her resignation to the Respondent (noting a minimum statutory requirement of one week’s notice under Section 6 of the Minimum Notice and Terms of Employment Act 1973), aside from any other issue, it would have been wholly unrealistic and unreasonable to expect payment within that month’s run.

(2)  In circumstances where the Complainant had transferred on certified sick leave to the Respondent under TUPE and this was the first payment being made to her, it was wholly reasonable and an exercise in due diligence for the Respondent to confirm that her bank details were correct.

(3)  Given that the relevant period covering the alleged delay included a national health crisis and lockdown owing to the Covid-19 pandemic and staff were working remotely from home, some latitude should have been reasonably afforded to the Respondent.  It is also quite likely that as a consequence, emails from both sides went astray and nothing turns on this issue in any event.

(4)  I find the Respondent’s position that it did not have any control over the applicable tax band and thus tax deductions made from the payment to the Complainant and had made immediate payment via the automated system as being credible in the absence of any evidence to the contrary.  This is borne out by the fact that the Complainant successfully resolved this issue directly with Revenue.  Accordingly, the Respondent cannot be held to be liable in relation to any delay regarding same.

(5)  The facts in the instant case are in no way comparable to the facts in the caselaw cited where compensation had been awarded for multiple, persistent and/or serious failures by the employers to discharge their employees’ statutory entitlements under the Organisation of Working Time Act 1997.

(6)  The referral of these complaints to the WRC on 17th March 2020, a month after the Complainant resigned without allowing the Respondent a reasonable period to discharge payment given the prevailing circumstances was in my view precipitous to say the least.  The continued pursuit of these complaints after payment had been made shortly thereafter is bordering on frivolous and vexatious. 

Decision - CA-00035278-001 – Non-payment of Annual Leave

Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint.  Based upon the aforesaid reasoning, I find this complaint not to be well-founded.

Decision - CA-00035278-002 – Non-payment of Public Holiday Pay

Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint.  Based upon the aforesaid reasoning, I find this complaint not to be well-founded.

Dated:   26/04/2021

Workplace Relations Commission Adjudication Officer:  Aideen Collard

Key Words:  Sections 19, 21, 23 and 27 of the Organisation of Working Time Act 1997