Complainant

Respondent

Anonymised parties

A Higher Executive Officer

A public body

Representatives

Self-represented

Claire Bruton BL instructed by Noreen Collins, Solicitor

Act

Complaint Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991

CA-00039631-001

07/09/2020

The complainant is a civil servant, and this matter relates to his pay when he was successful in being assigned an EO allowanced role. The respondent states that an overpayment occurred, which the complainant denies. The respondent raises the issue of jurisdiction. The decision addresses the jurisdiction of an adjudication officer per the Payment of Wages Act and starting pay on promotion and allowances, as addressed in Circular 34/1977 and Circular 08/2019.

The complainant outlined that on the 12th May 2017 he commenced in a role that attracted the full Executive Officer (EO) allowance. He outlined that the only Circular then in place was Circular 34/1977 and the later Circulars were not relevant. These circulars had not been provided to him previously and post-dated his contract of employment.

The complainant outlined that this matter was within the jurisdiction of the Payment of Wages Act. He did not accept that this related to an overpayment. Referring to the WRC adjudication of A Teacher v A Language School (ADJ-00002911), he submitted that the Circular did not require that he go on a lower point on the EO scale when taking up the EO allowanced role.

The complainant outlined that he had marked time when he was promoted from Clerical Officer (CO) to EO. He said that he should not have been moved back to point 1 or point 3 and should retain point 6 or point 7 on taking up the EO allowanced role.

Commenting on An Employer v A Worker (PWD1916) decision cited by the respondent, the complainant said that, unlike that case, he had brought the issue to the employer’s attention.

In reply to the respondent’s opening submissions, the complainant said that it was never pointed out to him that the recalculation would take place. He said that the employee who is promoted is not aware of the recalculation until their pay is reduced. He stated that while the circular is now clearer, he was not aware of it at the time.

In cross-examination, the complainant said that on his appointment to the EO role, he went to the closest point in the EO scale and marked time, per Circular 34/1977. Also per the Circular, he kept the allowance in the calculation of his pay in the promoted role. He said that following this promotion, he was placed on the appropriate point on the applicable incremental scale. The complainant accepted that he was marking time following the promotion. He said that his understanding of marking time was that on promotion, his salary would not be reduced on taking up the new role.

It was put to the complainant that he would have been aware that his salary as an EO included the CO allowance paid to him prior to his promotion. Referring to the appointment letter to the EO allowance role (11th May 2017), the complainant said that he contacted the Recruitment manager named in the letter. He checked that he would receive the entire amount of the allowance and also confirmed this with centralised HR resource. He outlined that he wanted clarification on the financial implications of the assignment. It was made clear to him that he would receive the full allowance.

It was put to the complainant that the respondent’s email of the 23rd July 2020 made it clear while it was not explicit in Circular 34/1977 that an employee could not benefit twice from the same allowance, this was required for the correct application of the Circular. He replied that he had asked for the correspondence referred to in this email (to DEPR) but had not heard anything. It was put to the complainant that the Circulars allowed for the recoupment of overpayments; he said that this was not an overpayment.

It was put to the complainant that the overpayment stemmed from an error as the centralised HR resource had not recorded that he was marking time; he said that it would be unjust on him that his employer could be unjustly enriched. In respect of his current position, the complainant said that he has been in a HEO allowanced role since August 2020. He was promoted to this role from a HEO role. As he was then on the first point of the HEO scale, there was no need to recalculate his salary. 

The complainant outlined that the effect of the pay reduction was that he was promoted in name only. He submitted that this did not relate to an overpayment. He confirmed that the enforcement roles carried a warrant.

The respondent outlined that the period of overpayment arose between June 2017 and December 2018. The complainant had previously been a Clerical Officer (CO) and had taken on an allowanced role. The allowance is paid to take account of the onerous duties of the role and the anti-social hours. The complainant was then promoted to Executive Officer (EO) and received the benefit of the CO allowance in determining the point at which he started on the EO scale. The respondent stated that the complainant would have been on the 3rd or 4th point on the EO scale without the CO allowanced role being factored in. It submitted that while the complainant was on a higher level of pay, he was marking time.

