PWD218

1.Appeal Of Adjudication Officer Decision No(S)ADJ-00014776 CA-00018946-001, 004

BACKGROUND:

2.The Employer appealed the Adjudication Officer's Decision to the Labour Courtin accordance with Section 7 (1) of the Payment of Wages Act, 1991. The Court heard the appeal on the 23 February 2021

DETERMINATION:

This is an appeal by Bidvest Noonan,( Ireland) Ltd., ‘the Respondent’ of an award made under the Payment of Wages Act 1991, ‘the Act’, by an Adjudication Officer, ‘AO’, to Ms. Rabonsa, ‘the Complainant’.

The Complainant commenced employment with ISS Facilities Ltd. in December 2001. Under a transfer of undertakings, she became an employee of the Respondent in 2012.

It is contended by the Complainant that her pay with her previous employer was higher than the Employment Regulation Order, ‘ERO’, pay rates for the cleaning industry but that her pay was always increased in line with increases in these rates, prior to her transfer of employment. She claimed a contractual relativity that obliged her new employer, the Respondent, to increase her pay rates in line with increases to the ERO rates. The Respondent denies any contractual relativity and did not increase the Complainant’s rate of pay in line with increases awarded under the EROs for the industry in 2015 and 2016..

The Complainant lodged a claim under the Act with the Workplace Relations Commission on 4 May 2018. The AO found that her case was well founded.

The Respondent appealed to this Court.

Summary of Respondent arguments.

On transferring to the Respondent, the rate of pay for the Complainant was €11.48 per hour, well in excess of the ERO rate of pay, which at that time was €9.50 per hour. EROs were declared unconstitutional by the Courts in 2011 and until they were re-established in 2015, each individual company set rates of pay.

In the due diligence documentation provided upon the transfer of the relevant contract, there was no indication of a contractual entitlement for the Complainant that her pay rates would move in line with ERO rates.

The Complainant lodged her claim on 4 May 2018. The cognisable period, therefore, goes back to 5 November 2017. However, in her claim to the WRC, the Complainant seeks to claim a liability back to 1 December 2016. InHSE v. McDermott (2014) IEHC,Hogan J. dealt with the issue of what is, or is not, a valid claim under the Act. He gave the example that a claim presented in June 2014 that deals with deductions from January to June 2014 is a valid claim whereas a claim regarding deductions going back to 2010 is not. He noted the significance of how the claim is presented. This claim, as originally presented, falls into the invalid category, as identified by Hogan J. The claim is clearly outside of the time limit. Further evidence is that in her appeal to the Labour Court, subsequently withdrawn, the Complainant sought retroactive payment back to October 2015.

A memo on which the Complainant relies, from her previous employer in 2004 to note that the ERO increase at that time would be applied to her pay, although her pay exceeded the ERO rate, does not create any contractual entitlement. It is no more than an expression of the way that the previous employer operated.

Summary of Complainant arguments.

The Respondent is in breach of s. 5(1) of the Act in that unlawful deductions have been made from the pay of the Complainant. Although her pay was higher than ERO rates, the Complainant’s pay when she worked for her previous employer was always linked to increases in the ERO rates. New ERO rates were implemented by the Respondent in October 2015 and December 2016 but only for those workers who were on those rates. The contractual relativity that applied to the Complainant’s pay was not honoured.

Proof of this is contained in memos circulated by the previous employer in 2004 and 2007 and pay slips from that time provided to the Court. The memo of 1 September 2004 stated;

‘There have also been some enquiries about JLC increases and the base rate. As you aware, there was an increase in March of 3% which was applied to the base rate across site and retains the position of all ISS staff on site above the statutory minimum.’

Similarly, in June 2007, a further pay increase was applied and the company stated;

‘From the 1^stJune 2007 a new rate increase has been applied of 4.5% as per the phase agreement with the contract service industry.’

These show clearly the linkage of pay to EROs. The Complainant was entitled to maintain this linkage upon transfer to the Respondent.

The Complainant received no pay increases on foot of the EROs in 2015 and 2016. This amounts to unlawful deductions under s. 5(1) of the Act.

