Complainant

Respondent

Anonymised Parties

General Operative

Manufacturing Company

Representatives

Krzysztof Konczak

Eileen Hayes Hallissey & Partners

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-00034939-001

01/03/2020

The Complainant commenced employment with the Respondent on the 4th April 2008 and she terminated her employment, by resignation, on the 17th December 2019. She worked a 39-hour week for gross pay of €452.63; net €402.81. The Complainant claims that the Respondent breached the Payment of Wages Act, 1991 by not paying her the statutory annual leave entitlement on the cessation of her employment. The Respondent accepts that the salary, as well the commencement and termination dates, as submitted in the complaint form were correct. However, the Respondent claims that the Complainant is barred from taking such an employment rights claim due to a settlement agreement that was reached on all claims in 2019.

Preliminary Issue: Respondent’s Submission:

The Respondent raised a preliminary issue regarding the jurisdiction of the Workplace Relations Commission hearing the complaint on the basis that a settlement was reached with the Complainant in a past personal injuries claim which, the Respondent submits, was in full and final settlement of all matters howsoever arising. The Respondent’s representative stated she was not involved in the settlement agreement and therefore called upon a member of the Respondent’s management’s team, Mr A, to give evidence.

Mr A said that the Complainant suffered an alleged workplace injury in 2016 and she was absent on certified sick leave. He said the Complainant subsequently initiated a personal injury claim that was settled out of court in 2019. He stated that it was his understanding that all claims were covered in the settlement agreement, which was a verbal agreement only, and that he was shocked to see this complaint arising in 2020 after the agreement was struck.

The Respondent submits that the existence of such an agreement effectively bars the Complainant from taking a claim and requests that the Adjudication Officer would dismiss the complaint.

Preliminary Issue: Complainant’s Submission:

The Complainant submits that she sought compensation from the Respondent for her workplace injury in the High Court. It was her understanding that the 2019 settlement agreement related to the personal injury claim only. The Complainant exhibited an email from her personal injury solicitor where the solicitor stated that the Respondent did not look for the Complainant to terminate her employment in the settlement agreement. The solicitor advised in the email that the Complainant should proceed with the Claim.

The Complainant submits that she remained on certified sick leave from the time of her injury in 2016 to the termination of her employment in December 2019. She asserts that she accumulated statutory leave over this period and that this leave was not paid to her on cessation of employment, contrary to the Payment of Wages Act,1991. The Complainant submits that in her approximation, she is due 26 days leave.

The Respondent submits no evidence in rebuttal of the complaint under the Payment of Wages Act,1991 other than the complaint should be dismissed based on the preliminary objection raised above.

Preliminary Issue:

The Respondent is seeking that the complaint should be struck out on the basis the Complainant had agreed a full and final settlement of all claims in a verbal agreement made in November 2019.

The Complainant took the case under section 6 of the Payment of Wages Act (the Act). S11 of the Act states provides guidance of certain provisions  as follows:

A provision in an agreement (whether a contract of employment or not and whether made before or after the commencement of this Act) shall be void in so far as it purports to preclude or limit the application of, or is inconsistent with, any provision of this Act.

The High Court has now confirmed, in the context of the identically worded s.12 of the Protection of Employees (Fixed Term Work) Act 2003, that it does not preclude parties from lawfully agreeing to settle or compromise claims based on the Act. However, case law is concerned primarily with written and signed settlement agreements on the termination of employment. Smyth J. in the High Court case of Sunday Newspapers Ltd (appellant) v Stephen Kinsella v and Luke Bradley (respondents) [2008] E.L.R. 53 stated that “it is a matter for the proper construction of the agreement itself” and some other factors. Smyth J. mentioned two factors to be taken into consideration when assessing such agreements. The first one was as to whether the employee has received “appropriate advice”. Secondly, he found that any agreement or compromise should list various applicable statutes. The corollary of the second point suggests clearly that such agreements should be in written form. It is incomprehensible in this instant case that there was no signed agreement to record a waiver of statutory rights by the Complainant who continued to remain in employment with the Respondent, and where both parties were legally represented in negotiations. Mr A came across as a genuine witness for the Respondent and he gave plausible evidence that he genuinely believed that the verbal settlement of the personal injuries claim settled all claims against the Respondent. However, the fact of the matter is that there was no termination of the Complainant’s employment contract. Notwithstanding the pivotal fact that employment rights continued to accrue for the Complainant, the relevant law suggests even that if it were a severance settlement incorporating a waiver, such an arrangement would have, at the very least, required a detailed drafted agreement listing the relevant Acts with signatures from both parties. Such a document clearly does not exist.

