ADJUDICATION OFFICER DECISION
Adjudication Reference: ADJ-00032748
Parties:
| Complainant | Respondent |
Parties | Patrick Igoe | Tracematics Ltd. Trading as Rentalmatics |
Representatives |
| Gareth Kyne HR DUO |
Complaint(s):
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-00043261-001 | 26/03/2021 |
Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991 | CA-00043261-002 | 26/03/2021 |
Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994 | CA-00043261-003 | 26/03/2021 |
Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994 | CA-00043261-004 | 26/03/2021 |
Date of Adjudication Hearing: 26/10/2021
Workplace Relations Commission Adjudication Officer: Penelope McGrath
Procedure:
In accordance with Section 41(4) of the Workplace Relations Act, 2015 and following the presentation by an employee of a complaint of a contravention by an employer of an Act (or Acts) contained in Schedule 5 of the Workplace Relations Act of 2015, made to the Director General and following a referral by the said Director General of this matter to the Adjudication services, I can confirm that I have fulfilled my obligation to make all relevant inquiries into the complaint. I have additionally and where appropriate heard the oral evidence of the parties and their witnesses and have taken account of the evidence tendered during the course of the hearing.
In particular, the Complainant herein has referred the following complaints:
Two separate complaints of a contravention of Section 5 of the Payment of Wages Act, 1991, that is, a Complaint of an unlawful deduction having been made from the Employee’s wage. Pursuant to Section 6 of the said 1991 Act, and in circumstances where the Adjudicator finds that the complaint of a contravention of Section 5 aforesaid is deemed to be well founded, then the Adjudicator can direct that the employer pays to the employee an amount which is subject to the limits set out in Section 6 of the 1991 Payment of Wages Act 1991.
Section 5 of the Payment of Wages Act, 1991 sets out the instances wherein deductions can and cannot be made.
Section 5 (1) states that an employer shall not make a deduction from an employee unless:
The deduction is required by Statute or Instrument;
The Deduction is required by the Contract of employment;
The employee has given his prior consent in writing;
By way of preliminary observation, I am satisfied a Contract of Employment existed between the parties such that a wage defined by the 1991 Act was payable to the Employee by the Employer in connection with the employment. I further find that the Complainant’s Workplace Relations Complaint Form dated the 26th of March 2021 was submitted within the time allowed.
“Wages”, in relation to an employee, means any sum payable to the employee by the employer in connection with the employment, including –
- (a) Any Fee, bonus (bold added) or commission, or any holiday, sick or maternity pay or any other emolument referable to his employment whether payable under his contact of employment or otherwise, and
- (b) Any sum payable to the employee on the termination by the employer of the Contract of Employment without his having given to the employee the appropriate notice of the termination, being a sum paid in lieu of the giving of such notice.
The Complainant herein has additionally brought two Complaints under Section 7 of the Terms of Employment (Information) Act, 1994 in circumstances where a Contract of Service has commenced and where the said Employee employed by an Employer is entitled to have been provided (within two months of the commencement of the employee’s employment with the employer) with a Statement of certain Terms of the employment. The said terms are specified in Section 3 of the 1994 Act and include items such as names, addresses and place of work. There should also be a job title and a description of the nature of the work. The start date and the nature/duration of the Contract should be included in the statement as well as the terms of the remuneration. This statement should be dated and signed with copies retained by both parties.
In addition to the foregoing, The Employment (Miscellaneous provisions) Act of 2018 (s.7) amended Section 3 of the Terms of Employment Act 1994 so as to oblige Employer’s to provide a new Employee with a written Statement of certain core details (names, employer’s address, nature of Contract, remuneration and hours) concerning the employment within 5 working days of the employment commencing. Failure to provide core details after one moth of continuous service can lead to an award of four weeks remuneration.
The balance of Terms outlined in the 1994 Act have to be detailed within the two month period already specified.
