Complainant

Respondent

Anonymised Parties

A Site Manager

An Employment Agency

Representatives

N/A

Helena Broderick Collier Broderick Management Consultants

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-00036536-001

05/06/2020

The complainant commenced work as a site manager with the respondent in August 2019. Further to his departure from the company in November 2019, the respondent made a number of deductions from the complainant’s final salary payment which was made on 10th December 2019. These deductions amounted to €3,220.86 in total.

The complainant outlined the four deductions that were made from the salary paid to him on 10th December 2019 which he claims should not have been made.

These were:

(i) Vacant accommodation from the 27/11 to 21/12           974.96

The complainant stated that this deduction should not have been made because his period of notice had expired at this stage

(ii) Vehicle collection                                                                    500.00

The complainant stated that this deduction should not have been made because he informed the respondent that he would be leaving the car at the apartment as he was getting the train to the airport.

(iii) The unused flight on the 4th of December                      238.95

The complainant stated that this deduction should not have been made because he had paid for his own flight and had never asked the respondent to book a flight for him.

(iv) Costs deducted in respect of his replacement                1,506.95

The complainant stated in evidence that the respondent had always intended to bring this person to site and his arrival had nothing to do with the complainant’s departure.

The complainant commenced employment as a site manager on 24th August 2019. On commencing employment, he was given a contract of employment, clause 17 of which referred to the respondent’s entitlement to deduct from remuneration payable to the employee any monies owed by the complainant to the respondent. He was also issued an appendix to the contract which spelt out out the exceptional circumstances that would give rise to deductions from his remuneration. In particular, these potential deductions included flights booked by the respondent on the complainant’s behalf should he fail to take them as well as any costs incurred by the company in respect of a premature departure by the complainant. They included any payments made by the respondent related to unused accommodation, unused ground transport, flights not used and any other incurred costs will be charged to the complainant.

The complainant submitted his notice of termination via email on 25th November 2019 and indicated that he would work until 3rd December. Despite this, he left the company’s employment on 27th November. As a result of costs that had been incurred arising from the premature departure, the respondent decided to make a number of deductions from his salary as highlighted above.

The respondent stated that the deductions were provided for in the issued written terms and conditions of employment and were no more than the actual cost to the company. In addition, notice of the deductions were given and were followed up and explained in correspondence with the complainant.

The Law

Section 5 (1) of the Payment of Wages Act 1991 states:

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.

Section 5 (2) of the Act further states that:

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 in subparagraph (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,

Analysis

As highlighted above, there were four separate categories of deduction taken from the complainant’s pay on 10th December 2019. Specifically, these were

1)      A deduction in respect of unused accommodation in the amount of €974.96

2)      A deduction in the respect of vehicle collection in the amount of €500 which was made because the complainant did not leave his vehicle at the airport

3)      A deduction in the amount of €238.95 in respect of an unused flight for the 4th December 2019 which the respondent had paid for

4)      A deduction totalling €1506.95 in respect of costs incurred by the complainant’s replacement.

I therefore propose to look at each category and examine whether or not the deductions are allowable according to the provisions in the Act as set out above.

THE FIRST DEDUCTION

I find that there was no breach of Section 5 (1) of the Act given that it was “authorised… by…. a term of the employee's contract of employment…. and in force at the time of, the deduction”. Specifically, Section 3 (a) of the document entitled “Employment Agreement re Exceptional & Unnecessary charges giving rise to the deductions from the Employee’s Wages” which was appended to the complainant’s contract of employment, and was signed by him, clearly states that the respondent can make a deduction from his wages in respect of any unused accommodation which has been paid for by the company.

I also find that the complainant’s failure to use the accommodation provided to him by the respondent represented “an act or omission” as stated in Section 5(2) (a) of Act as set out above. In addition, I find that the complainant was not informed in writing of this deduction until 9th December despite being paid on 10th December. This is at odds with Section 5(2) (iv), also outlined above, which stipulates that the complainant should have been made aware “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”

THE SECOND DEDUCTION

I find that there was no breach of Section 5 (1) of the Act given that it was “authorised… by…. a term of the employee's contract of employment…. and in force at the time of, the deduction”. Section 3 of the document entitled “Employment Agreement re Exceptional & Unnecessary charges giving rise to the deductions from the Employee’s Wages” which was appended to the complainant’s contract of employment, and was signed by him, clearly states that the respondent can make a deduction from his wages in respect of any “incurred costs” for arising from his premature departure. Specifically, I note that the complainant had not returned his car to the airport where he had first picked it up and that two employees had to travel a considerable distance to pick it up. In addition, I note that Section 34 of his contract of employment states that the complainant was required to return his car to the company in a timely manner upon the termination of his employment.

I also find that the complainant’s failure to leave his car at the airport represented “an act or omission” as stated on Section 5(2) (a) of Act as set out above. In addition, I find that the complainant was not informed in writing of this deduction until 9th December despite being paid on 10th December. This is at odds with Section 5(2) (iv), also outlined above, which stipulates that the complainant should have been made aware “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.

THE THIRD DEDUCTION

I find that there was no breach of Section 5 (1) of the Act given that it was “authorised… by…. a term of the employee's contract of employment…. and in force at the time of, the deduction”. Specifically, the complainant indicated to the respondet Section 2 (a) of the document entitled “Employment Agreement re Exceptional & Unnecessary charges giving rise to the deductions from the Employee’s Wages” which was appended to the complainant’s contract of employment, and was signed by him, clearly states that the respondent can make a deduction from his wages in respect of any unused flights which have been paid for by the company.

I also find that the complainant’s failure to use this flight represented “an act or omission” as stated on Section 5(2) (a) of Act as set out above. I also find that the complainant was not informed in writing of this deduction until 9th December which is at odds with Section 5(2) (iv), also outlined above, which stipulates that the complainant should have been made aware “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.

THE FOURTH DEDUCTION

I find that there was no breach of Section 5 (1) of the Act given that it was “authorised… by…. a term of the employee's contract of employment…. and in force at the time of, the deduction”. Section 3 of the document entitled “Employment Agreement re Exceptional & Unnecessary charges giving rise to the deductions from the Employee’s Wages” which was appended to the complainant’s contract of employment, and was signed by him, clearly states that the respondent can make a deduction from his wages in respect of any “incurred costs” for arising from his premature departure. Specifically, I note that the respondent had to arrange a replacement for the complainant at very short notice and that costs of sourcing his required replacement were incurred.

I also find that the complainant’s premature departure, which resulted in him being charged for costs incurred surrounding his replacement, represented “an act or omission” as stated on Section 5(2) (a) of Act as set out above. I find that the complainant was not informed in writing of this deduction until 9th December which is at odds with Section 5(2) (iv), also outlined above, which stipulates that the complainant should have been made aware “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.

For the reasons set out above, namely that the respondent failed to make the complainant aware of the deductions until 9th December, less than one week before his salary was paid on 10th December, I find that the complaint is well founded and none of the deductions should have been made.

Accordingly, the respondent should pay €3,220.86 to the complainant.

Written notification of the deduction