With regard to the ‘McDermott’judgment, the Respondent is misinterpreting the date of the contravention of the Act claimed by the Complainant. The last date of contravention in the original WRC complaint form is shown clearly as 1 December 2017, which is within the cognisable period for a complaint submitted on 4 May 2018. The AO applied the law correctly in allowing the claim to be heard. EROs applied an increase of €0.30 from 1 December 2016, a further €0.35 increase was applied from 1 December 2017 and a final increase of €0.40 was to be applied from 1 December 2018. The rolling time limits identified by Hogan J. in the‘McDermott’case are applicable and an application was made on 4 May 2018 in respect of a contravention that occurred on 1 December 2017, within the cognisable period. The Respondent was put on notice of the breach by letter dated 3 July 2017 but failed to act.

The AO in ordering the Respondent to pay, in the period from 5 November 2017 to 4 May 2017, all increases arising from the EROs in 2015 and 2016 that had not been applied in the 6 months’ period covered by the claim, was applying a correct interpretation of s. 6 of the Act.

The applicable law.

Payment of Wages Act 1991.

Interpretation.

1.— (1) In this Act—

“cash” means cash that is legal tender;

“contract of employment” means—

(a) a contract of service or of apprenticeship, and

(b) any other contract whereby an individual agrees with another person to do or perform personally any work or service for a third person (whether or not the third person is a party to the contract) whose status by virtue of the contract is not that of a client or customer of any profession or business undertaking carried on by the individual, and the person who is liable to pay the wages of the individual in respect of the work or service shall be deemed for the purposes of this Act to be his employer,

whether the contract is express or implied and if express, whether it is oral or in writing;

Regulation of certain deductions made and payments received by employers.

5.— (1) 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.

(2) An employer shall not make a deduction from the wages of an employee in respect of—

(a) any act or omission of the employee, or

(b) any goods or services supplied to or provided for the employee by the employer the supply or provision of which is necessary to the employment,

unless—

(i) the deduction is required or authorised to be made by virtue of a term (whether express or implied and, if express, whether oral or in writing) of the contract of employment made between the employer and the employee, and

(ii) the deduction is of an amount that is fair and reasonable having regard to all the circumstances (including the amount of the wages of the employee), and

(iii) before the time of the act or omission or the provision of the goods or services, the employee has been furnished with—

(I) in case the term referred to insubparagraph (i)is in writing, a copy thereof,

(II) in any other case, notice in writing of the existence and effect of the term,

and

(iv) in case the deduction is in respect of an act or omission of the employee, the employee has been furnished, at least one week before the making of the deduction, with particulars in writing of the act or omission and the amount of the deduction, and

(v) in case the deduction is in respect of compensation for loss or damage sustained by the employer as a result of an act or omission of the employee, the deduction is of an amount not exceeding the amount of the loss or the cost of the damage, and

(vi) in case the deduction is in respect of goods or services supplied or provided as aforesaid, the deduction is of an amount not exceeding the cost to the employer of the goods or services, and

(vii) the deduction or, if the total amount payable to the employer by the employee in respect of the act or omission or the goods or services is to be so paid by means of more than one deduction from the wages of the employee, the first such deduction is made not later than 6 months after the act or omission becomes known to the employer or, as the case may be, after the provision of the goods or services.

Complaint to adjudication officer undersection 41of Workplace Relations Act 2015

6. (1) A decision of an adjudication officer undersection 41of the Workplace Relations Act 2015, in relation to a complaint of a contravention ofsection 5as respects a deduction made by an employer from the wages of an employee or the receipt from an employee by an employer of a payment, that the complaint is, in whole or in part, well founded as respects the deduction or payment shall include a direction to the employer to pay to the employee compensation of such amount (if any) as he considers reasonable in the circumstances not exceeding —

(a) the net amount of the wages (after the making of any lawful deduction therefrom) that —

(i) in case the complaint related to a deduction, would have been paid to the employee in respect of the week immediately preceding the date of the deduction if the deduction had not been made, or

(ii) in case the complaint related to a payment, were paid to the employee in respect of the week immediately preceding the date of payment,

or

(b) if the amount of the deduction or payment is greater than the amount referred to inparagraph (a), twice the former amount.

(2) (a) An adjudication officer shall not give a decision referred to insubsection (1)in relation to a deduction or payment referred to in that subsection at any time after the commencement of the hearing of proceedings in a court brought by the employee concerned in respect of the deduction or payment.

