Complainant

Respondent

Parties

Pjotrs  Ivahno

Galway Clinic Doughiska Limited

Representatives

  Complainant

Stephanie O'Carroll Purdy Fitzgerald Solicitors

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-00043416-001

06/04/2021

The complaint is concerned with a disputed interpretation of the statement of terms of employment and the related policy of educational/research grant. The Complainant gave evidence under affirmation. The submission on behalf of the Respondent was one of a technical nature related to the meaning and application of the contracted terms and the policy. No evidence was called on behalf of the Respondent.

 The Complainant was employed from August 2015 as a resident medical officer. His employment ended on the 17th of October 2020 upon his resignation. The amount claimed as withheld is €4,378.41 as per the complaint form.

Summary of Complainant’s Case:

The Complainant provided a copy of his contracts of employment including an extension of the employment relationship on 11th June 2020 which stated that other than the extension of the contract the other conditions of the employment remain unchanged. Section 10 of the statement of terms of employment is the term covering the education/research grant:

“Provided you are working on average four shifts per month (minimum 11 hours per shift), you are entitled to access an educational/research grant to the value of €3,500 per year. A pro rata amount is paid should you work for less than 12 months. This grant is cumulative to a maximum of three years. Full details of the terms and conditions of and entitlement to this are available from the RMO Coordinator.”

During his employment the Complainant stated that he had accessed the grant system. In addition to the entitlement and terms of calculation set out in the statement of terms of employment, the educational/research grant scheme states under using the grant:

“1. The grant may be used at any time once eligibility to the grant is established, and the grant is claimed during the course of employment or within three calendar months of cessation of employment.

2. The grant is maintained for three months following the cessation of employment, i.e., an R.M.O. whose employment ceases may apply for grant claims (assuming there is remaining grant) for up to three months from the date employment ceased.

3. In the event that an R.M.O. resigns his post at Galway Clinic or has his employment terminated (for whatsoever reason) or during his employment he fails to maintain an average of four LONG shifts per month, the grant entitlement will be recalculated as follows: for each full or part month that the R.M.O. has worked less than 12 months or for each month in which he did not work a minimum of four long shifts (averaged over the 12 month period) a deduction will be made from their grant entitlement. The deduction will be based on a notional monthly grant of €3,500 divided by 12. If an R.M.O. spends more than his calculated grant entitlement and is reimbursed by Galway Clinic for this amount, the additional amount spent will be deducted from his final pay cheque. The notional monthly grant (€3,500 divided by 12) will be used to calculate the appropriate amount.”

The Complainant stated that it was clearly his understanding that the grant application could be made and paid after the employment ended based on the terms of the scheme. In January 2021 he did contact the Clinic explaining that there was a difficulty in accessing courses due to Covid. This was set out in an email dated 11th January 2021 at 12.37 in which he said:

“Due to the pandemic, there are limited options for education at the moment. I’m presuming this month until 15/16 is when I need to submit the study grant application. Correct me if I’m wrong.”

The email concluded: “Nevertheless, I just want to know what my situation with the grant is and if any extension can be made”. A reply on 13th January 2021 at 17.25 from an LOH was that “the closing date for expenses is the 15th so it would need to be with JJ prior to that for signing off on them. I will follow up with JJ about an extension and will get back to you on that.”  The email then went on to say that the official leave date on the system was as of the 17th of October. The Complainant provided a snapshot of approval for a diploma MSc admission confirming that his application was approved dated 14th January 2021. This was one of a number of courses which he had considered, and this is the one that was approved at that time. He also provided copies of WhatsApp messages and exchanges with a Mr John Byrne which explained to him that the advice from HR was that he was not entitled to the payment as he had left the employment. He also provided copies of emails which he sent to Mr JJ Beirne and a Mr Moylan whose title was not provided. In an email of 15th January 2021 at 17.59 he summarised a conversation with Mr Beirne as follows:

“1. You haven’t written the RMO study grant guidance document, it was RMO Coordinator before John Beirne.

2. Quoting you “not everything is written on paper” (re the guidance), and to get full details about the grant RMOs should speak to you directly to find out what the full terms of the study grant are.

3. You believe it is not fair to claim anything after cessation of work in Galway Clinic.

4. You believe the fact the guidance document stating “expenses can be claimed during employment and for the three months” can and should be interpreted as expenses must incur during the course of employment and not after cessation of it.

