Complainant

Respondent

Parties

Anthony  Pigott

Malbay Painting and Maintenance Ltd Malbay Painting and Maintenance Ltd

Representatives

David Lane SIPTU

Sinead Finnerty Peninsula

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-00042688-001

24/02/2021

The complainant submits that he was paid through the Government’s Temporary Wages Subsidy Scheme (TWSS) and that the respondent failed to pay what was properly payable to him and failed to advise the complainant that he would be paid through TWSS.

The parties were advised that following the delivery of a judgement of the Supreme Court in Zalewski v Adjudication Officer on 06/04/2021, that hearings before the Workplace Relations Commission are now held in public and that this decision would not be anonymised. 

Parties were also advised that an Adjudication Officer may take evidence under oath or affirmation.  Evidence was taken under oath or affirmation, from the complainant, Anthony Pigott, and for the Respondent: from David Quinn, (Mr A) and John Baker, (Mr B) and cross examination of witnesses was permitted.

The complaint commenced employment with the Respondents in November 2014 and works as a painter for which he received €15.50 per hour, €620 per week gross, of which he took home a net payment of €518.73.  The complainant submits that between 25 May 2020 - 28 August 2020, he was not paid the full amount owed to him for working 40 hours per week and that the respondent failed to give him notice of this deduction. 

The respondent saw a downturn in business due to the pandemic in early 2020 and availed of the Government’s assistance financially in the form of TWSS which meant a portion of wage was paid via TWSS and the remainder by the Employer. The respondent never informed the complainant that they were entering into the TWSS scheme, and never informed him of the implications of the scheme.

The complainant’s gross payment for the fourteen weeks had a shortfall of €102 per week which equates to €1,428 in total.  The €518 payment equates to €12.95 per hour not €15.50 per hour.  The complainant made attempts to resolve this issue directly with the respondent to no avail. He contacted numerous state bodies including citizens information, revenue and the WRC to seek answers and guidance on the matter.

Within the first week of the scheme, the complainant spoke to Mr A and Mr B and advised them of his unhappiness and that he was legally entitled to be paid in accordance with his Employment Contract and that the respondent was paying him less than he was entitled to.  He requested information to clarify the position and requested that he be removed from the scheme. The respondent replied that they were following the rules of Revenue

It was submitted that Revenue’s guidelines stated that TWSS is available to employers who are making their best efforts to pay some of the employee’s normal wage during the pandemic.  However, the revenue guidance did not outline how an employer can demonstrate it is making their best efforts where it is not paying wage top ups or where there are only modest top-ups. In addition, the guidance states that employers who avail of the TWSS are expected to make their best efforts to “maintain an employee's net income as close as possible to normal net income” for the duration of the subsidy.  The complainant did not receive what was properly payable to him and there was nothing set out in the scheme that prevented the respondent topping up the correct amount.

Section 5 of the Act was breached by the respondent and their failure to pay the Complainant for the hours he worked, is a deduction within the meaning of section 5 of the Act and that the full wage of €620 was properly payable as per section 6 of the Act.  Furthermore, the respondent failed to give notice before making the deduction.  No notice or consent was given to this deduction rendering it an unlawful deduction. 

The complainant gave evidence that he submitted his complaint on 24 February 2021 and in response to the cognisable period of 6 months namely, 25 August 2020 – 24 February 2021, which might exclude most of his complaint, the complainant submitted that the pandemic was an exceptional event.  His evidence was that he had made contact with many bodies including the WRC, Revenue and Citizen Advice to seek advice on his complaint and that nobody could give him answers.  He gave evidence that he knew that revenue was going to come after him and that they did with a tax bill. 

During cross examination, the complainant submitted he had a good relationship with the respondent and that there is a legal issue and a moral issue, and that the respondent was trying to shut down his complaint on a technicality.  The respondent failed to inform him in advance that they were placing him on the TWSS, and he only found out when he saw his wage slip.  It was confirmed by the complainant that he received a pay increase from the respondent about a year ago.  He could not recall if he asked to come off TWSS.  The complainant objected to the respondent questioning him on whether he received tax back from revenue during the year and asked how the respondent would know that as details regarding his tax circumstances is privileged information.

Case law cited included John Grimes v Iaronrod Eirean PW3/95.

The respondent submitted that the complainant is employed with them as a painter, and they have a good relationship.

The respondent saw their business suffer a significant downturn during the pandemic and availed of the Government’s TWSS which was a national measure taken by way of response to the COVID-19 crisis and a way for employers to maintain payment to employees during the pandemic.  The Respondent spoke with each of the employees and informed them of their requirement to avail of the TWSS, which was understood and accepted by each of their 5 employees.  The Respondent opted to pay the optional “top-up” payment in the amount of the difference between the TWSS amount and the net pay the Complainant would have received.

The TWSS was a necessary step for the Respondent to keep both the Complainant and other employees on payroll during times of closure and the diminished business capacity of the company due to COVID -19.