(b) An employee shall not be entitled to recover any amount in proceedings in a court in respect of such a deduction or payment as aforesaid at any time after an adjudication officer has given a decision referred to insubsection (1)in relation to the deduction or payment.

Decision of Labour Court on appeal from decision referred to insection 6]

7.— A decision of the Labour Court undersection 44of the Workplace Relations Act 2015, on appeal from a decision of an adjudication officer referred to insection 6, shall affirm, vary or set aside the decision of the adjudication officer.

Workplace Relations Act 2015.

S. 41

6) Subject tosubsection (8), an adjudication officer shall not entertain a complaint referred to him or her under this section if it has been presented to the Director General after the expiration of the period of 6 months beginning on the date of the contravention to which the complaint relates.

(8) An adjudication officer may entertain a complaint or dispute to which this section applies presented or referred to the Director General after the expiration of the period referred to insubsection (6)or(7)(but not later than 6 months after such expiration), as the case may be, if he or she is satisfied that the failure to present the complaint or refer the dispute within that period was due to reasonable cause.

Deliberation

Time Limits

The Respondent submits that the Complainant’s complaint is statute barred in that it was submitted outside the statutory six-month time limit set out in section 41 of the Workplace Relations Act 2015.

It relies on the decision of Hogan J inHealth Service Executive v McDermott [2014] IEHC 331in support of its position. It submits that, properly applied, the judgement requires that the Court examine the complaint as framed by the Complainant. It submits that, having done so, the Court must find that the Complainant framed the complaint as referring to a contravention of the Act that commenced in December 2016.

The Respondent submits that the Complainant’s Workplace Relations Complaint form clearly outlines that she is seeking increases going back to 1 December 2016 and this is outside the limits set down in ‘McDermott’.

The Respondent submits that in her appeal form to the Labour Court, the Complainant is seeking a retroactive payment back to October 2015; that this is her clear intention and that this falls outside the time limits for lodging a case with the WRC and, as a result, the complaint is statute barred.

The Complainant submits that the date of contravention outlined in WRC complaint form was 1 December 2017 and that the complaint itself was lodged on 4 May 2018 bringing it within the 6-month time limit and that, while a contravention may be ongoing over an extended period of time, that does not mean that a person loses the right to issue a claim. It further submits that the Respondent is seeking to rely on 1 December 2016 date as the date in which the contravention had been originally framed whereas this was not the case.

Section 41 of the Workplace Relations Act 2015 sets out the procedure for the making of complaints by employees in relation to contraventions of s.5 of the Payment of Wages Act.

InHealth Service Executive v McDermott [2014] IEHC 331Hogan J considered the meaning of the term “within 6 months beginning on the date of the contravention which the complaint relates”. He held

“12. It is at this point that we can return to the construction of the relevant language of s. 6(4), namely, “within the period of 6 months beginning on the date of the contravention to which the complaint relates”. The first thing to note is that no special meaning has been ascribed to the word “contravention” by the 1991 Act, so that it must be given its ordinary, natural meaning.

13. We may next observe that the actual language of the sub-section is clear, because it is the words “contravention to which the complaint relates” which are critical. It may be accepted that every distinct and separate breach of the 1991 Act amounts to a “contravention” of that Act. If, for example, an employee is paid monthly and the employer makes unlawful deduction X in respect of salary for every month in a two year period it might be said in the abstract that there have been 24 separate “contraventions” of the 1991 Act during that period.

14. Yet the relevant statutory language takes us somewhat further, because the key question is the “date of the contravention to which the complaint relates.” In other words, time runs for the purposes of the Act not from the date of any particular contravention or even the date of the first contravention, but rather from the date of the contravention “to which the complaint relates.” As the EAT pointed out in its ruling on the matter, had the Oireachtas intended that time was to run from the date of the first contravention, it could easily have so provided.

15. For the purposes of this limitation period, everything turns, accordingly, on the manner in which the complaint is framed by the employee. If, for example, the employer has been unlawfully making deductions for a three-year period, then provided that the complaint which has been presented relates to a period of six months beginning “on the date of the contravention to which the complaint relates”, the complaint will nonetheless be in time.

