Complainant

Respondent

Parties

Ken  Foley

Southside Taverns Limited Molloy Group

Representatives

  Self

 HR Manager and Financial Director

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-00040191-001

30/09/2020

The complainant commenced employment with the respondent in November 1996 and is currently in the role of Internal Auditor and Security Manager.  His current salary is €4,300 gross per month and is also paid an annual bonus of €2,500.  In September 2020 he received an e mail stating that his annual bonus would be reduced by 20%. He did not have any discussion in relation to this and he did not consent to this.  The complainant believes that this deduction is unlawful under the provisions of the Payment of Wages Act, 1991.  He submitted his complaint to the Workplace Relations Commission on 30/09/2020.  The respondent believes that it was justified in reducing the bonus as it is performance related and the directors were dissatisfied with aspects of the complainant’s performance in 2020.

The complainant was appointed to his current role in September 2015.  His salary and bonus payment were confirmed in an accompanying letter dated 07/09/2015.   Bullet point three of this letter stated: “That you will be paid an annual special payment of €2,500 based on performance and following a review meeting with Ms A and myself.”  On 25/09/2020 the complainant received an e-mail with stated “We are deducting 20% from your bonus which means you are being paid €2,000 on September 25th.”  This was the first time the complainant was aware of the deduction and the complainant did not receive any communication in relation to performance related matters.  The complainant submits that he was regularly told that his work was “of an excellent standard and first class.” 

The complainant commenced his employment with the respondent in November 1996 and worked closely with directors in relation to implementation of systems, leading stocktaking teams and the specification and design of security and CCTV systems. At all times he took on extra roles and contributed to the success of the group.  The complainant took issue with many of the points raised in the respondent’s submission and in particular issues such as random cash counts, a broadband issue, the interpretation of events in May 2020 and the tone of some e mails.

The complainant submits that he was not included in or informed about any discussions in relation to his annual bonus or his performance.  His workload was not reduced by 20% but it is his view that it increased by “at least 100%” and he kept senior management appraised of this on many occasions.

The deduction and the manner in which it occurred is unlawful under the provisions of Section 5 (1) of the Payment of Wages Act, 1991.

The complainant is employed in a management position within the group and his job title is Internal Auditor and Security Manager.  The complainant’s contract of employment and accompanying letter which confirmed his bonus made it clear that this bonus was “performance related.”  The complainant’s job description made it clear that certain tasks were his responsibility.  In particular it was highlighted that “Statistical Analysis of Stock Results” and random cash counts were an integral part of the role.  There were issues in relation to how the complainant dealt with a broadband issue in a particular store and the respondent was concerned about the potential seriousness of this as the store was reliant on a back up system.  It was submitted by the respondent that the complainant did not deal with this proactively.  A further issue arose in May 2020 in relation to an e mail the complainant sent to store managers at a time when they were under pressure due to the pandemic environment which prevailed.

The respondent had a discussion with senior management and it was agreed that paying 100% bonus to the complainant would send a wrong message.  The group directors were dissatisfied with aspects of his performance.  It should not have been a surprise to the complainant that there were performance issues this was apparent from the various e mail exchanges with his manager.  The decision to reduce his performance related pay by 20% was fully supported by the Board of Directors.

The complainant and respondent made written submissions in relation to this complaint.  There was also oral evidence provided at the hearing. I have carefully considered and evaluated the submissions and evidence adduced in reaching my determination as set out below.

In his claim the complainant submitted that the respondent made an unlawful deduction from his wages.  Section 1 of the Payment of Wages Act, 1991 defines wages as:

“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 this employment, whether payable under his contract of employment or otherwise,”

Deductions made by an employer from the wages of an employee are set out in Section 5 of the Act as follows:

“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.”

Having carefully considered the circumstances involved in the within case I am satisfied that the reduction of 20% of the complainant’s bonus in September 2020 represents a deduction from his wages.

Taking into account the application of Section 5 (1) (a) as outlined above, I am satisfied that the deduction was not required or authorised by any statute or instrument under statute.

Taking into account the application of Section 5 (1) (b) as outlined above, I am satisfied that there is no term or clause in the complainant’s contract of employment dated 07/09/2015 which explicitly required or authorises a deduction from his wages or makes any reference to the likely circumstances in which such a deduction might occur.

Taking into account the application of Section 5 (1) (c) I am satisfied that the complainant did not give his prior consent in writing to the deduction from his wages.

In view of the above findings I must now consider the issue of redress which is outlined in Section 6 (1) of the 1991 Act as follows:

6 (1) “A decision of an adjudication officer under Section 41 of 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)                the case the complaint related to a payment, were paid to the employee in respect of the week immediately preceding the date or payment, or

(b)    If the amount of the deduction or payment is greater that the amount referred to in paragraph (a), twice the former amount.”

There is no dispute between the parties in relation to the actual sum which was deducted from the complainant’s wages.  In that context I find the sum of €500 to represent reasonable and appropriate compensation for the complainant.

Having carefully considered all of the evidence adduced and based on the findings and conclusions detailed above, I find that the complainant’s complaint under the Payment of Wages Act, 1991 to be well founded and I direct the respondent to pay the complainant the sum of €500 gross.  This amount is subject to the normal statutory deductions in relation to pay.  This amount is to be paid no later than six weeks from the date of this determination.

Bonus payment.  Performance.