5. You believe the fact the guidance document does not explicitly state expenses must incur only while employed in order to be claimed for up to three months after cessation of work is not misleading.”

In his response of the 20th of January Mr Beirne stated:

“In our conversation, we had different interpretations of the terms of the study/research grant. My view is that any study must be completed whilst in employment whilst your view is that it can be claimed for study completed up to three months after leaving employment. In any case all claims must be approved in advance and claimed within three months of employment, as per the guidance document which I have attached for your information.”

At the hearing the Complainant stated that in light of the communications from Mr Beirne and Mr Byrne both of which were telling him that he could not claim the money because he had left the employment, he did not formally submit the application because he was being told there was no point in doing so. He stated in his submission:

“I had an application finalised with the payment link on hand for the payment to be made within the specified three months. At that point pending the provisional approval I was refused the grant.”

He said the policy as interpreted by HR was never communicated by any means and was presented as an unwritten policy despite being contrary to the written policy. The course he was applying for was an MSc in medicine and this kind of expense had been repeatedly claimed and approved in the past.

The contract of employment refers to an entitlement to access an educational/research grant, the full details of which were available from the RMO Coordinator. There is a grant rules document which identifies who is eligible for a grant, the value and uses of same and how to claim the grant. The document states that the grant is discretionary as per the RMO Coordinator and/or HR Manager and must be approved by Galway Clinic Finance Department. The document also informs parties to send in a completed application form to the RMO Coordinator/medical for approval from which the person would be notified as to whether same is approved or not. It clearly states that “Approval is neither automatic nor granted retrospectively. You must get approval before incurring expenses.”.

On 28th October 2020 the Complainant emailed the Respondent regarding his resignation from the organisation. Within that email he sought confirmation on the educational grant and how to receive it after resigning from the Clinic. There was a response on the same date. The next contact the Respondent received from the Complainant on this matter was an email dated 11th January 2021 in which he appeared to state that he had no course in mind to seek approval of and he was in effect seeking confirmation as to whether or not the deadline of three months may be extended. The matter was then passed over to the Human Resources Manager of the Respondent from which a telephone conversation took place on the 15th of January 2021 where the HR Manager expresses his opinion that while the grant may be claimed up to three months after leaving the Respondent’s employment, that the expenses should have been incurred while duly employed. No approval of any expense was sought, and no receipts were submitted. On the complaint form to the WRC the Complainant gives a date of 25th January 2021 for date of payment, however this is outside the three months provided for in the grant scheme for any allocation.

Legal arguments

The Respondent set out the definition of wages at section 1 of the Payment of Wages Act as: “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.”

The argument was made that a discretionary grant payment does not fall within the definition as laid out by the Act. In support of this contention, it was submitted that expenses are outside the scope of the Act where it says:

“Payments shall not be regarded as wages for the purposes of this definition (1) any payment in respect of expenses incurred by the employee in carrying out his employment.”

 As part of the grant programme applicants must submit receipt expenses as part of the grant allocation and therefore these funds are clearly outside the scope of the Act.”

“The Complainant states he is automatically entitled to a monetary grant benefit and seeks discharge of same, outside of the time limits laid down by the grant rules. This is clearly not supportable. We have demonstrated that firstly, the grant is discretionary, secondly, prior approval of a subject matter must be obtained in advance, and this was not done, thirdly, the Claimant was clearly out of time as per scheme rules and no such application was ever submitted. As stated, the sum sought does not fall within the definition of wages.

The contract of employment is the primary source of an employee’s entitlements and the employer’s obligations in relation to remuneration and conditions of employment. These are matters that must be agreed at the commencement of the employment and are the most essential elements of the bargain entered into between the parties. Unless there is an agreement to change the agreed terms, they are seen to endure. The contract or statement of terms entered into by the parties in this case sets out the essential elements of the bargain involving for the purposes of the complaint, the formula to be used for the calculation of annual leave. Section 5 of the Act of 1991 prohibits an employer from making deductions except in accordance with the provisions of that section. These include:

“(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.”

None of these considerations arise in this case. While the Act refers to payments effectively during a period of employment, the interpretation of the Act applies to deductions or payments payable arising from the contract at the time of the termination of employment even where that payment falls due after the termination of the employment relationship. 

