ADJUDICATION OFFICER DECISION
Adjudication Reference: ADJ-00029871
Parties:
| Complainant | Respondent |
Parties | Deirdre Sands | Glenview Hotel Limited Glenview Hotel & Leisure Club |
Representatives | David Higgins Berwick Solicitors | Paul Gough Beauchamps |
Complaint(s):
Act | Complaint/Dispute Reference No. | Date of Receipt |
Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991 | CA-00039708-001 | 09/09/2020 |
Date of Adjudication Hearing: 27/05/2021
Workplace Relations Commission Adjudication Officer: Roger McGrath
Procedure:
In accordance with Section 41 of the Workplace Relations Act, 2015 following the referral of the complaint to me by the Director General, I inquired into the complaint and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint.
The parties agreed from the outset that there was no dispute as to the facts of this case and therefore, sworn evidence was not required.
This matter was heard by way of remote hearing pursuant to the Civil Law and Criminal Law (Miscellaneous Provisions) Act 2020 and SI 359/20206, which designates the WRC as a body empowered to hold remote hearings.
Background:
The complainant commenced employment with the respondent, a large hotel, on 19 February 2019. She was employed as Sales and Marketing Manager. She was dismissed on 13 February 2020. A complaint was received by the WRC on 9 September 2020. |
Preliminary Point
Respondent’s Submission on Preliminary Points
Pension
The respondent submits that section 1 of the Payment of Wages Act, 1991, specifically excludes pensions from the definition of “wages”. It is submitted by the respondent that the part of the claim that concerns the alleged non-payment of a pension contribution falls outside the terms of the Act.
Time Limits
The respondent submits that section 41 of the Workplace Relations Act provides that, “Subject to subsection (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 refers.”
The respondent submits that in this case the complainant was informed on 18 February 2020 by letter that no bonus was due, if there was a breach of the Act then any contravention occurred on that date and the time for filing a claim with the WRC commenced on 18 February 2020. The claim form was not filed until 9 September 2020, approximately 7 months after the date of the alleged contravention and therefore falls outside of the time limit set out in the Workplace Relations Act.
Complainant’s Submission on Preliminary Points
Pension
The complainant submits that she was contractually entitled to a pension contribution capped at €3,000 per annum which was not paid to her. She is still entitled to this payment.
Time Limits
The complainant refers to section 41(6) of the 2015 Act and submits that the date of contravention is the date upon which the loss occurs.
The complainant submits that, notwithstanding the fact that the complainant was advised in February 2020 that she would not be receiving her bonus, the actual date when the contravention occurred was the end of May 2020, when the bonus became due for payment and was not paid. This being the case, the application to the WRC being made on 9 September 2020 is well within 6 months from the end of May 2020.
Findings and Conclusions on Preliminary Points
Pension
Section 1 of the Payment of Wages Act, 1991 states;
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,
(iii) any payment referable to the employee's redundancy,
(iv) any payment to the employee otherwise than in his capacity as an employee,
(v) any payment in kind or benefit in kind.
I find that the claim concerning the alleged non-payment of a pension contribution falls outside the Terms of the 1991 Act and I do not have jurisdiction in the matter.
Time Limit
Section 41(6) of the Workplace Relations Act, 2015 denies jurisdiction to hear a complaint unless the complaint is submitted within six months of the date of contravention. The date of contravention being the first date on which payment was allegedly withheld. In this case the bonus was allegedly due at the end of May 2020 and the complaint was lodged on 9 September 2020.
In the High Court decision of HSE v McDermott [2014] IEHC 331, the Court considered a complaint submitted within 6 months of the dated and alleged unlawful deduction by the respondent who maintained that as the deductions commenced several years previously, the complaint was inadmissible. Hogan J held that that employee was entitled to have deductions which fell outside of the 6-month statutory time limit examined. The Court examined Section 6 (4) of the 1991 Act which prescribes the following time limit for claims before the Rights Commissioner:
“A Rights Commissioner shall not entertain a complaint under this section unless it is presented to him within the period of six months beginning on the contravention to which the claim relates.”
The court considered the date of contravention as being critical and held that as long as the complaint refers to a contravention which fell within the preceding six months of the referral to the Rights Commissioner, the complaint will be admissible, and the employee may also be permitted to look at alleged deductions outside of the 6-month referral period.