The complainant’s complaint relates to the payment of wages paid to him from 25 May 2020 to 28 August 2020 inclusive and the subsequent Revenue tax bill he received in respect of tax due in the sum of €1,016 but most of his complaint is now out of time.  The respondent while having much sympathy for the complainant denied they were “unfair and unjust” in their application of the TWSS.

The respondent rejects that the respondent applied the TWSS incorrectly.  The complainant addressed this issue with the Respondent who confirmed that their application of TWSS was correct following consultation with their financial advisor.  It was submitted that there was no contravention of the Act during the cognisable period.  It is the Respondent’s position that a deduction by way of a “net-down” of the Complaint’s pay was a requirement put in place by the Emergency Measures in the Public Interest (Covid -19) Act,2020 (the “2020 Act”) and it is this Act that sets out the provisions relating to the application of the Covid 19 TWSS.  It is the Respondent’s position that they correctly implemented and applied the TWSS in the manner as set out in the 2020 Act and in a manner identical to other business that also availed of the scheme.  Furthermore, by availing of these supports it allowed the respondent to maintain the employment of the complainant and his colleagues and avoid redundancy and/or lay-off measures.

Mr A gave evidence that the pandemic impacted their business significantly and that they have not hired new staff and do not have the same number of staff that they had before.  He gave evidence that he spoke to the complainant and advised him about TWSS.  Mr A denied that he could have given anymore as to do so would have run the business into the ground and that they inputted the hours into the computer system which advised them how much was to be paid.  Mr A gave evidence that he believed revenue got the scheme wrong and that he had sympathy for the complainant.  Under cross examination Mr A confirmed that the business did not fully close during the pandemic and that they brought back a small number of people to finish a job.  It was also confirmed by him that the complainant always disagreed with what had been done regarding the application of TWSS.

Mr B gave evidence that he advised the complainant about TWSS.  It was his evidence that even a year later he did not know if he fully understood the TWSS and that he was satisfied that the respondent was complying with the rules of it.  He submitted that he may have told the complainant to talk to the accountant directly and that he advised the complainant that revenue said the respondent was compliant by the manner in which TWSS was applied.  He confirmed that he did not tell the complainant that his gross would appear different, and that the respondent did not close completely during the covid shut-down. 

The complainant submitted that he did not receive monies properly payable to him between 25 May 2020 - 28 August 2020 and he submitted these complaints to the WRC on 24 February 2021.

Section 41(6) and 41 (8) of the Workplace Relations Act, 2015, provides as follows:

(6) Subject to subsection (8), an adjudication officer shall not entertain a complaint referred to him or her under this section if it has been presented to the Director General after the expiration of the period of 6 months beginning on the date of the contravention to which the complaint relates.

(8) An adjudication officer may entertain a complaint or dispute to which this section applies presented or referred to the Director General after the expiration of the period referred to in subsection (6) or (7) (but not later than 6 months after such expiration), as the case may be, if he or she is satisfied that the failure to present the complaint or refer the dispute within that period was due to reasonable cause.

Section 5 (6) of the Payment of Wage Act 1991sets out that:

 “Where— (a) the total amount of any wages that are paid on any occasion by an employer to an employee is less than the total amount of wages that is properly payable by him to the employee on that occasion (after making any deductions therefrom that fall to be made and are in accordance with this Act), or

(b) none of the wages that are properly payable to an employee by an employer on any occasion (after making any such deductions as aforesaid) are paid to the employee, then, except in so far as the deficiency or non-payment is attributable to an error of computation, the amount of the deficiency or non-payment shall be treated as a deduction made by the employer from the wages of the employee on the occasion”.

For a breach of the Payment of Wages Act to occur, the wages must be properly payable within the cognisable period.  The respondent submits that much of the complaint is out of time and that the complaints should be dismissed.  The complainant submits that the pandemic was exceptional and his failure to submit his complaint earlier was because he was awaiting answers to his many questions and therefore, is reasonable circumstances.  I note that the complainant made contact with numerous bodies regarding his queries around TWSS.  This might explain but does not excuse why he did not submit his complaint earlier and I am not satisfied that the complainant’s failure to present the complaint or refer the dispute earlier was due to reasonable cause.  I find that the cognisable relevant period for this complaint is between 25 August to 24 February 2021.

The complainant submits that the respondent paid a correct nett payment as a part of the TWSS but that he was not paid the appropriate gross payment amount.  The complainant submits that he received a request from Revenue for an outstanding balance of €1,016 and that if the respondent had paid him the appropriate payment this bill from Revenue would not have arisen.  The respondent submits that they have sympathy for the complainant, that Revenue may have erred in its application of TWSS but that the complainant has received monies back from Revenue and that the respondent implemented TWSS fully in line with Revenue’s instructions and statute.