The respondent outlined that marking time encourages employees to avail of promotional opportunities. In this case, the complainant was marking time because he previously had an allowanced post. In June 2017, the complainant took up the EO allowanced role and then received the allowance for that post. The respondent stated that it had been an error not to then recalculate the complainant’s salary at the time of this change. The centralised HR resource should have noted that the complainant was then marking time. The respondent outlined that when such a recalculation occurs, it is the pay that is reduced and not the allowance.

The respondent submitted that if the adjudication officer determines that this relates to an overpayment, it follows that there is no jurisdiction under the Payment of Wages Act.

The respondent outlined the overpayment was identified following the complainant’s promotion to HEO. While the complainant says that there is nothing in writing prohibiting two allowances being paid and the respondent accepted this as correct, it is well-established in DEPR and in custom and practice those two allowances could not be paid. It was submitted that point 4 of Circular 34/1977 made a clear reference to marking time. The complainant would have been aware that the allowance was included in his salary following promotion.

The respondent outlined that the overpayment was the difference between his basic salary in 2017 and 2018 compared to what his salary should have been, had the recalculation taken into account that the complainant previously had an allowance and was now going into another allowanced role.

The respondent stated that Circular 07/2018 provides for recoupment and made this mandatory. It was submitted that the complainant had the benefit of the 2018 and 2019 Circulars in that the recoupment was structured on a hardship basis. It was submitted that article 2.4 of Circular 08/2019 provided that an officer could not benefit twice from the same allowance and that this was reflective of existing practice.

The respondent submitted that an adjudication officer had to decide whether an overpayment had occurred and once this had been determined, this ended the matter.

The respondent referred to An Employer v A Worker (PWD1916) which was similar to this case as it involved a civil servant promoted on a marked time basis. The claimant in PWD1916 was then promoted to a role attracting an allowance and should have returned to his notional salary. It was submitted that the Labour Court had no issue with the recoupment made by the employer.

Referring to Sunderland Polytechnic v Evans [1993] I.C.R. 392, the respondent submitted that the extent of jurisdiction was whether there was an overpayment in the correct amount. Referring to Swinn v S.I.P. Products [1994] I.C.R. 473, jurisdiction did not extend to being satisfied that the deduction was lawful.

The respondent outlined that the case relied on by the complainant – HSE v INMO CD/15/298 was a referral pursuant to the Industrial Relations Act, and not a Payment of Wages Act complaint. The respondent submitted that it had, therefore, no application to this case.

Commenting on the Teacher v Language School decision (ADJ-00002911) submitted by the complainant, the respondent outlined that this related to the application of section 5(1) of the Payment of Wages Act and the retrospective change of the claimant’s conditions. This differed from the instant case, which arose from an error in recalculating the complainant’s salary. The complainant was paid the allowance due for the role, but his salary ought to have been recalculated on promotion.

The respondent outlined that the recalculation of salary should have taken effect from the 6th June 2017.

Evidence of the HR Manager

The HR Manager outlined that the complainant received the EO allowance from the 6th June 2017. The complainant’s salary should then have been reduced to notional pay. This issue was picked up when the complainant was subsequently promoted to HEO. The HR Manager outlined that the respondent instructed the centralised HR resource to pay the allowance and it was for the centralised HR resource to re-calculate the salary. The EO contract stated that the allowance would cease on the person leaving the allowance role and that the allowance could not be claimed as substantive salary after that. This was stated in the June 2017 contract. It was stated in the competition circular that there may be a knock-on effect.

The HR Manager said that he became aware of the complainant’s case in May 2019. The complainant had been in a CO allowanced role and was promoted in 2016 to EO. The complainant received the benefit of the allowance on promotion. The HR Manager outlined that otherwise, there would be no incentive to be promoted as the employee’s pay would drop. The complainant was placed between the 7th and 8th point of the basic salary scale and he would otherwise have gone to the 3rd and 4th point. The complainant would have had to serve four years marking time, reaching the ninth point on the scale sometime in early 2021. The HR Manager outlined that people are not placed on a higher point because of quality of their service but because of their service.