This Terms of Employment (Information) Act, 1994 implements an EU Directive and applies to all persons working under a Contract of Employment or apprenticeship (whether on a fulltime or part time basis). It includes persons working through an employment agency where the party remunerating is responsible for the provision of the said Statement of Terms. The Act also provides that an employer must notify the Employee of any changes in the particulars already detailed in the Statement of Terms.
The complaint was made on the 26th of March 2021 and can only reference back to a six month period before that date.
The contravention first accrues the day after the expiration of the two month period for the provision of the Statement and every day thereafter. In the event of termination of the employment the right to bring such a claim will die six months after the end of the employment.
In circumstances where I consider the complaint to be well founded, I may require a Statement of Terms be provided. In addition, I am entitled to direct a payment of compensation up to the value of four weeks remuneration such that is just and equitable in all the circumstances.
Background:
The complainant issued a Workplace Relations Complaint Form on the 26th of March 2021. His complaint form states that he had two Contract based Bonuses deducted from his wages. In addition, he has made complaint that the failure to identify how Bonuses will be calculated (including on what discretionary basis) is a breach of his right to have the rate and method of calculation of his remuneration made known to him in his Terms and Conditions of Employment. To overcome the health concerns associated with face to face hearings in the course of the Covid pandemic, the WRC has been assigned the status of “designated body” under SI 359 2020 for the purposes of Section 31 of the Civil Law and Criminal Law (Miscellaneous Provisions) Act of 2020. This has allowed the hearing of this case to be held remotely. I confirm that this facility (on the WebEx platform) is organised and Hosted by the WRC. In line with the recent Supreme Court decision in the constitutional case of Zalewski -v- An Adjudication Officer and the Workplace Relations Commission and Ireland and the Attorney General [2021 ]IESC 24 (delivered on the 6th of April 2021) it is confirmed that this case may be attended by any member of the Public who may wish to attend (including where such attendance is at a remote hearing). In accordance with the Workplace Relations (miscellaneous Provisions) Act 2021 any person giving evidence in the course of this hearing was invited to make an affirmation solemnly declaring to tell the truth on the understanding that not to do so is a criminal offence punishable by operation of the Law. The option to swear an Oath (in lieu of Affirmation) was also provided where parties were in possession of such Holy Book as might be relevant to their own belief. |
Summary of Complainant’s Case:
The Complainant makes the case that his Employer unlawfully deducted performance-based Bonuses that were owed to him for the year 2020. The failure to pay those Bonuses, he says were justified on criteria not specified in the contract of employment. The Complainant was unrepresented and provided me with a full submission together with some supporting documentation. |
Summary of Respondent’s Case:
The Respondent vehemently opposes an automatic entitlement to Bonuses and states that the ability to assess performance when dealing with performance based Bonuses, lies singularly in the Respondent’s own remit. The Respondent had representation and I was provided with a submission in advance. |
Findings and Conclusions:
I have carefully considered the evidence herein. The Complainant commenced his employment with the Respondent company on or about the 1st of November 2019. The Complainant is an Engineer and was engaged by the Respondent Company which builds and creates software devices for installation on rental vehicles (mainly tourist cars) to allow them to be tracked at all times. I have had sight of the comprehensive Contract of Employment which both parties signed at the end of September 2019. The Contract, I note, specifically states that it is being given as a record of the Terms and Conditions of the Employment with the Respondent Company and in compliance with the Terms and Conditions of Employment(Information) Act 1994. I am satisfied that this constitutes adherence to this Statute. Of particular note is Schedule 1 attached to the Contract which sets out the basic rate of pay at €85,000.00 and which references a bonus as: €5K Performance and additional €5K Company Performance Bonus I accept that the language around this Bonus structure is not particularly detailed. There is no date as to when the Bonus might fall due. It does not state whether the Bonus will be pro rata based on performance or how any performance will be measured. It does not state if the Bonuses will be paid in a single lump sum or in tranches. The only thing that is clear, is that the Bonuses (both of them) will be measured against performance. I know and understand that many Irish companies offer performance-based Bonus schemes. These can be company based or individual based. Aligning elements of Employee financial compensation with the overall success and performance of the company is presumably to incentivise co-operation and teamwork in the workforce. Where a company performs well everyone reaps the reward. Equally important is the idea of