In concluding whether a complaint under the Payment of Wages Act 1991 concerned with a deduction has merit, the primary consideration is whether the disputed payment was “properly payable”. The importance of this test was central to the decision of the High Court in Dunnes Stores (Cornelscourt) Ltd v Lacey [2007] I.R. 478 which ultimately overturned the decision of a Rights Commissioner and the Employment Appeals Tribunal:

“I am satisfied upon careful perusal of the documents relied upon by the respondents that same cannot represent the agreement or an acknowledgement of the agreement contended for but rather contain a clear denial of the existence of any such agreement. No other evidence of an agreement was proffered. In these circumstances I am satisfied that the Employment Appeals Tribunal erred in law in failing to address the question of the remuneration properly payable to the Respondents, such a determination being essential to the making by it of a determination.” [emphasis added.]

This was one of the reasons on which basis the appeal in that case was allowed. The fundamental requirement to consider and apply the term “properly payable” in respect of deductions or payments withheld was further endorsed by the High Court when allowing in part an appeal of a decision of the Labour Court in Marek Balans v Tesco Ireland Ltd [2019 No. 83 MCA] where, in remitting a decision of the Labour to that body the High Court stated that:

“Central to the Court’s analysis must be the concepts of wages properly payable and the circumstances in which if there is a deficiency in respect of those such payments, it arose as the result of an error of computation. An error of computation does not arise in this instance.”

The High Court in relying on the decision in Dunnes Stores went on to say that the decision supports the proposition the first matter which should be addressed by the [Labour Court] is to determine what wages are properly payable under contract.

That the conclusion of the High Court in the Balans case that the Payment of Wages Act 1991 does not allow for the rectification of an error in a contract by way of unilateral repudiation of the contract by the employer or respondent is consistent with the decision of the adjudication officer at first instance in the Balans case where he stated:

“Nevertheless, it is difficult to see grounds why this should be set aside because of such a unilateral mistake. There is nothing unconscionable about a rate of pay €11.87. I accept the evidence that this was not a prevailing rate of pay in the respondent, but it was the rate of pay inserted into the contract. The complainant did not contribute to the respondent’s mistake. Applying the doctrine of mistake, there is no basis to set aside the binding nature of the basic rate of pay as €11.87 per hour.”

That adjudication officer also referred to section 4 of the Act of 1991 and stated:

“Section 4(3) cannot be extended to apply to errors relating to wages and statements issued pursuant to s.3 of the Terms of Employment (Information) Act or in the contract of employment. There is no statutory provision which enables the employer to set aside a contractual term even where there is an error made in good faith.”

Neither the Labour Court nor the High Court disagreed with that finding on the part of the adjudication officer. In summary, in this case the contract forms the basis of the primary source of the Employee’s entitlements and the Employer’s obligations in relation to remuneration and conditions of employment.

There is no provision within the Payment of Wages Act which allows an employer to vary an employment contract unilaterally and neither does it fall to this decision maker to set aside the terms of the contract.

Allowing that the commitment regarding the payment of an education/research grant to a former employee to commence after the employment relationship is probably quite unusual and may not have been intended-the decision of the Respondent in this case to apply their own meaning to the plain reading of the contract terms as provided for in the relevant policy on the basis that “ not everything is written on paper” (email confirming conversation sent by the Complainant on Janury 22nd and not disputed). It is significant that on October 28th and after his resignation on 17th October 2020, the Complainant checked with the Respondent regarding his outstanding entitlement under the policy and the reply from Head of HR was unambiguous ‘I have attached the grant rules. Peter has €4378.41 remaining at31/10/2020.’Furthermore, when the Complainant next contacted the HR, in January 2021, it was initially to enquire about an extension of the three-month period-and another person in HR indicated she would enquire about the extension. On neither occasion was there any indication to the Complainant from HR that claims under the scheme could only be considered where they were initiated during the employment relationship. On the balance of probabilities therefore one individual decided that the policy was not to be interpreted as written but, in another fashion, not expressed in the contract and not expressed in the terms of the policy and not previously advised to or agreed with the Complainant. This position, of a one sided manifestly new term was in effect, a decision to vary the terms of the contracted arrangement unilaterally.