The HR Manager outlined that he had come across this issue in two other cases where people were marking time with the benefit of an allowance but if they are assigned another allowanced role, they must be placed on notional pay. He had had no previous dealings with DPER on this, but this was the subject of an appeal to the Labour Court. He said that the system did not record that the staff member was marking time. He outlined that his view was that an overpayment occurred. He said that this had arisen because of an error but one that had to be addressed.

The HR Manager outlined that the complainant had asked to confirm the allowance amount and he was paid the full amount. The complainant was not, however, entitled to the higher pay when he was marking time. This was part of the terms and conditions of the EO role. He said that his email of the 23rd July 2020 had acknowledged that Circular 34/1977 was not explicit in how allowances should be applied to starting pay on promotion. He said that DEPR policy was clear, and the correct application of the Circular required that an officer could not benefit twice from an allowance. There was, therefore, an error that needed to be corrected. The HR Manager said that he was sorry that this was not apparent at the time of promotion, and it was clear that marking time needed to be tracked.

In cross-examination, the HR Manager was asked why the complainant was not left marking time after being promoted to the allowanced role; the HR Manager replied that this was because he was to be paid the other allowance. It was put to the HR Manager that the Circular was not explicit regarding two allowances; the HR Manager replied that the complainant should have moved to notional pay. Referring to the promotional circular for the EO allowanced role, it was put to the HR Manager that the complainant met the conditions for the allowance and the Circular did not provide for retrospective reduction in pay; the HR Manager replied that this was an internal circular and could have been more explicit. He said that Circular 34/77 referred to ‘cessation of benefit’ on promotion. The complainant said that he took this to mean that he was no longer performing the allowanced duties; the HR Manager replied that it was the CO allowance competition circular that had set out the benefit. It was put to the HR Manager that the Circular outlined that an employee would retain the benefit if he held it for over a year and this issue had led to a low turnout in a recent competition for EO allowanced posts; the HR Manager replied that the taking of an allowanced role is not a promotion as it is at the same grade but there is a financial benefit to the employee.

In closing submissions, the respondent outlined that jurisdiction extended only to whether there was an overpayment in the correct amount. Without prejudice to this submission, the respondent submitted that this was a ‘lawful deduction’. It referred to Farrelly v Tourism Ireland PWD 1643 as authority that a circular is an ‘instrument’ and that there was no need for a Statutory Instrument. It was the Minister who regulated the terms and conditions of civil servants and there was an implied contractual term arising from custom and practice.

CA-000039631-001

The complainant is a civil servant and commenced employment with the respondent in June 2007. He is now a Higher Executive Officer. The complainant was assigned a Clerical Officer (CO) allowanced role in 2013 and then in June 2016, promoted to Executive Officer (EO). In June 2017 and following a competition, the complainant was assigned an EO allowanced role and since then, has been promoted to HEO. The allowance is paid as the allowanced roles are warranted enforcement roles requiring full flexibility.

This is a Payment of Wages Act complaint. The complainant outlines that the respondent invalidly recouped monies paid to him in wages. He denies that an overpayment occurred and outlined that he was entitled to the full allowance when performing duties in the allowanced roles. The respondent raises the jurisdiction issue as it contends that this relates to an overpayment. It outlines that the complainant’s salary increment should have been recalculated following his assignment to the EO allowanced role as his place on the scale reflected that he previously received the CO allowance. In error, this recalculation had not taken place, and it was now required to seek recoupment of the overpayment.

Statutory provisions

The interpretation section provides a broad definition of ‘wages’ to include any pay or emolument. The definition provides a number of exclusions to the definition of ‘wages’, for example expenses or benefit in kind. This case clearly relates to the complainant’s wages.

