ADJ-00027659

Complainant

Respondent

Parties

Marcin  Lach

Cregg Stone Limited

Representatives

Richard Stapleton Richard Stapleton Solicitors

 Ms.Cregg

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-00035426-001

25/03/2020

Complaint seeking adjudication by the Workplace Relations Commission under section 77 of the Employment Equality Act, 1998

CA-00035426-002

25/03/2020

The claimant was employed as a labourer with the respondent from the 24th.April 2017 to the 24th.June 2020.He complained that the respondent was in breach of the Act by deducting an aggregate amount of €11,688 without his authorisation. This was denied by the respondent who submitted that there was no breach of the Act, that he was paid in accordance with the REA, that these deductions were authorised by his contract and that the claimant did not pursue the matter while in the employment.

It was submitted that the aggregate deduction of €11,688 was unlawfully deducted from the claimant’s pay , that it was not provided for in his contract and that when he enquired about the nature of the deduction , he was informed via email that “ every employee pays this”.It  was submitted that these deductions were unlawful and in breach of the Act.In a post hearing submission it was advanced that 2 versions of the claimant’s contract existed – Version 1 was the Polish contract  which was signed by both parties and recorded deductions of travel expenses of €90.00 per week .It was submitted that the respondent was unable to provide an explanation as to how the figure was arrived at – not withstanding that reference had been made to accommodation and provision for tools and equipment. It was submitted that Version 2 was a Polish contract signed by both parties had €0 inserted in the contract in respect of deduction for travel expenses. The claimant denied receiving an explanation with respect to travel expenses prior to signing the contract and contended that the contract he signed referred to €0 following the clause regarding travel.

It was submitted that even if the deductions were allowed under contract, the reference related only to travel expenses and not accommodation or equipment. It was submitted that the respondent had failed to provide any explanation for this €90 figure and that if an employer is to charge for the provision of goods and services, the amount charged should be related to the cost of provision of such a service. It was contended that the contract was altered post execution and that “ it did not allow for arbitrary deductions to be imposed on the claimant which have the effect of subsidising the Respondent and allowing them to compete for work more competitively at the employees expense”. It was submitted that the claimant should be entitled to recover all monies unlawfully deducted bearing in mind the exceptional difficulties the claimant had in getting any explanation for the deductions. It was submitted that due consideration should be given to the credibility of the parties with regard to the existence of 2 practically identical contracts in Polish and it was argued that it was not credible that the claimant would unilaterally amend the contract and start raising the issue with the respondent with respect to the deduction. It was submitted that “ It may be that the Respondent had intended to insert it (the deduction) into the contract prior to execution but it did not and the claimant’s version of the contract supports that it was not so included at the time of execution”. It was further submitted that the deduction was not provided for in the REA and that the implementation of the deduction effectively reduced the hourly rate and accordingly breached the REA.

It was submitted that the claimant trusted the employer to effect only lawful deductions and that it was only when he got legal advice that he discovered the deductions were unlawful.

The claimant having made an affirmation, stated that he only got the Polish version of the contract and that he signed it in the presence of his brother. He stated that he raised the matter of emergency tax on commencement of his employment and that he spoke to the managers on site on numerous occasions about the deductions. He advised that he pointed to the €0. reference in the contract to the Wages Clerk and that she replied there should be a 9 before the zero. He said the contract he signed referred to €0 and there was no reference to accommodation. He stated he never signed up to being a trade union member and that he never received any documentation from BATU. He continued to raise deductions with the employer when holidays arose as the deductions continued even though no expenses arose while he was on leave. Under cross examination, the claimant stated he gave all of his documents to his solicitor. When asked why he did not put his grievance in writing the claimant stated that it was because of fear of being naïve and because of the language barrier. 

The claimant’s representative made the following supplementary submission on the matter of jurisdiction after the hearing: 

 6.—(1) An employee may present a complaint to a rights commissioner that his employer has contravened section 5 in relation to him and, if he does so, the commissioner shall give the parties an opportunity to be heard by him and to present to him any evidence relevant to the complaint, shall give a decision in writing in relation to it and shall communicate the decision to the parties.

