FULL RECOMMENDATION
PARTIES : BOTHAR COMPANY LIMITED BY GUARANTEE DIVISION :
SUBJECT: 1.Appeal Of Adjudication Officer Decision NoADJ-00033465. However, when the Complainant’s employment was terminated by reason of redundancy in May 2021 the employer deliberately refused to comply with their own handbook or the Act and she was not paid for the outstanding annual leave. The handbook in the employment states that if an employee leaves the employment before taking any accrued holidays he or she will receive payment for those holidays. The Act at Section 23 provides that: 23.(1) (a) Where — (i) an employee ceases to be employed, and (ii) the whole or any portion of the annual leave in respect of the relevant period remains to be granted to the employee, the employee shall, as compensation for the loss of that annual leave, be paid by his or her employer an amount equal to the pay, calculated at the normal weekly rate or, as the case may be, at a rate proportionate to the normal weekly rate, that he or she would have received had he or she been granted that annual leave. The Complainant had carried forward annual leave into 2021 and the accrued annual leave for 2021 had not been availed of and was not compensated by the employer on termination of employment. The Act at Section 20(3) provides as follows: (3) Nothing in this section shall prevent an employer and employee from entering into arrangements that are more favourable to the employee with regard to the times of, and the pay in respect of, his or her annual leave. The Complainant’ representative submitted when questioned by the Court that the meaning of this section of the Act was that wherever an employer afforded to an employee entitlements which are greater than those specified in the Act, such a concession or agreement with the worker becomes the statutory entitlement to annual leave to be compensated for on termination of employment. The representative further submitted that, whereas section 23 of the Act makes provision for compensation in respect of the statutory entitlement to annual leave in the year in which the termination occurred and in the annual leave year preceding that year, the statutory entitlement to annual leave encompasses all annual leave entitlement in those years including any annual leave brought forward from previous years into those years. The representative provided the Court with an earlier decision of an Adjudication Officer where, it was contended, the Adjudication Officer ‘awarded the full annual leave entitlement to the employee on termination of her employment’. The Complainant also provided the Court with decisions of this Court [Kennedy’s Bar and Café Bar Ltd v A Worker DWT26/2000 and Cementation Skanska v Carroll DWT 38/2003] in which, she contended, this Court recognised that where the right to annual leave is infringed, the redress provided “should not only compensate for economic loss sustained but must provide a real deterrent against future infractions” The Complainant also made reference to a system of ‘Tokens’ which had been in place in the employment and through which the Complainant had accrued a right to annual leave over a period of years and which formed part of her entitlement to annual leave in the annual leave year beginning on 1stApril 2020 and the year beginning 1stApril 2021. The Complainant submitted that, whereas she received compensation for 11 days annual leave on the termination of her employment, a combination of annual leave carried over into 2020 and not taken, 14 days’ leave accumulated through the token system and not taken, and annual leave not taken in 2020 and 2021 amounted to 53 days in addition to the 11 days paid on termination. The Complainant gave evidence to the effect that a carry-over system was in place in the organisation with the approval of management and that a ‘token’system was in place with the approval of management. She stated in evidence that she agreed that between 1stApril 2020 and the date of termination of her employment she had taken three days annual leave but could not recall whether she had taken annual leave on another date contended for by the Respondent. In summary, she agreed that she had taken three days leave in the period and could not recollect if she had taken a fourth. SUMMARY POSITION OF THE RESPONDENT: The Respondent submitted that the claim for annual leave carried over from previous years is almost entirely statute barred and referred to section 20 of the Act in support of that contention and also to the case ofRoyal Liver Assurance Ltd v Macken [2002] IR 427to establish that a worker’s consent is required in order for an annual leave year to be extended. The Respondent submitted that the Complainant at no time sought or gave consent to the extension of an annual leave year. It was submitted that carry over of annual leave was provided for in the employment only if approved by the Chief Executive or Deputy Chief Executive. Carry over of leave was a potential benefit rather than an entitlement. The Complainant has not particularised any occasion when carry over of annual leave was approved. Similarly, she has failed to particularise and/or prove adequately how and / or when she given the tokens. The Respondent submitted that the Complainant took four days annual leave in the statutory annual leave year beginning 1stApril 2020 and no annual leave in the statutory annual leave year beginning 1stApril 2021. Testimony was given on behalf of the Respondent to the effect that a system of recording Annual leave was in place in the employment and that those records, which included e-mails, demonstrated that the Complainant had taken four days leave on dates specified in evidence on behalf of the Respondent. The Act at Section 19 in relevant part provides as follows: 19.— (1) Subject to the First Schedule (which contains transitional provisions in respect of the leave years 1996 to 1998), an employee shall be entitled to paid annual leave (in this Act referred to as “annual leave”) equal to— (a) 4 working weeks in a leave year in which he or she works at least 1,365 hours (unless it is a leave year in which he or she changes employment), (b) one-third of a working week for each month in the leave year in which he or she works at least 117 hours, or (c) 8 per cent. of the hours he or she works in a leave year (but subject to a maximum of 4 working weeks): Provided that if more than one of the preceding paragraphs is applicable in the case concerned and the period of annual leave of the employee, determined in accordance with each of those paragraphs, is not identical, the annual leave to which the employee shall be entitled shall be equal to whichever of those periods is the greater. Section 20 of the Act in relevant part provides as follows: Times and pay for annual leave. 