As the alleged illegal deduction took place within a six-month period of the lodgement of the complaint, I am satisfied I have jurisdiction to decide on this claim.
Summary of Complainant’s Case:
The complainant submits that her contract of employment stated that her remuneration package, in addition to her basic salary, included an €11,000 per annum performance-based bonus, which was never paid to her, to which she is entitled. The complainant submits that on 14 June 2019, she requested details of the bonus structure in writing and suggested it should be formalised, however she was told by the then General manager that she should not worry about it and that he would ensure she was paid the bonus. In August 2019, the General Manager again had reason to thank the complainant for her good work and to tell her that she had justified a big bonus as she had saved the company a lot of hardship and embarrassment. On 13 January 2020, the complainant was dismissed from her employment, with immediate effect by a new General Manager. On 17 February 2020, the complainant wrote to the new General Manager requesting payment of her performance related bonus. The respondent replied on 18 February 2020, stating, that as achievements were not reached throughout the 11-month period from the employment start date, there were no outstanding bonus payments. The complainant submits that the respondent did not have discretion not to pay the bonus in circumstances where the complainant repeatedly requested confirmation in writing of the terms of the evaluation and requirements for her bonus. Instead of receiving this confirmation she was advised that her bonus was guaranteed. The respondent did not, at any time during the term of employment, advise the complainant that her performance was such that it would reduce or negate her bonus. The complainant also submits that she was not provided with the terms that the bonus would be evaluated upon. It was not clearly stated if the performance element of the bonus referred to the financial performance of the respondent or the performance of the complainant. The complainant submits that the respondent has breached her rights under the 1991 Act and wishes that her performance related bonus be paid and backdated to the date of commencement of her employment.
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Summary of Respondent’s Case:
The respondent submits that the complainant was employed for 11 months by the respondent. Unfortunately, her performance as Sales and Marketing Manager did not meet the requirements of the respondent and this is why her employment was terminated. Her letter of appointment stated that she was eligible for an “€11k performance related bonus pro rata”. The respondent submits that it is clearly implied by the wording that the bonus is discretionary and based on performance. In this case the complainant’s performance dd not meet the standard required to warrant a bonus, particularly as it was necessary to end her employment within 11 months and therefore no monies are due to her. The General manager gave evidence at the hearing and stated that after St Patrick’s Day 2020, the hotel was forced to close, that 90% of employees were laid off and that as the business was cash starved no bonuses at all were paid in 2020 for 2019.
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Findings and Conclusions:
The Payment of Wages Acts prevents an employer making unlawful deductions from the pay ‘properly payable’ to an employee. The question here is whether the bonus was properly payable per the contract of employment in the period in question. Regarding the payment of bonuses, I refer to the High Court decision in Cleary and Others -v- B&Q Ireland Limited, 2016 IEHC119. In that case Mr Justice McDermott stated: “The discretion to withdraw the bonus scheme at any time, in my view, was always intended to apply in future and attached to the conferring of bonuses, as yet un-accrued, under the terms of the Scheme. The payment of the bonus crystallised as a contractual obligation once it was earned in accordance with the terms of the Scheme as operated”. The interpretation of this decision is that once a bonus has been earned it cannot be revoked. In this instant case, the complainant argues that they had earned the bonus and it is thus due to them despite the fact that they no longer work for the respondent. However, although the bonus scheme in operation had no explicit terms or criteria to evaluate how it could be earned it was nonetheless linked to performance as specified in the contract of employment. In circumstances where the complainant was dismissed for her poor performance it would seem erroneous to argue that she should still be paid a “performance related bonus”. I note the respondent’s evidence that no bonuses were paid to any employee in May 2020 for 2019 performances due to the trading position of the hotel. I find that the non-payment of this bonus is not therefore an unlawful deduction pursuant to the Payment of Wages Act.
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Decision:
Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint(s)/dispute(s) in accordance with the relevant redress provisions under Schedule 6 of that Act.
The complaint is not well-founded. |
Dated: 31st August 2021
Workplace Relations Commission Adjudication Officer: Roger McGrath
Key Words:
Bonus, performance, time limits, |