There is no provision within the Payment of Wages Act to vary that contract unilaterally by the Respondent and neither does it fall to this decision maker to set aside the terms of the contract.

Having found that the terms of the contract as written were not open to an interpretation which had the effect of setting aside those terms, there remains the other issues raised on behalf of the Respondent at the hearing, but not at the time the decision to refuse the Complainant application was made.

Consistent with the decision in the Balans, the question arises as to whether the amount deducted by the respondent was properly payable under the terms of the contract. This refers in the first instance to the contention on behalf of the Respondent that the payment claimed represents expenses and as such is not covered by the interpretation of wages under the Payment of Wages Act. With respect, this contention is rejected. The basis of the contention appears to rely on the final line of the policy which forms part of the contracted terms where it says: ‘You must get approval before incurring expenses and Original receipts for approved expenses should be attached to your claim. Original receipts must show the amount paid, to whom and by whom it was paid and to whom the service or product was delivered. i.e., books services or products delivered to a name or address other than to the R.M. O’s will not be paid by the Galway Clinic.’

However, the policy and contract provide for educational/research grants and the amount payable and accrued directly relates to hours worked on long shifts and moreover can be deducted from the final pay cheque of the RMO if an overpayment is made during the employment arising from an overcalculation related in part at least to the shifts worked or not worked.The term expenses as used in the Payment of Wages Act expressly refers to expenses incurred by an employee in the course of their work, which has quite a different meaning to a training or educational or research grant. If the interpretation of the Respondent in this case were to be accepted simply because the policy uses the word expenses in one part, it would potentially place any payment under a contract where training or education grants or costs are provided as part of that contract outside the scope of the Act-and such a proposition is at variance with the wording of the Act itself. The finding in this aspect of the case is that the research /education grant represents an emolument for the purposes of the definition of wages and as such falls within the scope of the Act. In this contract the grant formed a part of the contingent or indirect remuneration package of the Complainant.

The final points made on behalf of the Respondent to be considered are those where it is contended that the Complainant did not actually seek approval for a payment within three months and in any event any approval for a payment is discretionary. The material provided by the Complainant shows him clearly indicating to a named person, the nature of the programme he wished to complete and initially being told he should get the claim in on time-within the three months which he was told would end on January 17th, 2021. Before he could make the formal application however, he was later informed that he had no access to the policy that a decision was made and conveyed to his contact within the Clinic (who was very apologetic) that the scheme did not apply to him as he was no longer in employment. In these circumstances, it was the Respondent who failed to apply the terms of the scheme, varying the terms of the contracted terms unilaterally and confirming that those terms as written did not mean what they said and in effect, withheld or deducted payment prior to reviewing the application for the specific course for which the Complainant had been approved by an educational provider. The Complainant was denied the terms of the contract and access to the scheme. For the Respondent now to endeavour turn their own decision and notification to the complainant that the scheme did not apply in his case against him is an extraordinary stretch in their argument. Access to the scheme and therefore the payments accrued by the Complainant were denied by the Respondent before the expiry of the three months period referenced in the scheme. They cannot legitimately rely on the same scheme and its provisions in their defence and hold them against the Complainant. It follows therefore that the Respondent cannot retrospectively rely on the discretionary element of the scheme since it was, they who refused to apply the terms of the scheme in the first instance.

Having concluded that the contentions of the Respondent are not well founded, it follows that the complaint brought by the Complainant is well founded. There remains the question of what is to be paid by way of compensation. The relevant part of Section 6 of the Act is 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) in case the complaint related to a payment, were paid to the employee in respect of the week immediately preceding the date of payment,

or

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

In arriving at a figure of compensation which is reasonable in the circumstances, the fact that the Complainant did not incur any costs because of the decision of the Respondent and that in effect any compensation at this juncture is simply that and may not necessarily be used by him for the purposes of education or research is a consideration. At the same time, he was denied the terms of his contract and support for a named medical related educational programme.  A sum of €2000 nett compensation is considered reasonable in the circumstances.

CA-00043416 Payment of Wages Act,1991 The complaint brought by the Complainant - Pjotrs Ivahno against the Respondent - Galway Clinic Doughiska Limited is well founded. The Respondent is to pay the Complainant €2000 nett in compensation

Non-payment of terms of contract