The provisions relating to the application of the COVID-19 TWSS are set out in Part 7 of the Emergency Measures in the Public Interest (Covid-19) Act 2020.  Section 28(5) of the 2020 Act confirms that the payments which are made under TWSS are taxable in the hands of the employee but are not subject to payroll tax deductions by the employer as follows:

“(5) Where this section applies, then, following the notification by the employer of the payment of emoluments to a specified employee in the applicable period in accordance with Regulation 10 of the Regulations, the following provisions shall apply:

(a) the Revenue Commissioners shall pay to the employer in relation to the specified employee a sum (in this section referred to as a “temporary wage subsidy”) of an amount determined in accordance with subsection (6),

 (b) the payment referred to in paragraph (a) shall be made by way of bank transfer to the bank account of the employer, the details of which have been provided in accordance with subsection (4)(c),

 (c) where, under paragraph (a), a payment is required to be made to the employer in respect of each of 2 or more specified employees by the Revenue Commissioners, the payments under paragraph (a) may be aggregated by the Revenue Commissioners for the purposes of compliance with paragraph (b),

 (d) on the payment of the emoluments to the specified employee which are the subject of the notification first mentioned in this subsection by the employer, the employer shall include in that payment an additional amount equivalent to the temporary wage subsidy in relation to the specified employee,

 (e) notwithstanding any other provision of the Act, the additional amount paid by the employer to a specified employee in accordance with paragraph (d) shall not be regarded as emoluments of the specified employee for the purposes of Chapter 4 of Part 42 of the Act and the Regulations, but shall be treated as income chargeable to tax on the specified employee under Schedule E within the meaning of section 19 of the Act,

 (f) the employer shall include, and separately identify, in the statement of wages and deductions from wages required to be given by the employer to the specified employee under section 4 of the Payment of Wages Act 1991, details of the additional amount paid by the employer to a specified employee in accordance with paragraph (d) and that additional amount shall be treated as part of the gross pay of the specified employee for the purpose of the Regulations,

(g) where paragraph (d) applies, the employer shall treat the specified employee concerned as falling within Class J9 of Pay Related Social Insurance for the purposes of the employer’s obligations under Chapter 4 of Part 42 of the Act and the Regulations to report matters specified in that Chapter or the Regulations,

(h) the operation of paragraph (g) shall not prejudice the specified employee’s entitlement to benefits or assistance under the provisions of the Social Welfare Acts, but, where paragraph (d) applies in relation to a specified employee for any week, the specified employee shall not be entitled to any benefit or payment, related to Covid-19, from the Department of Employment Affairs and Social Protection for that week,

(i) notwithstanding any other provision of the Act, in computing the employer’s liability to income tax or corporation tax, as the case may be, the employer shall not be entitled to a deduction in respect of any additional amount paid to a specified employee in accordance with paragraph (d), and

(j) the employer shall comply with any other direction of the Revenue Commissioners that, by virtue of this paragraph, they may reasonably give regarding the reporting of the payment by the employer of an additional amount paid to a specified employee in accordance with paragraph (d), being a direction that facilitates the effective administration of this section. “

Section 28(6) of the Act confirms the subsidy is there to supplement netweekly pay and Section 28(18) of the 2020 Act provides that:

“(18) The administration of this section shall be under the care and management of the Revenue Commissioners and section 849 of the Act shall apply for this purpose with any necessary modifications as it applies in relation to tax within the meaning of that section.”

 Section 19 provides that

“The Revenue Commissioners shall prepare and publish guidelines with respect to the matters that are considered by them to be matters to which regard shall be had in determining whether a reduction, as referred to in subsection (3), will occur by reason of Covid-19 and the disruption that is being caused thereby to commerce. “

In line with this, this Act was supplemented by guidance published by the Revenue Commissioner’s “Frequently Asked Questions (FAQ V6) on: Guidance for PAYE Employees whose Employers have been affected by the COVID-19 Pandemic and are availing of the Temporary Wage Subsidy Scheme (TWSS).)

Section 20 of V6 provides that:

“Income Tax, USC and PRSI are not deducted from TWSS payments in the ‘live’ payroll environment.  However, you will be liable to Income Tax and USC on the subsidy payment by way of review at the end of the year. When this review is carried out, your unused tax credits may cover any further tax liability. Should an Income Tax liability arise, it is normal Revenue practice to collect any tax owing in manageable amounts. This would be done by reducing your tax credits for a future year(s) in order to minimise any hardship. Additionally, you may have tax credits to claim in respect of the 2020 tax year, for example health expenses, and this will also reduce any tax owed.”

I find that the application of TWSS and calculation thereof was given by Revenue and its application was prescribed by the rules of the 2020 Act and the Guidance published by the Revenue in respect of the Scheme.  If there any been any tax liability, it is clear from the foregoing that any tax liability, is a matter for the Complainant and not the Respondent.

Taking all the evidence and submissions into consideration I am satisfied that during the cognisable period the complainant was on notice of TWSS, and that the respondent applied TWSS in accordance with the Acts.  The monies which the complainant claims, are not properly payable to him in accordance with the Act.  The complaint is therefore, not well founded.

I find that the complaint is not well founded, and I dismiss the complaint.

Payment of Wages Act, Temporary Wages Subsidy Scheme, TWSS