Section 5 regulates deductions made to wages, as well as certain payments made by employees to employers. Section 5(1) provides a general prohibition on making deductions, unless required by statute or an instrument (e.g. tax), authorised by the contract of employment or with the employee’s consent. Section 5(2) prohibits deductions arising from an act or omission of an employee, or for goods or services supplied to the employee unless a number of conditions are met (e.g., it being fair and reasonable and advance notification given to the employee). Section 5(3) extends section 5(2) to payments to be made by an employee to an employer (e.g. a training cost) and section 5(4) extends the conditions in section 5(2) to the enforceability of contractual terms. Section 5(5) sets out seven kinds of deductions to which ‘nothing in section 5 applies’, including an overpayment.

Section 5(6) makes clear that a deduction includes situations where the employee is paid less than they are due or not paid at all, unless there was an error of computation.

Section 5(5)(a) applies to a deduction to wages for the reimbursement of the employer in respect of an overpayment of wages or expenses. The amount of the deduction cannot exceed the amount of the overpayment.

Section 6 sets out the complaint procedure to an adjudication officer in respect of ‘a contravention of section 5 as respects a deduction made by the employer from the wages of an employee’. The role of the adjudication officer is to decide whether the complaint of a contravention of section 5 is, in whole or in part, well-founded and if so, to award compensation ‘reasonable’ in the circumstances. This is the jurisdiction of the WRC adjudication officer.

I find that section 5(5) sets out several standalone defences in respect of deductions made to an employee’s wages, for example it is a defence for the employer to say that the deduction was made to recoup an overpayment. If a deduction falls within the ambit of section 5(5), the employer does not have to show compliance with either section 5(1), 5(2) or the related sections. Section 6 requires an adjudication officer to enquire whether there has been a contravention of section 5 in respect of a deduction. This applies to all the constituent subsections of section 5, including 5(5). Where the employer seeks to rely on one of the defences in section 5(5), the adjudication officer must determine whether the employer is entitled to do so. If the employer is not able to rely on the defence, then the complaint will be deemed well-founded, unless some other defence is applicable. If the employer can rely on one of the defences in section 5(5), then the complaint will be deemed not well-founded. This is a decision within the jurisdiction of the adjudication officer and made in terms of the redress provision, i.e. well-founded or not.

Jurisdiction / requirement for a substantive decision

The respondent outlined that an adjudication officer could ascertain whether there had been an overpayment and whether the amount of the deduction was greater than the overpayment. If there had been an overpayment and the deduction was not greater than this amount, it was submitted that the adjudication officer was then deprived of jurisdiction. For these reasons, I do not agree that it is a matter of jurisdiction, but a matter of whether or not the complaint is well-founded.

It is confusing to address this as an issue of jurisdiction. An adjudication officer must always ensure that they are acting within jurisdiction. If their jurisdiction is questioned, the adjudication officer must satisfy themselves that they have jurisdiction to proceed. If it is a matter of jurisdiction, a party could ask that the jurisdiction issue be dealt with as a preliminary matter without a full enquiry into the complaint. If it is a matter of jurisdiction, the decision might not be framed in terms amenable to an appeal to the Labour Court (as not framed in the terms of the relevant redress provision, i.e. well-founded or not). As set out in the ‘Review of WRC adjudications & recommendations 2020’, the majority of parties and in particular complainants are not represented at WRC adjudications. Discussing whether a deduction could be stood over because of an overpayment should be a straightforward conversation about the rights and wrongs of what happened. Speaking about it as a matter of ‘jurisdiction’ renders it legalistic, nebulous and detracts from the relatively straightforward nature of the enquiry. The Payment of Wages Act does not say that it is a matter of jurisdiction, so treating it as one could lead to confusion.

The possibility of this being a matter of jurisdiction arises from two UK Employment Appeal Tribunal decisions from the early 1990s: Evans v Sunderland Polytechnic [1993] I.C.R. 392 and Swinn v S.I.P. Products [1994] I.C.R. 473. The divisions of the Employment Appeal Tribunal held that once the employer said that the deduction was on grounds of an overpayment, they were immediately deprived of jurisdiction. It was a matter for the courts to decide the lawfulness of the deduction and they could not consider whether the deduction was lawful. They reached these conclusions on the basis of their interpretation of the Wages Act, 1986 and on parliamentary debates.