(2) Where a rights commissioner decides, as respects a complaint under this section in relation to 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 well-founded in regard to the whole or a part of the deduction or payment, the commissioner shall order the employer to pay to the employee compensation of such amount (if any) as he thinks 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.

(3) (a) A rights commissioner shall not give a decision under this section in relation to a deduction or payment referred to in subsection (2) at any time after the commencement of the hearing of proceedings in a court brought by the employee concerned in respect of the deduction or payment.

(b) An employee shall not be entitled to recover any amount in proceedings in a court in respect of such a deduction or payment as aforesaid at any time after a Rights commissioner has given a decision under this section in relation to the deduction or payment.

(4) A rights commissioner shall not entertain a complaint under this section unless it is presented to him within the period of 6 months beginning on the date of the contravention to which the complaint relates or (in a case where the rights commissioner is satisfied that exceptional circumstances prevented the presentation of the complaint within the period aforesaid) such further period not exceeding 6 months as the rights commissioner considers reasonable.

(5) (a) A complaint shall be presented by giving notice thereof in writing to a Rights commissioner and the notice shall contain such particulars and be in such form as may be specified from time to time by the Minister.

(b) A copy of a notice under paragraph (a) shall be given to the other party concerned by the rights commissioner concerned.

(6) Proceedings under this section before a rights commissioner shall be conducted in public unless, and to the extent that, the commissioner, on application to him in that behalf by a party to the proceedings, decides otherwise.

(7) A rights commissioner shall furnish the Tribunal with a copy of any decision given by him under subsection (1).

(8) The Minister may by regulations provide for any matters relating to proceedings under this section that he considers appropriate.

In the present case the Claimant had the sum of €11,688 deducted from his pay since the commencement of his employment which the Respondent contends was authorised by the contract of employment executed by both parties 28th April 2017. In addition, the Respondent deducted payments in respect of Union membership and the Claimant denies he was ever a member of any trade union nor did he receive any documentation to that effect.

The Respondent has not provided any documentation to vouch the legitimacy of the deduction in respect of trade union membership. With regard to the contracts of employment, there are now 2 separate versions and I will deal with each in turn. 

Version 1, Polish Contract signed by both parties and records deduction of travel expenses in the sum of €90, provided by Respondent. It is interesting that it does not refer to accommodation or provisions of tools or equipment which the Respondent put forward as part explanation of the sum.

The Respondent was not able to provide an explanation as to how the figure was arrived at other than to say that it was there for years. The Respondent refused to furnish information as to the total number of employees in the business but the Claimant estimates it is between 80 and 100 employees which would amount to  a substantial sum been deducted across all employees.

Version 2, Polish Contract signed by both parties with €0 inserted into contract in respect of deduction for travel expenses which is provided by the Claimant. This version is identical in every other respect to the contract in Version 1 and indeed both contracts refer to Marcin’s surname as “Latch” rather than “Lach”.

Mr Lach denies receiving an explanation from the Respondent representative in relation to travel expenses pre signing the contract as in his evidence, it was never an issue at the commencement of his employment because it was not provided by the version of the contract he signed. The Respondent representative, Mr. Manning accepted he did not explain the Polish version of the contract to him as the time of signing as he did not read it as it was in Polish. He is unable to give evidence as to what was in or not in the contract at the time of execution. The Claimant gave evidence that he later enquired in relation to the deductions from his pay but did not get any explanation, only to be told that it applies to all employees. 

It is submitted that these deductions were unlawful and were not authorised by the contract of employment as executed by the Claimant and even if they were allowed under the contract, they only refer to travel expenses and not accommodation or provision of equipment. The Respondent has not provided with any basis for the calculation of these deductions which applied even while the Claimant was on annual leave. If an employer is to charge for the provision of goods and services to an employee, the amount charged needs to be related to the cost of provision of such a good and service. In this instance, we submit that the contract presented by the Respondent has been altered post execution and even if not, it does not extend to accommodation and supply of equipment. It does not allow for arbitrary deductions to be imposed on the Claimant which have the effect of subsidising the Respondent and allowing them to compete for work more competitively at the employees’ expense.