16. It follows, therefore, that if an employer has been making deduction X from the monthly salary of the employee since January 2010, a complaint which relates to deductions made from January, 2014 onwards and which is presented to the Rights Commissioner in June, 2014 will still be in time for the purposes of s. 6(4). If, on the other hand, the complaint were to have been framed in a different manner, such that it related to the period from January, 2010 onwards, it would then have been out of time.

17. It may be that when enacting s. 6(4) the Oireachtas did not fully appreciate that everything might turn for the purposes of time on the actual manner in which the particular complaint was actually framed by the employee, but the language of the sub-section really admits of no other conclusion. Nor can it be said that such a conclusion is absurd in any way.

Applying the law as set out by Hogan J to the facts of this case the Court is required to consider the Complainant’s complaint to the Workplace Relations Commission, submitted on 4 May 2018.

The Complainant initially made a number of complaints under various Acts including two complaints under the Payment of Wages Act under both of which she initially appealed the AO’s Decisions to this Court. However, these appeals were withdrawn. The only appeal under the Act for the Court’s consideration is that of the Respondent in respect of a claimed breach of the Act that was stated in the complaint form to have occurred on 1 December 2017.

On examination of the complaint form, the Court finds that the date of the deduction in the case before the Court is stated clearly to be 1 December 2017. The amount of the deduction is given as €2,444. The reason for the deduction is given as the non-implementation of S.I. No. 548 of 2016. In the box where the Complainant is required to outline in detail the specifics of their complaint, the Complainant has inserted the following:NOTE: The selective implementation of S.I. No 548 of 2016 on Contract Cleaning in Noonan- Intel Site. Herewith is the original appeal letter to Ms E. O., Site Manager of Noonan Services Group. Furthermore, the 6 months time limit in lodging a formal complaint with WRC should not apply because S.I. No 548 of 2016 is currently on implementation until 1 December 2018.

Underneath this, there is inserted the contents of a letter to the Site Manager dated 3 July 2017 from a number of employees requesting a salary increase in line with the 2016 ERO, backdated to 1 December 2016 and requesting future increases in December 2017 and 2018 in line with the ERO. It says that the basis for this request/complaint is a memorandum from ISS Facilities dated 1 September 2004 and then goes on to quote an extract from this which reads:“There have also been some enquiries about JLC increases in the base rate. As you are aware, there was an increase in March of 3% which was applied to the base rate across site and retains the position of all ISS staff on site above the Statutory Minimum. The next increase is due from 1 December 2004. Please refer to JLC order, a copy of the nominated minimum wage rates as printed from the JLC website on 31 August 2004, on the notice board.”The letter to the Site Manager goes on to assert that by virtue of the Transfer Regulations, the entitlement, evidenced in the 2004 memorandum, to retain the position of all ISS Staff above the statutory minimum transferred when they, the employees, were transferred from ISS Facilities to Noonan Services in 2010. Towards the end of the letter to the site manager the employees set out their request namely that“the salary increase be implemented as stated above with retroactive effect from 1 December 2016. Please also include operatives who have not been given the said wage increase that were hired by Noonan in this site.”

As framed, the Court finds that the complaint relates to a deduction commencing on 1 December 2017. That date is clearly and unequivocally stated to be the date of the relevant deduction. The reference back to December 2016 is a reference to what the employees believed their contractual entitlement to be in July 2017 and sets out why they submitted this request to their employer. It does not undermine 1 December 2017 as the date of the contravention for the purposes of the claim. The inclusion of the letter to their site manager and the 2004 memorandum in the complaint box set out why the Complainant believed she had a contractual right to any increases under the various Contract Cleaning EROs and how liability passed from ISS Facilities to the Respondent by virtue of the transfer regulations. They do not undermine the fact that for the purposes of her claim under the Act the date of the deduction is, as written, 1 December 2017.

The Court finds that complaint is not statute barred and that it has jurisdiction to hear the instant appeal. The cognisable period is the 5 November 2017, up until the 4 May 2018, the date when the complaint was submitted and the date of contravention, stated to be 1 December 2017, is within this period.

Substantive Matter

The Court is required to determine what pay rate was ‘properly payable’ within the cognisable period and, having done so, to determine if, as claimed by the Complainant, there was an unlawful deduction from this amount, contrary to the terms of the Act.