20(3) Nothing in this section shall prevent an employer and employee from entering into arrangements that are more favourable to the employee with regard to the times of, and the pay in respect of, his or her annual leave. Section 23 of the Act in relevant part provides as follows: Compensation on cesser of employment. 23.(1) (a) Where — (i) an employee ceases to be employed, and (ii) the whole or any portion of the annual leave in respect of the relevant period remains to be granted to the employee, the employee shall, as compensation for the loss of that annual leave, be paid by his or her employer an amount equal to the pay, calculated at the normal weekly rate or, as the case may be, at a rate proportionate to the normal weekly rate, that he or she would have received had he or she been granted that annual leave. b) In this subsection — ‘relevant period’ means — (ii) in relation to a cessation of employment of an employee to whom subparagraph (ii) of the said paragraph (c) applies, that occurs during the first 6 months of the current leave year — (I) the current leave year, and (II) the leave year immediately preceding the current leave year, Discussion and conclusions The matter before the Court is a complaint that the Complainant was not afforded her statutory rights upon cesser of her employment as set out in the Act at Section 23. She contends that: (a) She had, by agreement with the employer, an allocation of 25 days’ annual leave per annum and this agreement with the employer formed her statutory entitlement to annual leave under Section 19 of the Act and any such leave which had not been availed of by her became payable to her on cesser of her employment by application of the Act at Section 23. .(b) She had ‘carried over’ annual leave into the statutory annual leave year beginning 1stApril 2020 and this ‘carried over’ leave formed part of her statutory entitlement to annual leave in annual leave year beginning 1stApril 2020 and thus became payable to her on cesser of her employment by application of the Act at Section 23. ‘Carried over’ leave is leave to which she was entitled in previous annual leave years, but which were not availed of by her. (c) She had accrued an entitlement to time off through the operation of a ‘token’ system in the employment and all such accrued time off ‘carried over’ into annual leave year beginning 1stApril 2020 and formed a statutory entitlement under Section 19 of the Act and thus became payable to her on cesser of her employment by application of the Act at Section 23. The ‘token’ system awarded the complainant a series of ‘tokens’ worth one hour off work and she had accrued a significant amount of such tokens which had not been exchanged for time off by 1stApril 2020 and were consequently ‘carried over’ into that statutory annual leave year. The parties are disagreed as to the level of annual leave taken by the Complainant in the statutory annual leave year commencing on 1stApril 2020. There is no dispute between the parties that, prior to the termination of her employment in May 2021, the Complainant took no annual leave in the statutory annual leave year commencing 1stApril 2021. The Respondent has submitted and given evidence to the effect that records held by the Respondent demonstrated that the Complainant took four days’ annual leave on specified days in the statutory Annual Leave year commencing on 1stApril 2020 and ending on 31stMarch 2021. In her evidence to the Court the Complainant accepted that she had, in the statutory annual leave year commencing on 1stApril 2020, availed of three days’ annual leave on days specified by the Respondent in evidence and she stated that she could not recall whether she had taken annual leave on the fourth day specified by the Respondent in evidence. In those circumstances, the Court accepts the evidence of the Respondent that the Complainant availed of four days’ annual leave in the statutory annual leave year beginning on 1stApril 2020. The Complainant was entitled under the Act at Section 19 to annual leave equal to four working weeks in the statutory annual leave year beginning on 1stApril 2020. In the case of the Complainant, an entitlement to annual leave equal to four working weeks amounts to twenty days’ annual leave. By pro-rata calculation, her statutory entitlement to annual leave in the period of the statutory annual leave year commencing on 1stApril 2021 and ending upon the date of termination of her employment, was three days’ annual leave. It is common case that, by agreement in the employment, the agreed amount of annual leave available to the Complainant was twenty-five days in a calendar year. The Court notes that, notwithstanding the Complainant is agreed by the parties to have, at any material time, availed of only a very small proportion of her entitlement to annual leave as provided for by the Act or available to her by agreement in the employment, no submission has been made that the Respondent impeded, obstructed or otherwise prevented her from availing of her statutory entitlement to annual leave. On plain reading of the Act at Section 19(1)(a), the Complainant was, under the Act, entitled to 20 days statutory annual leave in the statutory annual leave year beginning 1stApril 2020. The Court has earlier concluded that the Complainant availed of only four days of her statutory entitlement to annual leave in that annual leave year. The Complainant’s employment terminated in May 2021. Her statutory entitlement to annual leave year in the annual leave year beginning on 1stApril 2021 and ending on the date of termination of her employment was, by pro-rata calculation, 3 days. It is common case that the Complainant availed of none of that entitlement. The Act at Section 23, in relevant part, sets out that 23.