Complainant

Respondent

Parties

Keith  Logue

Alucard Limited trading as Clanree Hotel

Representatives

Fiona Kelly, Fiona Kelly Solicitors

Terry McNamara, IBEC

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-00042011-005

15/01/2021

The Complainant was the head chef in the Respondent Hotel. In accordance with his contract of employment in addition to his salary he was paid a bonus (at the conclusion of) each quarter. When he left his employment on 29 July 2020 there were three outstanding quarterly bonus payments due to him, ie a total of €6000.00

The Respondent contends that there is no jurisdiction for these complaints to be considered, as the claims are out of time.

If it is necessary, the Complainant seeks an extension of time on the basis of reasonable cause.

The Complainant additionally brought a claim for pay in respect of overtime however he conceded at the hearing on 1 November 2021, that this complaint was out of time and was withdrawn.

The Complainant was a head chef in the Respondent hotel.

In 2018 following requests for a pay-rise, the Complainant signed an agreement with the Respondent that he would, in addition to his salary, be paid a bonus at the conclusion of each quarter. This bonus was €2000 and was payable in cash. The terms of this agreement were not conditional or subject to any work performance or other conditions - it reflected his high standard of his work, his long service with the Respondent and additional cover work that he did at other hotel properties belonging to the Respondent.

The Complainant contends that the bonus payments were often paid late and the Complainant needed to remind the General Manager when he had not been paid. His evidence was that the last bonus payment (for the period June – September 2019) was not paid until 1st December 2019, ie when the next instalment was due. For this reason, it was difficult for the Complainant to identify when he expected to be paid his bonus or the date upon which when it could be said that the contravention occurred. He gave evidence that he first asked for the September- December 2019 bonus in February 2020, because at that point he believed that he should have been paid, but that he repeated this request for the duration of his contract of employment.

By letter dated 14 September 2020, the Respondent, wrote to the Complainant’s solicitor, conceding that the Complainant was entitled to and would be paid a bonus “for up to December 2019” and that €2000 was available for him to collect.

In respect of the three bonus payments that are subject of this complaint; Sept – December 2019; January – March 2020 and March to June 2020, while the Complainant accepts that some of these may be outside the 6 months jurisdictional limit (the WRC complaint being issued on 15 January 2021) if it is necessary he requests an extension of time to allow the claims to be brought on two  bases; first, because the bonus payments were paid late it is not possible for him to accurately identify when the contraventions occurred and secondly in respect of the Sept- Dec 2019 bonus the Respondent conceded it in September 2020. This allowed him to believe that the payment wouldn’t be an issue.

The Complainant ended his employment on 29 July 2020 at which point the payment of three bonuses remained in dispute although, as already stated, in September 2020 the Respondent conceded that one payment would be made to him, that relating to the September – December 2019 period.

In response to the substantive defence by the Respondent - that the bonus was subject to three conditions, which could not be fulfilled when the hotel was closed– the Complainant denies that there were any conditions attaching to the bonus. The bonus was simply a device that the Respondent used to increase the Complainant’s pay from 2018 onwards, by paying him cash, while not increasing his salary on the payroll. In this respect his bonus was part of his salary.

The three key performance indicators were matters that the Complainant did anyway, as part of his job, but they were not conditions for the payment of the bonus.

While the Complainant accepts that the Respondent paid him and some other senior staff, their full salary during Covid lockdown when time the hotel was closed, which they were not obliged to do, that in deciding to pay him his salary, they should have also paid him the bonus, because this was part of his salary.

The Complainant seeks an extension of time if same is necessary and seeks the payment of three unpaid bonus payments.

The Respondent contends that the complaint is out of time and has no basis in substance.

On the preliminary point the Respondent contends that the bonus for September – December 2019 was due to be paid on 1 December 2019 and is out of time. The Respondent further contends that this bonus was in fact paid on 1 December 2019.

In respect of the bonus for January – March 2020, the Respondent concedes that this is owed to the Complainant, but he has not collected it.

In respect of the bonus claimed for March – June 2020 the Respondent contends that the conditions of the bonus were not met and also that his full salary was paid to him during lockdown when the hotel was closed even though he was not required to work at this time. He was not put on the PUP social welfare as other staff were. In circumstances where he received wages when he was not working and which he was not entitled to receive, this should be set off as against any bonus payment being claimed in respect of this period.

Furthermore, the Respondent contends that the bonus was subject to three key performance indicators. These were:  profitability of kitchen sales; cleanliness of kitchen and maintenance of existing kitchen staff salaries. These conditions were agreed verbally but it is accepted by the Respondent’s general manager that the written agreement, did not include these conditions. With respect to the third bonus claimed, for March – June 2020 the Respondent contends that this payment is not due because the hotel was closed during this period and one of the key indicators (profitability of kitchen) was not met due to the lockdown.