Bonus reward for individual performance. This creates personal responsibility and incentive, and also protects the individual against the possibility of being dragged down by a weak team. From an employer’s perspective it is advisable that it is made crystal clear in the Contract of Employment or staff handbook that any bonus payment is at the sole discretion of the employer and will depend on the performance of the business and the performance of the individual employee. The Respondent Bonus scheme (as articulated in the Contract) includes both the personal and the company wide Performance elements. The Complainant commenced his employment on the 1st of November 2019. Four months later in February 2020 the Complainant was paid a lump sum of €2,000.00 which came out of the blue for him, and which was signalled to be his Bonus Payment. The Complainant did not expect it as there had been no performance review meetings. The Complainant was not advised as to what element related to Company performance and what related to personal performance. Nor yet was it clear if the Bonus payment was for the role he had played in 2019 (November and December) or right up to the date of receipt (February 2020). I accept that the complainant was entitled to infer that the Bonus was payable if an acceptable standard of performance was reached. A year later, by February 0f 2021, I accept that it was not unreasonable that the Complainant would expect that his next bonus must become payable. In terms of his personal performance, I accept that the complainant had performed in line with and perhaps above expectations. There was praise from his line Manager and up to two promotions in the course of that year. Again, there were not any formal performance reviews but there were no issues with the Complainant’s performance and the Respondent accepts this fact. After some negotiating between the Complainant and his Line Manger, the Complainant was notified that he would receive 80% of his personal performance bonus, but that no element of the company performance bonus would be paid. The Complainant was most dissatisfied and lodged a Grievance and an Appeal to the outcome of that Grievance. In considering the Complainant’s issue, I am obliged to be realistic and have consideration for the backdrop against which this company (and indeed every and all companies) was operating from February of 2020 to February of 2021. By this of course I mean the worldwide Covid pandemic which had brought all activity to a shuddering halt. Even without a close analysis of the books and accounts of the Respondent company, I have to acknowledge that this Company - invested as it was in the tourist trade – was severely impacted by the sudden and extreme downturn in business. At the hearing before me, the Respondent company shared it’s abridged Accounts for 2020 which included a nine month period of near shut down. It is clear from these Accounts that the Company had sustained an enormous loss in 2020. I am happy to accept that the losses continued into 2021 and, indeed, it may be another while yet before the company operates at it’s 2019 rates. I do not accept the complainant’s assertions that the Company was performing well and I do find the fact that the company availed of and was given Government emergency intervention for a three or four month period to be evidence of the dramatic downturn in the company fortunes. On balance, I am therefore finding that the company was entitled to decide to not pay the €5,000.00 Bonus which related exclusively to the performance of the company. I accept that if Company Performance is poor then there can be no performance-based company bonus. That discretion is automatically built into the clear understanding of how performance-based Bonuses operate. However, by the same token, I have not heard any evidence which explained why the complainant’s individual performance-based Bonus was reduced. As I have already accepted that the Complainant’s performance for the twelve-month period in question was above par, there can be no justification for having reduced that element of the Bonus structure. On balance I am also minded to accept that the Company could have avoided the difficulties that have arisen herein, if the Contract of Employment had given clearer detail on how the rate and/or method for calculating the Bonus component of the Complaint’s wage was to be calculate.
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Decision:
Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint(s)/dispute(s) in accordance with the relevant redress provisions under Schedule 6 of that Act.
Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991 CA-00043261-001 -The Complaint herein is not well founded Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991 CA-00043261-002 -The Complaint herein is well founded, and I direct that the employer pays to the employee an amount of €1,000.00 Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994 CA-00043261-003 – The Complaint herein is well founded insofar as there was limited detail on how the Bonus would operate and I direct that the payment of €100.00 be made to the Complainant Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994 CA-00043261-004 – The Complaint herein is not well founded as core terms were known
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Dated: 22nd November 2021
Workplace Relations Commission Adjudication Officer: Penelope McGrath
Key Words:
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