I note that in An Employer v A Worker (PWD1916), the Labour Court issued a substantive decision on the complaint. I also note that subsequent UK Employment Appeal Tribunals distinguished Evans and Swinn and found that they could decide the lawfulness of the deduction. In Phillips Components v Scott [2003] UKEAT 0609_01_0602, the Employment Appeal Tribunal held that it had jurisdiction as the overpayment was disputed, and distinguished Evans and Swinn as the overpayment had not been disputed in those cases. There is, therefore, dissonance in UK employment law in respect of jurisdiction where the deduction is made on grounds of an overpayment.

In considering the persuasiveness of Evans and Swinn in Irish law, it is important to note the differences in the relevant statutory provisions between the Payment of Wages Act and the UK equivalent: the repealed Wages Act, 1986 and the Employment Rights Act, 1996. As set out above, section 6 of the Payment of Wages Act provides that the adjudication officer shall decide whether there has been a contravention of section 5, i.e., all of the elements of section 5. Recall that the overpayment defence is provided for in section 5(5)(a). The equivalent UK overpayment provision was contained in section 1(5) of the Wages Act and replicated in section 14 of the ERA. This jurisdiction issue arose as section 1(5) of the Wages Act was not expressly listed in section 5 of the Wages Act as one of the complaint areas an Industrial Tribunal could decide.

Not only are the statutory provisions different (with the overpayment defence clearly falling within the ambit of the adjudication officer), but it is also important to note the EAT’s reliance in Evans on parliamentary debates to reach its conclusions on statutory interpretation. The EAT held that because section 1(5) was outside of the complaint areas listed for the Industrial Tribunal, it must be a matter retained by the county court to decide. Reversing its established position in Home Office v Ayres [1992] I.C.R. 175, the EAT based this conclusion on comments made by two parliamentarians that the county court was the appropriate venue to decide the lawfulness of a deduction made for an alleged overpayment. First, such reliance on parliamentary materials is not in keeping with statutory interpretation in Irish law (see the clear position of the Supreme Court in Crilly v T & J Farrington Ltd [2001] 3 IR 251). Second, as noted in the Annotated Irish Employment Legislation, there were no similar comments made during the passage of the Payment of Wages Act through the Oireachtas. Third, the EAT in Evans applied the House of Lords authority of Pepper v Hart [1993] I.C.R. 291 in relying on parliamentary materials in statutory interpretation. The heavy lifting done by parliamentary debates in Evans must represent a high-water mark in the reliance on comments made in parliament to aid statutory interpretation in employment law. I do not know of any more recent examples.

I appreciate why a party might seek to rely on Evans and Swinn in considering the Payment of Wages Act. For the above reasons, I, however, find that these authorities are not persuasive in the interpretation of the Payment of Wages Act.

Pay on promotion

The issue in this case arises because the complainant was successful in obtaining allowanced roles and promotions in a short space of time. He worked through the moratorium and had since been rapidly promoted. This is normally good news both for employee and employer, but in this case, resulted in this dispute over whether the complainant was overpaid.

‘Same allowance’

In the email of the 23rd July 2020, the HR Manager cites clarification given to him from the shared HR resource. This stipulated that where the new allowance is similar to the old allowance, then the employee reverts to notional pay and is paid the new allowance. If the old and new allowances are different, the employee retains marking time pay and is paid the new allowance.

Respondent internal circulars

Respondent Circular E.6275 (date 16th January 2012) governed ‘remuneration and terms for allowanced posts’ in the competition where the complainant was successful in being appointed to the CO allowanced role. The Circular stipulates ‘Staff assigned to allowanced posts operate on an “on call” basis and will be paid an annual allowance for flexibility and additional attendance in lieu of overtime payments. The nature of the work requires total flexibility, involved planned, unplanned, night and weekend duty. Planned flexibility will occur where the person is scheduled to attend outside the standard attendance pattern and is a fundamental element of an allowanced position. Unplanned attendance is necessary where, because of a particular operation, additional flexibility is required.’

