Complainant

Respondent

Anonymised Parties

A pre-school educator

A pre-school childcare facility

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-00040463-001

18/10/2020

The complainant outlined that her wages were underpaid between March and June 2020. The respondent outlined that it availed of the Temporary Wage Subsidy Scheme, and it had been Revenue who calculated the payment due to the complainant.

This decision considers the relationship between the pandemic-related subsidy schemes and the entitlement to ‘properly payable’ wages. It finds that, irrespective of any subsidy, if the employee works their normal hours, they are entitled to be paid as normal. In this case, the complainant was on lay-off at the time of the underpayment. It finds that, because of the respondent had to close overnight as a result of the pandemic and the complainant temporarily laid off, what was properly payable was the subsidy.

The complainant is a pre-school educator and the crèche she worked in closed because of the Covid-19 pandemic. The complainant’s employment began on the 6th January 2020. She outlined that her employer availed of the Temporary Wage Subsidy Scheme in April 2020 but had miscalculated her pay. The complainant’s rate of pay was calculated as of the 30th December 2019, when they should have used the salary paid on the 6th January 2020, her first day of employment. This left the complainant short of €100 every two weeks, and she incurred this loss over five fortnightly payments. The complainant outlined that the crèche reopened after 10 weeks. Her employment with the respondent ended on the 4th September 2020.

The complainant outlined that her wages were marked on her pay slip as ‘covid payment’. The problem arose as the respondent had supplied the date of 30th December 2019 to Revenue, and this had been used to process the TWSS payment.

The complainant outlined that the TWSS was paid at 100% of salary and she was not aware that only 70% was paid. Her shortfall was €503, and she was the only one in the creche who was underpaid at this time. She was not aware of the colleague on sick leave, cited by the respondent.    

The respondent outlined that it supplied the information to Revenue regarding the complainant, and they calculated the wage subsidy due to the complainant. The respondent said that it did not have input. The respondent could not change that Revenue had used an 8-week reference period and not the 7 weeks the complainant worked. The complainant’s loss was reduced to €70 per fortnight as the subsidy increased. The respondent outlined that it supplied Revenue with the fortnightly payroll, and this stated that the complainant had started on the 6th January 2020. The respondent emailed Revenue, but they did not change. It referred to its emails to Revenue on the complainant’s behalf and on behalf of the colleague who had been on sick leave.

The respondent outlined that the complainant was paid €806 per fortnight, but the calculation of the subsidy had occurred using the 8-week period. In March, the respondent paid the complainant €360 as a gesture of good will before the subsidy scheme was introduced.

The complainant started working for the respondent on the 6th January 2020. The complainant is a pre-school educator and was the only teacher employed by the respondent during this time. As a result of the Covid-19 pandemic, the respondent facility closed on the 20th April 2020 and reopened on the 28th June 2020. It was also during this time that the complainant outlines that she was underpaid in the amount of €503. Both in the period of April to June 2020 (when the facility was closed) and when it reopened in June 2020, the respondent was in receipt of the wage subsidy schemes enacted by Government in response to the Covid-19 pandemic.

The respondent submitted pay roll information to Revenue at the time it sought to avail of the Temporary Wage Subsidy Scheme (TWSS). The issue in this case is that Revenue used an 8-week reference period to calculate the complainant’s average net weekly income when she had only worked for the respondent for seven weeks. Obviously, the complainant earned zero wages in the first week of January 2020 as her employment had not yet commenced. This was factored into the calculation of the complainant’s average weekly pay, meaning that the subsidy paid on her behalf was less than it would have been had the calculation been done on the seven weeks she was actually in employment. The question is whether there was a contravention of the Payment of Wages Act by the respondent.

Temporary Wage Subsidy Scheme

Section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020 set out the terms of the Temporary Wage Subsidy Scheme. The purpose of the subsidy was to make a significant contribution to make good the shortfall that would otherwise be payable in net weekly emoluments. The section refers to the Payment of Wages Act, so that the statement required by section 4 (a pay slip) must include and identify the subsidy. It provides for a penalty where the employer does not do so.

Revenue issued Guidance on the operation of the Temporary Wage Subsidy Scheme, and this was revised several times. The Guidance cites that the employer shall calculate Annual Revenue Net Weekly Pay by dividing wages by the insurable weeks in January and February 2020. It acknowledges that there will be employees in the complainant’s situation: ‘The calculation will result in an Average Revenue Net Weekly Pay for the employee, however, there will be a small number of cases where the calculation may not be fully representative of the employee’s usual weekly wage, the calculated Average Revenue Net Weekly Pay must be used in these cases.’

‘Adversely affected’

The wage subsidy schemes provided important financial supports to businesses and employers who were adversely affected by the pandemic. They were available to businesses who had to close their doors, and also to those who continued to trade, albeit still adversely affected. Employees who worked for businesses adversely affected could be on lay-off, on short-time or at work. While they were paid in respect of ‘specified employees’, the schemes do not alter the obligations of both employer and employee under the Payment of Wages Act, aside from stating the amount of the subsidy in the pay slip. This means that an employer is required to pay the wages properly due to the employee, taking into account the permitted deductions in section 5 of the Payment of Wages Act.

Being in receipt of the subsidy did not give employers an additional ground to make a lawful deduction to an employee’s wages. What, therefore, matters is whether the employee was working or were they on short-time or on lay-off. If they were at work, the employee is entitled to be paid in line with their contract of employment. The subsidy was provided to help meet this cost in the circumstances; it did not set a maximum rate of pay for the employee, where they continued to work their normal hours. An employee working their normal hours is entitled to their normal pay. In this case, however, the respondent facility had to close overnight and there was no work available for the complainant.

‘Properly payable’ in the context of an unforeseen contingency

The requirement for businesses to close overnight on public health grounds clearly was an unforeseen contingency. Because of the impact this had on employers and employees, the Government introduced the wage subsidy schemes to keep employees on pay-roll. Many employees were laid off because there was no work available to provide for them. The wage subsidy scheme ensured that wages for such workers could still be paid. It is axiomatic that an employer who lays off employees without pay was expected to avail of these supports. I find that where a business closed altogether and where the employees were laid off with no work available, the wages properly payable could be the amount of the subsidy.

Findings in respect of this case

In this case, I accept that it was Revenue who assessed the complainant’s net weekly wage in a way that was not representative of her actual pay. I accept that the respondent did not contribute to this in any way. The respondent facility closed between April and June 2020. It reopened on the 29th June 2020. The complainant then returned to work. Coincidentally, the calculation of the complainant’s net weekly pay was amended to reflect the correct amount.

The underpayment arose because of the approach taken by Revenue and not because of anything done by the respondent. The period of underpayment corresponds with the period the respondent facility had to close and there was no work available for the complainant to do. Given these circumstances, I find that the wages properly payable to the complainant when on lay-off and the respondent facility closed was the amount of the wage subsidy available.

There was, therefore, no contravention of the Payment of Wages Act as, in circumstances where the creche closed and the complainant laid off, what was properly payable was the subsidy available to the respondent following the overnight closure of the creche. I appreciate that the complainant will be disappointed by this outcome, but I find that the complaint is not well-founded.

CA-00030423-001

I decide that this complaint pursuant to the Payment of Wages Act is not well-founded.

Payment of Wages Act / TWSS / Pandemic support