It is our submission that such a practice should be condemned without hesitation and that the employee should be entitled to recover all monies unlawfully deducted from him for the greatest period of time possible beyond the normal 6-month period, bearing in mind the exceptional difficulties he is experienced in getting any explanation as to these deductions and the measures adopted by the Respondent to avoid same and the language difficulties posed to him.

 We urge that due consideration be given as to the credibility of both parties with regard the the existence of two almost identical contracts in polish. Is it credible that the claimant?

would unilaterally amend the contract and then start raising issues with the Respondent with regard to the deduction? We respectfully submit it is neither credible or probable that the Claimant adopted such a course of action and we submit that the contract was altered post execution by the Respondent in order to provide a defence to the claim herein. It may be that the Respondent had intended to insert it (the deduction) into the contract prior to execution but it did not and the Claimant’s version of the contract supports that it was not so included at the time of execution.

Section 5( 4) of the Payment of Wages Act 1991 provides as follows:

(4) A term of a contract of employment or other agreement whereby goods or services are supplied to or provided for an employee by an employer in consideration of the making of a deduction by the employer from the wages of the employee or the making of a payment to the employer by the employee shall not be enforceable by the employer unless the supply or provision and the deduction or payment complies with subsection (2).

Subsection 2 provides

(2) 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, and

(vii) the deduction or, if the total amount payable to the employer

by the employee in respect of the act or omission or the goods or services is to be so paid by means of more than one deduction from the wages of the employee, the first such deduction is made not later than 6 months after the act or omission becomes known to the employer or, as the case may be, after the provision of the goods or services.

It is submitted that the deduction breaches Section 5(4)(2)(vi) and in any event is not provided for under the Registered Employment Agreement which the Respondent’s purports to be in compliance with and has not produced any evidence thereof. In fact, the deduction has the opposite effect of bringing the Respondent into breaching the said agreement given that it effectively reduces the effective hourly rate agreed to and we submit this purpose of the deduction.

 The claimant’s representative offered the following comments with respect to the contract submitted by the respondent as the original contract:

 “Thank you for your letter dated the 8th November last.  While we accept the enclosure is an authentic copy of the document furnished to you by the Respondent, we do not accept as per our previous submissions that the document furnished to you is the original contract as the first page has been altered.

If my client had been furnished with such a contract allowing for the deductions, then it is inconceivable that he would have brought the complaints in the first instance, and he has given evidence to this effect during the hearing. 

It is my submission on behalf of my client that if you consider the totality of the case, the refusal to provide supporting evidence in relation to how the deductions are calculated, the reference to union deductions (despite my client not been a union member), the reliance on a registered agreement as some justification for the deductions (despite refusing to furnish the agreement relied on) then the Respondent’s defense is untenable.

In January 2022, the claimant’s representative submitted that his client had no knowledge of the agreement allowing for disputed deductions and asserted that the claimant was not a member of the Trade Union which the respondent had claimed approved the deduction.

In a further submission received by the WRC on the 4th.February 2022 , the claimant’s representative submitted that “ the REA had no bearing on the case as it had been deemed unconstitutional in 2013 and that therefore as a contract term , reference to the collective agreement (which no longer exists ) is unenforceable as a matter of fact and law”.It was further submitted that while the respondent had contended that the claimant was a member of BATU , the union was not listed as a party to the REA.It was submitted that the agreement did not provide for deductions for travel and that the deduction for travel would be contrary to the REA which the respondent claimed to be bound by .

It was advanced that there was no calculation provided by the respondent as to how the deduction figure was calculated for the claimant and that no such calculations were ever presented to the claimant. It was advanced that the 2019 Sectoral Agreement does not make any provision for travel expenses to be deducted.

It was submitted that the REA relied upon by the respondent did not support the deduction of travel expenses and that this was consistent with the contract presented by the claimant. It was submitted that no evidence had ever been provided by the respondent to contradict the claimant’s evidence in relation to BATU membership and that this went to the credibility of the respondent in relation to other matters also in dispute.