The Circular provides that the payment of the allowance shall cease if the employee is on long-term sick leave and resume when the employee can return to their role. Similar provisions apply in the case of maternity/adoptive leave. Employees on work-sharing arrangements were expected to work full-time hours in the role.

The complainant received an annual allowance of €6,577.25 while undertaking the CO allowanced roles. While carrying out the EO allowanced role, the complainant received a higher allowance: €9,687.99.

Respondent Circular E.6419 (20th January 2017) sets out the remuneration and terms of the EO allowanced competition the complainant was successful in. In a very similar definition to the above, the EO allowanced Circular provides ‘Staff assigned to allowanced posts operate on an “on call” basis and will be paid an annual allowance for flexibility and additional attendance in lieu of overtime payments. The nature of the work requires flexibility involving planned, unplanned, night and weekend duty. Planned flexibility will occur where a person is scheduled to attend outside the standard attendance pattern and is a fundamental element of an allowanced position. Unplanned attendance is necessary, where because of a particular operation or in response to real time intelligence, additional flexibility is required.’

According to the Circular, the EO allowance will cease to be paid where the employee is on long-term sick leave. There is no reference to what happens when the employee avails of maternity/adoptive leave. The Circular provides that work sharing, and term-time arrangements are not compatible with allowanced posts, ‘though applications will be considered on their merits.’

The respondent relies on the principle that ‘an officer may not benefit twice from the same allowance.’ This is explicitly set out at 2.4 of Circular 08/2019, which was effective on the 1st January 2018. At subsection (ii), the Circular states ‘Where an officer is promoted having had the benefit of an allowance in the calculation of starting pay and subsequently moves to a post at the higher grade attracting the same allowance, the officer’s pay should be recalculated to ensure that the benefit of the allowance is not applied twice. In applying this measure, the officer’s pay (including allowance) will not be less favourable than the officer’s current rate.’ The respondent submits that this principle was applicable prior to the coming into force of the Circular and was required for the effective operation of starting pay on promotion (as set out in Circular 34/1977). The complainant outlines that his assignment to the EO allowanced role came before the enactment of Circular 08/2019 and the Circular did not, therefore, apply.

Circular 34/1977

The relevant part of clause 4 of Circular 34/1977 provides:

‘4 (1) Subject to (2) following, an officer who holds an allowance in the nature of pay, other than an allowance referred to in paragraph 5, at the time of promotion to a higher grade will enter the scale for the higher post (a) on the basis of application of the normal starting pay on promotion rules to his scale pay exclusive of the allowance or if more favourable and provided he has held the allowance for at least a year, at his existing scale pay (exclusive of accrued increment) plus the allowance subject to mark-time by reference to entry as at (a).

(2) Officers who on 14 May 1973 held and still hold allowances designated as pensionable before 24 May 1968 will have these allowances reckoned as scale pay for starting pay on promotion purposes, provided they are held at the time of promotion. This arrangement does not apply to those given the equivalent of these allowances after 14 May 1973.

…

(5) Officers who come within the scope of sub-paragraph (1) (b) should be put on scale points, as appropriate, in accordance with the terms of paragraph 2, after they have ceased to mark time. Other officers should in this respect be dealt with in accordance with the arrangements appropriate to the entry pay provisions applying to them.’

This provides that starting pay on promotion is the more favourable of either normal starting pay on the relevant scale or the existing scale pay plus the allowance subject to mark-time by reference to what normal starting pay would have been. This normal starting pay is the notional rate of pay.

Clause 4(5) address what should happen to an officer who has ceased to mark-time, i.e. the return to incremental scale. Clause 4(2) addressed allowances in the case of a specific category of allowances: pensionable allowances held before 1968 that continued to be held in 1973. This reflected the position in respect of this category of civil servants as set out in Circular 24/1973.