The Complainant argues that when she was employed by IIS Facilities, she got the benefit of every increase to the hourly rate resulting from the Contract Cleaning Employment Regulations Orders from 2004, even though at the time of the increase she was earning in excess of the minimum rates stipulated. She says that her contractual entitlement arose by virtue of the practice of ISS Facilities in relation to the implementation of the 2004 and 2007 EROs, evidenced by memoranda addressed to all staff in September 2004 and June 2007. The Complainant says that at the time of her transfer from ISS Facilities to Noonan in 2010 she had a contractual entitlement to receive the benefit of any pay increase set out in all future EROs. The Complainant states that this was incorporated into her contract of employment by the action of ISS in faithfully applying the 2004 and 2007 ERO increases as they fell due and as confirmed by the 2004 and 2007 correspondence and as evidenced in her pay slips for 2006,2007 and 2008.

The Respondent argues that there is nothing in the Complainant’s contract of employment to show the existence of such a right; that at the time of the transfer it was not made aware of this entitlement by way of the due diligence process and that the first it was alerted to this by the Complainant was in 2017,some seven years post transfer and some two plus years following the making of the Contract Cleaning ERO for 2015 (S.I.418 of 2015) and some seven months following the making of the 2016 ERO (S.I. 547 of 2016)

Both parties agree that there is no express entitlement in the Complainant’s written contract to a pay increase whenever an increase in rates is applied through the relevant ERO. The Complainant says that her entitlement derives from the acknowledgement by ISS Facilities that higher paid cleaning staff should retain their pay differential and the practice of ISS Facilities of giving the Complainant the benefit of each and every increase set out in the 2004 and 2007 EROs to give effect to this and that, as a consequence, this is an entitlement incorporated as a term of her contract of employment.

The Complainant exhibits 3 pay slips as proof that on all occasions she received the increase in the hourly rates awarded under both the 2004 and the 2007 EROs.

The pay slip for week ending 17 September 2006 shows a base rate of €10.51 per hour.

It is not probative of anything.

The pay slip for week ending 28 October 2007 shows a base rate of €10.96 per hour.

This demonstrates an increase of 45c in the Complainant’s hourly rate and does not correspond with the 39c uplift provided under the 2007 ERO, effective from 1 June 2007.

The pay slip for week ending 14 September 2008 shows a base rate of €11.48 per hour.

This demonstrates an increase of 52c in the Complainant’s hourly rate and does not correspond with the 45c uplift provided under the 2008 ERO, effective from 1 June 2008.

The two memoranda, as drafted, establish at their height a contractual entitlement to a pay increase in December 2004. They do not establish any contractual entitlement beyond that.

In reaching this conclusion, the Court has regard to case law in determining what constitutes an implied term of contract. The two tests are as set out inShirlow v. Southern Foundaries Ltd. (1939) 2K. B. 206,which established the ‘officious bystander’ test, whereby an officious bystander, if shown a term that self evidently should have been written into a contract but was not, would exclaim ‘Oh, of course’. This test was expanded upon in the Irish Supreme Court case ofSweeney v. Duggan (1997) ILRM 221in which it was held that any implied term must be necessary to give effect to the contract. The Court is satisfied that this is clearly not applicable to the instant case.

The second test of ‘custom and practice’ was set out inO’Reilly v. Irish Press, (1937) 71 I.L.T.R. 194and was identified as a term that is so notorious, so well known and acquiesced in so that it can be taken to be a term of contract. It is clear to the Court that these conditions are not applicable to the instant case.

The Complainant has failed to establish that as a matter of practice she received the equivalent increases in monetary terms to that awarded under the 2007 ERO. Even had she done so, she has failed to establish that the two memoranda establish a contractual entitlement to the same increases in pay awarded under the EROs for her industry where she was already in receipt of remuneration above the minimum rate.

In those circumstances the Court finds that the hourly rate properly payable to the Complainant is as expressed in her contract of employment and in those circumstances, the Court finds there was no unlawful deduction within the meaning of s. 5 of the Payment of Wages Act 1991.

Determination

The Decision of the Adjudication Officer is overturned.

The Court so determines.

	Signed on behalf of the Labour Court
	Tom Geraghty
DC	______________________
13 April 2021	Deputy Chairman