FULL RECOMMENDATION
SECTION 7(1), PAYMENT OF WAGES ACT, 1991 PARTIES : DEPT OF EMPLOYMENT AFFAIRS AND SOCIAL PROTECTION (REPRESENTED BY SARAH-JANE HILLARY, INSTRUCTED BY CHIEF STATE SOLICITORS OFFICE) - AND - PASCAL HOSFORD DIVISION :
SUBJECT: 1.Appeal of Adjudication Officer Decision No. ADJ-00026754. This is an appeal by Pascal Hosford (the Complainant) against an Adjudication Officer’s Decision ADJ-00026754 given under the Payment of Wages Act 1991(the Act) in a claim that his employer the Department of Employment Affairs and Social Protection (the Respondent) made an unlawful deduction from his wages when they made a deduction from his pension lump sum and his final salary. The Complainant was employed in a managerial role by the Respondent from in and around October 2013 until 1st November 2019 when his employment ended. The Complainant lodged his complaints with the WRC on the 11th December 2019 and the 30th January 2020. It is the Respondent’s submission that the Complainant had an outstanding overpayment at the time his employment ended and that same was deducted from his pension lumpsum and an element of it was set against non-statutory annual leave that he had accrued. The appeal was heard by the Labour Court in a virtual Court Room on 16 March 2021 in accordance with Section 44 of the Workplace Relations Act, 2015. The following is the Court's Determination:
1) that the Chair should recuse herself as she had been involved in a previous case that the Complainant had taken. 2) The Court should inform parties in advance of the hearing and not just on the morning of the hearing who the division will be and 3) the Complainant wanted the Court to take the submissions as read so he could focus on cross examination. In addressing those three issues the Court noted that the Complainant had written to the Chairman in respect of issue 1 and 2 and had received a written response from the Chairman on those issue in advance of the hearing. In relation to issue number three it was a matter for the Respondent as to whether or not they seek to put a witness into evidence. Therefore, the issue of cross examination may not arise. The Court proceeded to hear submissions, Summary of Complainant’s submission. The Complainant submits that during the period 25th February 2019 to 14th June 2019 he was correctly on full pay although he was absent form work on certified sick leave. It was his submission that the Respondent only became aware of this when he mentioned it at a Labour Court hearing in respect of a different issue. it is his submission that the deduction by the Respondent of €6,702.60 from his pension lump sum and €2,163.70 being the value of non-statutory leave that the Respondent had set against the alleged under payment was a breach of the Act. The Respondent had sought his permission to offset his statutory annual leave against the overpayment, but he had not agreed to same. It is the Complainant’s submission that when considering this complaint, the Court has to take into account European law, his Constitutional rights and the EU Charter of Fundamental Rights. It was his submission that the Court was obliged to consider the lawfulness of his terms and conditions of Employment as set out in DPER Circulars and whether they contain any breach of rights derived under EU law. The Complainant relies on the decision of the Court of Justice of the European Union in Case C-378/17 Minister for Justice, Equality and Law Reform v Workplace Relations Commissions which held that bodies such as the Workplace relations commissions had to ensure that obligations stemming from the implementation of Directives are implemented and complied with. It was the Complainant’s case that the Court therefore had the authority to set aside the Payment of Wages Act and the relevant Civil Service circulars that required that the overpayment be recouped. It was his submission that Section 5(5) of the Act unreasonably and disproportionately interfered with the Charter of Fundamental Rights. The Complainant was seeking restitution of the money deducted from his pension lumpsum and his final salary. Summary of the Respondent’s submissions. It is the Respondent’s submission that this claim did not have a European dimension to it . The Act was national legislation, and the Court had no authority to disallow same. In respect of the case being relied on by the Complainant that only dealt with legislation emanating from a European Directive. The Complainant unfortunately was paid when his entitlements to paid sick pay had run out. The Complainant was advised on the 12th of July 2019, that he had been overpaid to the value of €8,866.30. He was advised of the repayment options available in line with DPER Circular 07/2018. It was proposed to recoup the overpayment over a twelve-month period. On the 7th of August 2019 the Complainant submitted a hardship application. On receipt of same the Respondent requested that he submit an alternative repayment plan no such plan was submitted. However, on 23rd August 2019 he was informed that his hardship application had been accepted and that no deductions would be made until further notice. In view of his pending retirement the Respondent wrote to the Complainant on the 31st October 2019 advising him that they had offset his non statutory annual leave against his overpayment reducing the overpayment by €2,162.63. The Respondent sought his agreement to offset accrued statutory annual leave, but he declined to give his consent. It is the Respondent’s position that they are entitled to recover the overpayment, the Complainant accepts that in principle they are entitled to recover it and the Act provides at Section 5(5) for the recovery of overpayments. It is also the Respondent’s submission that the deduction from a pension lumpsum is excluded from the protections of the Act. Relevant law. Section 1 (1) of the Act defines wages as follows: “(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 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 purpose of this definition: (i)….. (ii) any payment by way of 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” Section 5 (5) of the Act provides: “Nothing in this section applies to – 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)…….” section 5(6) provides: “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 employer from the wages of the employee on the occasion”. Discussion In respect of the submissions by the Complainant that the Court should set aside the Payment of Wages Act 1991, the Court does not accept that in the circumstances of this case it has the authority to do so. The Complainant has not identified any element of his claim that stems from a relevant Directive emanating from Europe or relevant to the case law of the Court of Justice of the European Union. The Court notes that the Complainant chose to invoke this Act, a National piece of legislation to pursue his claim. It appears to the Court that the question it is being asked to determine in this case is whether the deduction of an overpayment which the Complainant was on notice of, by the Respondent from his pension lump sum and final salary is contrary to the Act. Section 1(1)(ii) of the Act as set out above clearly indicates that pension payment and or gratuity is not covered under the definition of wages and therefore the Court does not have jurisdiction to consider that element of his claim. In respect of the second element of his claim the deduction of the amount of €2162.63 from his final salary by offsetting that amount against accrued non-statutory annual leave, the Court finds that a deduction of that nature is provided for under section 5(5) of the Act. The Court determines that there was no breach of the Act and therefore his appeal must fail. The Decision of the Adjudication Officer is affirmed. The appeal fails. The Court so determines.
NOTE Enquiries concerning this Determination should be addressed to David Campbell, Court Secretary. |