In consideration of the foregoing, I find that the Respondent did not discharge the burden of proving the preliminary issue. On the balance of probabilities, I conclude that the verbal settlement entered into in November 2019 related to the personal injuries claim only and I therefore find that I have full jurisdiction to hear the complaint.

CA-00034939-001 Payment of Wages Claim.

The Complainant’s evidence that she was on certified sick leave since 2016 to the date of termination of her employment on 17th December 2019 and that she did not receive annual leave entitlement upon cessation of her employment, was uncontested by the Respondent. The Complainant did not submit an exact calculation on entitlement but suggested at the hearing that she was entitled to 26 days leave.

The Organisation of Working Time Act, 1997, as amended, allows for circumstances in which leave can be carried forward where an employee is on extended certified sick leave and where he/she cannot take their full entitlement. Where this arises, the leave can be carried forward for a maximum period of 15 months from the end of the leave year. Section 20(1)(c)(iii)(II) of that Act indicates that this is where an employee: “… has provided a certificate of a registered medical practitioner in respect of that illness to his or her employer, within the period of 15 months after the end of that leave year…”

Section 23 gives a guideline as to the relevant period to be assessed for compensation on cessation of employment as follows:

“… (b) In this subsection—

“relevant period” means—

(i) in relation to a cessation of employment of an employee to whom subparagraph (i) of paragraph (c) of subsection (1) of section 20 applies, the current leave year,

(ii) in relation to a cessation of employment of an employee to whom subparagraph (ii) of the said paragraph (c) applies, that occurs during the first 6 months of the current leave year—

(I) the current leave year, and

(II) the leave year immediately preceding the current leave year,

(iii) in relation to a cessation of employment of an employee to whom subparagraph (iii) of the said paragraph (c) applies, that occurs during the first 12 months of the period of 15 months referred to in the said subparagraph (iii)—

(I) the current leave year, and

(II) the leave year immediately preceding the current leave year, or

(iv) in relation to a cessation of employment of an employee to whom subparagraph (iii) of the said paragraph (c) applies, that occurs during the final 3 months of the period of 15 months referred to in the said subparagraph (iii)—

(I) the current leave year, and

(II) the 2 leave years immediately preceding the current leave year.

I note that the Complainant gave no particulars regarding the exact period to be assessed under section 23 of the Organisation of Working Time Act, 1997, as amended, other than to suggest an approximation of at least 26 days. However, I did note that the parties agreed both the date of commencement of sick leave and the date of termination of employment. Whereas the foregoing Act is referred to here to give some guidance regarding holiday entitlement, I note that this complaint was taken under the Payment of Wages Act 1991.

Section 1 of the Payment of Wages Act, 1991 (the Act) defines wages as follows:

“wages”, in relation to an employee, means any sums payable to the employee by the employer in connection with his employment, including—

(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…”

Section 6 provides as follows:

Complaint to adjudication officer under section 41 of Workplace Relations Act 2015

6. (1) A decision of an adjudication officer under section 41of the Workplace Relations Act 2015, in relation to a complaint of a contravention of section 5 as 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.

The Respondent did not contest the fundamental fact at issue at the hearing i.e. that the Complainant did not receive annual leave pay at the termination of her employment after a prolonged period of certified sick leave. I therefore find that the complaint under section 6 of the Act is well founded.

CA-003439 - Complaint seeking adjudication by the Workplace relations Commission under section 6 of the Payment of Wages Act 1991: I find that the complaint is well founded. I direct that the Respondent pay the Complainant the sum of €1,810.52 representing 4 weeks salary, equivalent to 20 days holiday pay, which I consider reasonable in the circumstances.

Annual Leave, certified sick leave, Payment of Wages Act 1991, settlement agreements.