Complainant

Respondent

Anonymised Parties

A Consultant Surgeon

A Hospital

Representatives

Paul Maier Irish Medical Organisation

Employee Relations Manager

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-00031235-001

02/10/2019

This claim relates to the deduction of monies paid to the Complainant by the Respondent from his wages on 27 June 2019 despite the objection of the Complainant. The Complainant submitted the complaint form to the Workplace Relations Commission on 2 October 2019.

The Complainant has been engaged as a Consultant Surgeon with the Respondent since 1 May 1994. He works a 39-hour week and receives €6,881.60 gross fortnightly which was confirmed by both parties. Both parties agreed that the total amount of deduction was €29,767.59 gross.

The Complainant was represented by his Union while the Employee Relations Manager represented the Respondent. The parties exchanged submissions and were given amble opportunity to present and have their sides heard. The Complainant did object to the presentation of the table on page 10 of the Respondent’s submission as it was the first time he had seen such calculations.

The Complainant stated following a Labour Court Recommendation, LUCRE-21853, dated 11 December 2018, that he was awarded compensation for the loss of earnings associated with his previous on call arrangement following reconfiguration in 2014. The Complainant’s representative raised points on the nature of the payment.

The General Manager of the Respondent wrote to the Complainant by letter, dated 15 April 2019, following the Recommendation of the Labour Court setting out the calculation of the amount of compensation owing. Both parties agreed that it was calculated at 1.5 times the loss of earning which amounted to €38,345 multiplied by 1.5 times which equates to €57,518.13 gross.

The Respondent’s letter continues to state that there had been an overpayment of B factor (1:1 rota) allowance made in the sum of €29,767.59 gross. The General Manager referred to S.4.1.1. of the Overpayment Policy and advised that €29,767.59 would be deducted in the next payroll.

By letter, dated 24 April 2019, the Complainant’s representative wrote to the Respondent objecting to the deduction and distinguishing the Labour Court’s Recommendation which did not make a determination on the 1:1 rota and stated; “any deduction to the ordered award amount in respect of these payments would serve to undermine the recommendation of the Labour Court.” The letter also quotes the Section 4.6.20 –Overpayments Policy, which states:

“in the event that there is a dispute in relation to an under or overpayment, employees have recourse to [x] Grievance Procedures……While the employee is engaging in this process no deductions will be made.” (Redactions made to respect the anonymity of the parties)

On the Complainant’s payslip dated, 27 June 2019, it states a gross sum of €57,518.13 labelled as “Other” with a deduction of €29,619.76 labelled “B-factor”.

The Respondent provided comprehensive submissions in response to the Complainant’s claim. While all documents have been carefully considered, I do not propose to detail all of them in light of the Respondent’s own observation, this is a Payment of Wages Act 1991 case and not an Industrial Relations matter.

The Respondent opened the two letters referred to by the Complainant; the letter from the General Manager, dated 15 April 2019, to the Complainant and his response via his union representative, dated 24 April 2019. The Respondent stated that it engaged with the Complainant at all times and it was its statutory responsibility to recoup overpayments.

The Respondent opened the following parts of s. 5(5) of the Payment of Wages Act 1991:

5) 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) any overpayment in respect of expenses incurred by the employee in carrying out his employment, made (for any reason) by the employer to the employee, and

(ii) the amount of the deduction or payment does not exceed the amount of the overpayment,                         

Or

(d) a deduction made by an employer from the wages of an employee in pursuance of any arrangements—

(i) which are in accordance with a term of a contract made between the employer and the employee to whose inclusion in the contract the employee has given his prior consent in writing, or

(f) a deduction made by an employer from the wages of an employee with his prior consent in writing, or any payment received from an employee by an employer, where the purpose of the deduction or payment is the satisfaction (whether wholly or in part) of an order of a court or tribunal requiring the payment of any amount by the employee to the employer, or”

The Respondent states that the deduction of over payment was made to a lump sum, which was otherwise payable to the Complainant in accordance with the Recommendation of the Labour Court in December 2018.

The Respondent argued the jurisdiction of this case is limited to s. 5 of the Payment of Wages Act 1991 and not on the questions of (a) whether or not an error was made and (b) whether or not the payment recouped was an overpayment.

The Respondent opened the Labour Court decision in An Employer v A Worker, PWD1916 referring to the Court’s jurisdiction in relation to s. (5) (5) (a):

“Subsection (5)(a) of Section 5 of the Act does not prohibit deductions made in respect of an overpayment of wages where the amount deducted does not exceed the amount due to the employer.”

Consequently, the Court must turn to a consideration of whether or not the purpose of the deduction made was to recover an overpayment of wages erroneously made and, if so, whether or not the amount recovered exceeded the amount of the overpayment, in which case, in accordance with Section 5(5) of the Act, the Court has no jurisdiction to determine the legality of any deductions made.”

Having carefully considered the facts of this case, evidence and submissions I made the following findings: -

I acknowledge the Respondent’s reliance on Labour Court, An Employer v A Worker, PWD1916, in that my jurisdiction rests on “whether or not the purpose of the deduction made was to recover an overpayment of wages erroneously made and, if so, whether or not the amount recovered exceeded the amount of the overpayment, in which case, in accordance with Section 5(5) of the Act, the Court has no jurisdiction to determine the legality of any deductions made.”

However, I am not satisfied that the purpose of the deducted sum of €29,619.76 was made from the Complainant’s as detailed in his payslip dated 27 June 2019 was to recover an overpayment of wages erroneously made.

The Respondent set out a table at paragraph 43 of its submissions with years and payments together with over payments and over deducted amounts. The Complainant objected to the table and in the absence of evidence to substantiate the figures alleged, it must be disregarded for the purposes of this decision. It is also noted that the period in which the Respondent alleged overpayments were made relate to the years from 2014 to 2018 with recoupment taking place in June 2019.

The Respondent sought to rely on s. 5 (5) (i) where the employer has been given prior consent in writing by the employee to deduct from the wages of the employee. One contract was presented by the Respondent signed by the Complainant on 14 September 2008. From review there is no reference to a deduction clause. Furthermore, by letter dated 24 April 2019, the Complainant expressly objected to the deduction ending the letter with a request for further discussion.

The Respondent also sought to rely on S. 5 (5) (f) of the Payment of Wages Act 1991 wherein there is reference to a deduction being made in satisfaction of an order of a court or tribunal. The matter before the Labour Court from which dispute partial derives from was an Industrial Relations dispute resulting in the Labour Court issuing a Recommendation which differs in its legal standing to that of an order of the tribunal. Consequently, there is no basis in s. 5 (5) (f) of the 1991 Act to deduct wages based on a Recommendation alone.

Consequently, I find the sum of €29,619.76 was an unlawful deduction from the Complainant’s wages on 27 June 2019.

The Complainant’s claim is well founded. Accordingly, I order that the Respondent to pay the Complainant compensation of the amount of €29,619.76 due to the Complainant arising from the unlawful deduction within one month of the date of this decision.

Payment of Wages – Well Founded -