Complete reading of Clause 4(1)

For completeness and to be fully understood, I think that Clause 4(1) must be read with the insertion of a subparagraph (b) between ‘or’ and the words ‘more favourable…’. It should read:

‘4 (1) Subject to (2) following, an officer who holds an allowance in the nature of pay, other than an allowance referred to in paragraph 5, at the time of promotion to a higher grade will enter the scale for the higher post (a) on the basis of application of the normal starting pay on promotion rules to his scale pay exclusive of the allowance or (b) if more favourable and provided he has held the allowance for at least a year, at his existing scale pay (exclusive of accrued increment) plus the allowance subject to mark-time by reference to entry as at (a).’

Clause 4(5) refers to ‘sub-paragraph (1)(b)’ when there is no such sub-paragraph. The context of 4(5) makes clear that it relates to what happens at the end of mark-time. The words I say constitute sub-paragraph 1(b) relate to the commencement of mark-time. So, this context suggests the clause about the ending of mark-time refers to the start of that period of mark-time.

I also note that the text of sub-paragraph (1)(a) in the Circular refers back to itself, i.e., the last words are ‘by reference to entry as at (a).’ Provisions in statutes and circulars do not refer to themselves by their own section or paragraph reference; they simply say ‘this’. The reference to ‘entry as at (a)’ reads like something one would see in a sub-paragraph (b). Furthermore, why use a subsection (a) at all, if there is no other sub-paragraph in Clause 4(1).

I note that sub-paragraphs were used in Circular 24/1973, a precursor to Circular 34/1977, in very similar text addressing pay on promotion. Sub-paragraphs are used in Circular 08/2019, with sub-paragraphs (i) and (ii) set out at clause 2.1.

Taken together, I read Clause 4(1) as including the words ‘if more favourable and provided he has held the allowance for at least a year, at his existing scale pay (exclusive of accrued increment) plus the allowance subject to mark-time by reference to entry as at (a)’ as constituting subparagraph (1)(b).

Application of Circular 34/1977

Following Circular 34/1977, various issues were raised through the civil service conciliation and arbitration scheme regarding starting pay on promotion. General Council Report 816 as amended by General Council Report 966 provided for increased pay on a mark-time basis for civil servants appointed through open competition (dealt with by Clause 3). General Council Report 1266 disapplied Clause 3 to confined promotions from Clerical Assistant to Clerical Officer made in the early 1990s. General Council Report 1382 recommended that civil servants who were promoted while acting up would not mark time if the allowance was included in their starting pay on promotion. These recommendations illustrate how the application and interpretation of the Circular and starting pay on promotion have developed since the Circular was issued. They illustrate how the provisions of a Circular must be viewed in the round and in their context.

Circular 08/2019

Circular 08/2019 is said to have ‘abolished’ or ‘eliminated’ marking time. This arises as marking time is not provided for at Clause 1 in respect of starting pay. Appendix 2 brought on scale officers who were marking time and appointed both before and after the Public Service Stability Agreement. As noted, Clause 2 addressed starting pay where the officer is in receipt of an allowance, stipulating that ‘An officer may not benefit twice from the same allowance.’ This Circular was enacted after the complainant’s promotion to EO and the commencement of his EO allowanced role. It was enacted in the context of the Public Service Pay Agreement and the unwinding of FEMPI. This suggests that Circular 08/2019 differentiated between incremental pay and the treatment of allowances, ending marking time in the case of the former. It suggests that Circular 08/2019 elucidated the existing position in respect of allowances, i.e. it was always the case that mark-time applied both to increments and to the factoring in of allowances. To find otherwise is to find that Circular 08/2019 represented a deterioration in the terms and conditions of civil servants, and nothing in the context of the Circular suggests this.

Findings in relation to this complaint

As set out above, the jurisdiction of the adjudication officer is to decide whether there has been a contravention of section 5 of the Payment of Wages Act. It is a jurisdiction to determine what wages were properly payable to the complainant and, given the amount paid, whether there was an overpayment. If there was an overpayment and the amount deducted was not more than this overpayment, the complaint of a contravention will be not well-founded.