The Respondent denied that bonus payments were paid late. The September – December 2019 bonus was paid to the Complainant on 1 December 2019 and the Complainant signed a receipt to this effect, which was produced in evidence. The bonus was payable and was paid at the start of every month. The Respondent denies that the payment made on 1 December 2019 was a late payment for the June- September 2019 bonus.  The Respondent disputes that the September- December 2019 bonus was expected to be paid in early 2020, because it had already been paid. As a result, this complaint is both out of time and has no basis in substance. The letter dated 14 September 2020 wherein the Respondent’s HR manager wrote that the bonus payment for the period up to December 2019 was written in error. It should have stated for the period January – March 2021. The HR manager no longer works with the Respondent.

The Respondent accepts that a bonus of €2000 is due to the Complainant and it is for the period January to March 2020. This amount has always been available but the Complainant has not collected it.

The complaints are all out of time, reasonable cause has not been shown and the complaints are unfounded.

This is a case in which the difficult stresses caused by the Covid lockdown on both worker and employer are laid bare.

The conflicting evidential account of each side is dispiriting, given the long and successful employment relationship that existed prior to the Complainant’s departure on 29 July 2020.

The first decision to be made is whether there is jurisdiction to determine this matter and in respect of this matter, I find that I have.

I find the evidence of the Complainant  - that bonus payments were regularly paid late combined with the letter dated 14 September 2020 wherein the Respondent HR accepted that the September – December 2019 bonus had been not paid, supports the Complainant’s contention that the payments were paid late and that the bonus paid on 1 December 2019 pertained to the third quarter and not the last quarter of 2019. It follows that as the bonus that was not paid in 2019 carried into 2020 to be paid (and thereby into the 12 months extension period, if this is required.)

I accept that the September – December 2019 bonus was due some time in early 2020.

However,  when did the contravention, under the Payment of Wages Act 1991,  occur?

While the 2018 contract stated that the bonus was quarterly, it did not specify a date on which it would be paid and because in practice it was paid late, I accept the Complainant’s evidence that it was not possible to determine a precise point on which the contravention occurred.   Then in September 2020 the Respondent conceded in writing that the bonus to up to December 2019 was owed to the Complainant, which made him believe that it was not necessary to bring a complaint to the WRC about this bonus. It was only after the WRC complaint was brought that the Respondent sought to revise what the 14 September 2020 letter referred to.

In respect of the claims for the two later bonus claims; for periods January- March 2021 and March to June 2021, these payments were payable sometime after March 2021 and sometime after June 2021.

I find that because the 2018 agreement was unclear and because I accept the Complainant’s evidence that the bonus payments were paid late (which is corroborated by the 14 September 2020 letter) I find that it was not possible for the Complainant to identify a specific date when the contravention occurred.  As a result,  I must find that the contravention continued for the duration of the dispute, until he left his job on 29 July 2021 at which point time then started to run.   Due to the ambiguity over when the bonuses were payable, I find that the contravention date for each failure to pay, persisted until the contract ended in circumstances where each contravention date was not readily identifiable.

As a result,  I find that the complaints were brought within the 6 month time limit and that there is no necessity for an extension of time to be given.

Substantive Complaint

As the wording of the bonus agreement does not contain the conditions as contended for by the Respondent and because the Complainant was corroborated by documentary evidence whereas the Respondents evidence was not, I find the evidence of the Complainant to be more persuasive than that of the Respondent and I do not accept that the bonus was subject to three key performance indicators. I find that the payment was made akin to a salary payment.

On the basis of the contents of the Respondent’s letter of 14 September 2020, I find that the sum for September – December 2019 is conceded and, in these circumstances, I find that the failure to pay this was an unlawful deduction, I find this claim to be well founded I award the Complainant €2000.

In respect of January – March 2021, as the bonus for this period, was not paid and the agreement entitled the Complainant to be paid a bonus, I find that the failure to pay the bonus was an unlawful deduction.  I find this claim to be well founded and I award the Complainant €2000.

In respect of the period March – June 2021, I do not accept the Complainant’s was entitled to be paid a salary never mind a bonus when the hotel closed from March – June 2021 during which the Complainant worked only from May onwards. His evidence was that he worked for the four weeks prior to reopening in June 2020. However, he received a full salary from the end of March and all of April (a minimum of five weeks) when he was not working.  Most other workers during this time were reliant on a social welfare (PUP) payment. It went beyond the Respondent’s obligations to pay the Complainant his full salary when the hotel was closed and where he was not required to attend work. I am not satisfied that the Complainant has adequately made out an entitlement to either a salary or bonus beyond that which he received, and I do not accept that an unlawful deduction was made by the failure to pay a bonus in respect of March – June 2021. I do not find this portion of the claim to be well founded.

I note that the complaints in respect of unpaid overtime are withdrawn

I find that the complaints are made within time.

For reasons stated above I find that I find the complaints (that two bonus payments were unlawfully deducted from the Complainant’s pay) are well founded and in respect of this I award the Complainant a total of €4000.

Payment of Wages 1991 – Payment of quarterly bonus –ambiguous contract and payments made late – contravention continues until end of contract