The respondent denied any breach of the Act – the respondent confirmed that the claimant was paid the labourer’s rate of €13.87 per hour in accordance with the REA and was subsequently promoted to Fixer in June 2019. He ceased employment on the 24th.June 2020 – at that time he was in receipt of the then Fixer rate of €19.94 per hour. It was advanced that “as per his contract certain deductions were made “. The respondent submitted that the claimant approached the site manager about being paid less than a colleague, it was checked out and the site manager clarified that the claimant was on the correct rate for Fixer. It was advanced that no other issues were raised by the claimant either verbally or in writing. It was submitted that the company honoured the terms of the REA and that the deductions made with respect to accommodation expenses and union dues were agreed with the union BATU. It was submitted that the claimant was never given an English contract because he was Polish. It was signed in the presence of his brother and witnessed by Mr.Manning on behalf of the company. It was submitted that the union dues deducted from the claimant’s wages were sent directly to BATU and the €90 deduction was to cover travel and accommodation costs when working away from base. The company had no documentation to furnish in relation to the deductions for union dues. It was submitted that the claimant’s representative should have furnished all documents he proposed to rely on in advance of the hearing and the company were not notified of the Polish contract he was now relying upon which contained €0 reference to deductions. It was advanced that the only evidence furnished by the claimant’s representative was an unsigned English version. It was submitted that if the contract being relied upon by the claimant’s representative was credible, why was it not furnished and put into evidence prior to the hearing. The respondent questioned why the claimant never put his grievances in writing and never complained about illegal deductions.

The contracts manager having made an affirmation, gave evidence of signing the Polish contract but did not recall if the claimant’s brother was present at the time. The manager said he did not read the document because it was in Polish. He asserted that the €90 deduction was verbally explained to workers, to stop any conflicts and that all workers are told about the €90 deduction being part of their contract when they start work. Under cross examination, the manager was asked if he had told the claimant about the deductions why would he have questioned it with the accounts dept – the manager replied he did not know. He was asked why there were 2 versions of the contract and he said he was only aware of one contract. He accepted that the contract did not refer to tools or accommodation. He did not know how the company calculated monies for travel.He said the deductions did not apply to management grades.

After making an affirmation, the financial controller stated that the deductions were spread over 52 weeks and categorically denied the assertion by the claimant that she said in answer to a query from the claimant that there should have been a 9 before the €0 in the contract.

The respondent was copied with the claimant’s supplementary submission but did not submit any comments or observations on same. The respondent was requested to submit the original contract to the WRC and this was remitted by registered post.The document  was in Polish with the exception of one clause in red ink which stated “This is a temporary contract .The position is Labourer”. In response to a request for clarification from the WRC with respect to costs incurred by the respondent, the respondent submitted as follows: “Copy of invoices for Eflow , which covers the cost of tolls .These are monthly invoices which cover all journeys made on our account .These cover the period Sept. 2019 to March 2020.

Copy of invoices for Circle K which are our fuel suppliers. These are monthly invoices and cover the period September 2019 to March 2020.

In relation to accommodation costs please note that we are unable to supply all invoices to cover the period September 2019 to February 2020 as the file is too large. If required we can issue all the invoices by post .The reason for this is due to the way the provider invoices .Each room is invoiced separately which means if we had 10 rooms for a week there are 10 separate invoices for that week. I have attached some invoices from each month September 2019 – February 2020 to give you an idea of cost.

For clarity the cost for each room is €72.24 per night excluding VAT. Each room accommodates 3 employees. Cost per employee is €24.08 per night. They stay in accommodation for 3 nights each week giving a cost per week of €72.24 per employee per week.

In their concluding submission the respondent stated“The case taken against us was that we unlawfully deducted €90 from Mr.Lach’s pay. We have provided the original employment contract showing that this deduction was part of Mr.Lach’s contract , a contract which Mr.Lach signed.This proves that this deduction was not lawful.

Creggstone gave evidence that we were in full compliance with the REA agreement. This was in fact the case despite the REA being deemed unconstitutional by the Supreme Court. Creggstone continued to honour the terms of this agreement as it was incorporated into individual contracts. We have provided evidence of costs incurred by us which underpinned this deduction.This evidence clearly showed that the deduction was fair and reasonable and did not exceed the cost to the employer and did not bring us in breach of the Act.