I find that Clause 2 of Circular 08/2019 reflected the existing position in respect of how allowances which were the ‘same’ would be factored into pay. While Circular 34/1977 was not explicit on the point, I accept that its application required that a civil servant would mark time both in terms of increment and the factoring in of an allowance. The logic for this is a balance between the allowance being paid for a specific purpose and a specific period of time, with the principle that the civil servant should not lose out financially on promotion. In this case, the allowance is a flexibility allowance to compensate the employee for the onerous demands of on-call work in a confrontational environment. The civil servant receives the financial benefit of the allowance during their time doing the role. If they ceased the role and were not promoted, the allowance would simply stop. If they are promoted, they retain the financial benefit of the allowance in the calculation of their pay. This is the application of the principle that an officer should not be worse off on promotion. They are not financially worse off, but it does not remove them from the incremental scale. They are placed on the incremental scale at the notional pay level and continue up the scale until the notional pay and actual pay correspond. The civil servant can then be said to have had the benefit of the allowance and the restriction no longer applies. The issue arises during this time period if they are appointed to another allowanced role. The principle of not being worse off on promotion does not, however, extend to this actual pay being the base line on which to add the second allowance.

I have found that Circular 08/2019 reflected the existing position in respect of how allowances were factored into starting pay on promotion, i.e. that the officer shall not get the benefit of the same allowance twice. The extract of the message from the shared HR resource set out in the email of the 23rd July 2020 indicates that if the second allowance was ‘different’ to the first allowance, then the complainant would receive marking time pay (actual pay) and the new allowance (the position he seeks). If the allowances are the ‘same’, then the re-calculation to notional pay is required.

I presume the logic for this is that if the new allowance relates to something very different to the employee’s normal progression, it is added to the officer’s actual pay. It follows that it is necessary to make a finding whether the EO allowance and CO allowance were the ‘same’ or were they ‘different’. They are different in that they relate to different periods of time, for different amounts and at different levels of seniority. As set out above, there is very significant similarity in the wording of the relevant parts of the respondent Circulars. They both relate to flexibility required in the same broad enforcement function. I, therefore, find that they are the ‘same’ for the purposes of applying the Circular.

It follows from the above that the complaint is not well-founded. The respondent is correct that an overpayment occurred when on being assigned the EO allowanced role, the complainant’s pay was not recalculated to reflect that the complainant’s actual pay had included the CO allowance. As the amount deducted by the respondent was not more than the overpayment, there was no contravention of the Payment of Wages Act.

The complainant points to these as discouraging applications for allowanced roles, giving an example of a more recent EO competition. This arises especially as respondent staff have been successful in several promotions over a relatively short space of time, so may well have an allowance factored into their pay. I can certainly see why a staff member would say that if they have to mark time in respect to how an allowance is factored in, they should do so in the non-allowanced role. Before seeking an allowanced role, they might understandably wait until they get the full financial benefit of the allowance, as in their actual pay and the full allowance. This concern is similar to some of the issues dealt with by the Civil Service Conciliation and Arbitration Scheme over the years, as discussed above.

I also understand the complainant’s frustration of not being told of the financial implications of taking up the EO allowanced role, i.e. that his pay would be re-calculated and reduced. I accept that he moved city to take up the allowanced role and checked twice whether the assignment would negatively affect his pay. He was not given the full information. This came to light following his further promotion to HEO and the recoupment was made off his net pay (as permitted by the Circular). The full implications of any assignment to an allowanced role should be clear to potential applicants, for example in the relevant competition circular. Where they are existing civil servants, it should be clear that their pay could be re-calculated downwards to reflect the ‘same’ allowance paid to them previously. Apart from acknowledging this frustration, I cannot do anything more in deciding this complaint pursuant to the Payment of Wages Act.

CA-00039631-001

I decide that the complaint made pursuant to the Payment of Wages Act is not well-founded as the deduction was lawfully made in respect of an overpayment.

Payment of Wages Act / overpayment / defence

Civil Service / starting pay on promotion / allowance 

Circular 34/1977 / Circular 08/2019