(1) (a) Where — (i) an employee ceases to be employed, and (ii) the whole or any portion of the annual leave in respect of the relevant period remains to be granted to the employee, (b) In this subsection — ‘relevant period’ means — (ii) in relation to a cessation of employment of an employee to whom subparagraph (ii) of the said paragraph (c) applies, that occurs during the first 6 months of the current leave year — (I) the current leave year, and (II) the leave year immediately preceding the current leave year, At the date of the termination of her employment the Complainant had availed of four days’ annual leave in the period beginning on 1stApril 2020 and ending on the date of termination of her employment. In that same period, her statutory entitlement to annual leave amounted to 23 days. Consequently, at the date of termination of her employment, the Complainant had accrued 19 days statutory entitlement to annual leave which she had not availed of in the period. It is common case that the Respondent paid to the Complainant, on cesser of her employment, an amount equal to the pay that she would have received had she availed of 11 days annual leave. By application of section 23 of the Act however, the Complainant was entitled to be compensated in respect of 19 days as set out above. Consequently, the Court concludes that, on plain reading of the Act, the Respondent has breached the Act at Section 23 as a result of its failure to pay to the Complainant, on cesser of her employment, an amount equal to the pay that she would have received had she availed of 8 days’ annual leave to which she had been entitled under the statute. The Court, at its hearing, made extensive efforts to encourage the Complainant to make submissions or provide authorities to support a contention that the Act at Section 23 afforded a right to her, upon cesser of her employment, to be paid in respect of annual leave which had not been availed of beyond the quantum arising from her entitlement under the statute at Section 19 and not availed of in the ‘relevant period’specified at Section 23 of the Act. In support of its contention, the Trade Union submitted that the Act at Section 20(3) provides that arrangements entered into between a worker and an employer take on the character of a statutory entitlement once concluded. The Trade Union contended that, consequently, having regard to the agreement between the employer and the worker that she was entitled to avail of 25 days annual leave in a leave year, the Complainant’s statutory entitlement to annual leave in the statutory annual leave year beginning on 1stApril 2020 amounted to 25 days rather than the 20 days provided for in Section 19 of the Act. She also contended by the same reasoning that all annual leave howsoever accrued in years prior to 1stApril 2020, including through the ‘tokens’ system, and not availed of by her, took on the character of a statutory entitlement to annual leave in annual leave years beginning on 1st April 2020 and 1stApril 2021. Section 20(3) of the Act concerns itself with ‘Times and Pay’for Annual Leave and provides as follows: Times and pay for annual leave. 20(3) Nothing in this section shall prevent an employer and employee from entering into arrangements that are more favourable to the employee with regard to the times of, and the pay in respect of, his or her annual leave. The Court does not accept that Section 20(3) of the Act has the meaning ascribed to it by the Complainant. It is a provision relating to times and pay for annual leave and is a provision which makes clear that parties are not limited in their arrangements by the minimum entitlements accruing to an employee under the statute. The Complainant provided the Court with no basis in European law for the contentions made by her but did refer to two decisions of this Court and to a decision of an Adjudication Officer. The Court is satisfied that the two decisions of this Court referred to by the Complainant do not have the meaning ascribed to them by her but that they are authority for the proposition that, arising from the decision of the CJEU inSabine von Colson and Elisabeth Kamann v Land NordrheinWestfalen (Case 14/83), redress awarded in the case of a breach of entitlement in domestic law deriving from a Directive of the EU should be such as to have a deterrent effect and amount to more that purely nominal compensation. The Complainant however did not set out to the Court how the meaning of Section 23 of the Act can be established by reference to these two decisions. Similarly, the Court can find no basis, in law or in the ratio of that decision, to conclude that the decision of an Adjudication Officer can be relied upon by this Court as an authority for the contention of the Complainant as regards interpretation of the Act at Section 23. The Court therefore concludes that the Act can only be interpreted by this Court as having the plain meaning of its provisions. On that basis the Court concludes that the entitlement of the Complainant on cesser of her employment was limited to that amount of her statutory entitlement to annual leave afforded to her by the Act at Section 19 which she had not availed of in the period from 1stApril 2020 to May 2021. The Court concludes that a contention that the Act can be interpreted so as to mean that the Complainant’s statutory entitlement to annual leave under Section 19 of the Act included amounts of leave in excess of the amounts specified under Section 19 of the Act and agreed between herself and the Respondent including through an agreed ‘tokens’ system’, is misconceived. Similarly, a contention that the scope of Section 23 of the Act extends to the Complainant’s statutory entitlement to annual leave in any year prior to the statutory annual leave years beginning on 1stApril 2020 and 1stApril 2021, is also misconceived. For these reasons therefore, the Court concludes that, by operation of the Act at Section 23, the Respondent was in breach of the Act as a result of its failure to pay to the Complainant, on cesser of her employment, an amount equal to the pay that she would have received had she availed of 8 days’ annual leave to which she had been entitled under the statute.
The Court therefore awards the Complainant compensation in an amount of 8 days’ pay and a further amount of €500. The Court is satisfied that this award is just and equitable in all of the circumstances and that it applies appropriately the decision of the CJEU in C-14/83 Von Colson and Karmann v Land Nordrhein-Westfahlen [1986] C.M.L.R 430. The decision of the Adjudication Officer is set aside. The Court so decides.
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