I have reviewed the evidence presented at the hearing and noted the polarised position of the parties. The claimant’s representative withdrew the complaint regarding the union dues of €5.00 per week constituting an illegal deduction under the Act.

Cognisable period

The claimant’s complaint was received by the WRC on the 25.03.2020 – consequently the time frame for consideration of this complaint is the 26.09.2019 – 25.03.2020. While The claimant’s representative sought the maximum extension of time, I am not satisfied that reasonable cause was advanced to justify an extension of time. In this connection I am having regard to the threshold set out by the Labour Court in Determination WTC0338 Cementation Skanska v Carroll where the Court held as follows:

“It is the Court's view that in considering if reasonable cause exists, it is for the claimant to show that there are reasons which both explain the delay and afford an excuse for the delay. The explanation must be reasonable, that is to say it must make sense, be agreeable to reason and not be irrational or absurd. In the context in which the expression reasonable cause appears in the statute it suggests an objective standard, but it must be applied to the facts and circumstances known to the claimant at the material time. The claimant’s failure to present the claim within the six-month time limit must have been due to the reasonable cause relied upon. Hence there must be a causal link between the circumstances cited and the delay and the claimant should satisfy the Court, as a matter of probability, that had those circumstances not been present he would have initiated the claim in time.” 

The first question for determination is which is the authentic contract – the version presented by the claimant which provided for €0. deduction for travel to work or the version submitted by the respondent which provided €90.00  deduction for travel to work. I have considered the entirety of the polarised submissions made on this matter and considered the evidence of the claimant and the respondent’s witness. I have also considered what the respondent asserts is the original contract in Polish dated 28..04.2017.In arriving at my conclusion I have taken into account the fact that no formal written complaint was made by the claimant with respect to a breach of the €0 deduction provision  for travel – while I acknowledge that the claimant asserted that he made numerous verbal complaints – this was  disputed by the employer .I have also had regard to the confusion between the claimant and his representative at the first hearing with respect to the source of their version of  what they argued was the authentic contract.  Having regard to the foregoing, I find on the balance of probabilities that the respondent’s version of the contract is the authentic version and that it was signed by the claimant and Mr.Manning. 

While I acknowledge the arguments advanced by the claimant’s representative  with respect to the relevance or otherwise of collective agreements in relation  to deductions  , Section 5 of the Act provides for deductions in respect of “ 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 “ in circumstances where any such deduction is fair  and reasonable having regard to all of the circumstances. 

I have considered the respondents submissions in this regard and find that there was a lack of transparency around this €90. per week deduction – the contract refers to deductions for “travel to work” – while the respondent in their submissions referred to accommodation and tools.In  their final submission the respondent submits paperwork with respect to accommodation costs of €72.24 per employee week. It was acknowledged at the hearing by the respondent that costs were spread over the full year even though they would not be incurred during the 4-week annual leave period. Additionally, the respondent has submitted invoices for Eflow – toll company and Circle K – their fuel supplier in support of their contention that the €90. weekly deduction – ostensibly for travel -was fair and reasonable. 

I don’t accept that any compelling evidence was advanced to support the contention that the weekly accommodation costs should be spread over the 4 weeks of the holiday period when those costs were not actually incurred during the claimant’s annual leave. . I find this practise was neither fair nor reasonable and accordingly I am upholding this element of the complaint and require the respondent to pay the claimant €360 compensation for this breach of the Act. 

Additionally, I find no compelling evidence was advanced to justify the imposition   of employer toll and fuel costs on workers in the course of their work. Consequently, I am also upholding this   element of the complaint. In arriving at the appropriate compensatory sum, I am factoring in the 6 months cognisable period. I find the difference between accommodation costs and the €90 deducted over a 6 months period   amounts to €461.76.

 I have concluded that the €90 deduction was not transparent and on the basis of the figures submitted by the respondent was neither fair nor reasonable. I require the respondent to pay the claimant a total compensatory sum of €821.76.

Just and reasonable deductions for the provision of goods and services