FULL RECOMMENDATION
PARTIES : HOMEBOND TECHNICAL SERVICES LIMITED DIVISION :
SUBJECT: 1.Appeal of Adjudication Officer Decision No(S) ADJ-00030850, CA-00041150-001 This is an appeal by Homebond Technical Services Limited, ‘the Respondent’, of a Decision of an Adjudication Officer, ‘AO, that they had breached the rights of Mr. Faulkner, ‘the Complainant’, under the Payment of Wages Act, 1991, ‘the Act’. When the Complainant left the Respondent’s employment in October 2020, the Respondent withheld an amount of €3,901.12 gross, (net €2888.35) in wages in order to recoup expenditure on course fees. The Complainant lodged a complaint with the Workplace Relations Commission, which was upheld. The Respondent appealed to this Court. Summary of Respondent arguments. The AO erred in law in finding that the Respondent had insufficient grounds to rely on s. 5(2) of the Act. The Respondent’s Employee Handbook 2020 states that it forms part of the terms and conditions of employment. The handbook also states that it shall apply where there are conflicts with employee contracts and, further, in the event of ambiguity or doubt as to the meaning of any statement in the handbook, a ruling by the Managing Director shall be conclusive. The AO also failed to consider that the 2020 handbook states that it supersedes all previous arrangements, undertakings etc between employees and the Respondent. The AO relied strongly on the words ‘seek to recoup’ in the Educational Assistance Policy section of the handbook and failed to consider the additional words ‘including by way of deduction from salary or expenses owed’. The AO also failed to take account of the Termination of Employment section of the handbook, which states, ‘The Company also reserves the right to deduct monies owed to it by the employee from the final pay cheque’. The AO failed to take account of the previous handbook from 2004, which provided for the Respondent’s right to amend policies and procedures therein. The AO disregarded the clear and unambiguous right of the Respondent to request an employee to commit to the Respondent where the Respondent contributes financially to educational courses, as set out in the factual matrix of the 2004 handbook, which provided that an employee ‘may be asked to commit to the company for a period of time’), the Complainant’s 2018 contract,( which provides that payment of fees was subject to successful completion of the course and ‘continuing employment for a timeframe thereafter as considered appropriate at the sole discretion of the company’), and the 2020 handbook. The AO incorrectly relies onDelvin v. ESB, (2015) 26 ELR 278to conclude that the company waived its right to be allowed to request the employee to commit to the company for a period of time, where it is clear that the company retained that unfettered right. This was clear from the contract and in the 2020 handbook in which the period is specified as two years. The AO incorrectly relies onCiti Jet DAC v. David Ryan PWD 204andCleary v. B and Q Ireland (2016) 1 IR 276as the facts of this case can be distinguished fromCiti Jet,which involved a training bond, and fromCleary,which concerned an unrelated dispute regarding a bonus and a zone allowance, while overlooking the terms of the 2020 handbook, which came into force prior to completion of the course and prior to the deduction of monies. The AO failed to take account of the reasonable expectation of the Respondent that an employee should commit to the company if they receive financial assistance for an educational course and that it is reasonable for the Respondent to impose a penalty where an employee fails to commit, as set out in the 2020 handbook. The AO failed to apply any weight to the fact that the Complainant did not invoke the Complaints Procedure and/or the Grievance Procedure. The AO failed to apply any weight to the fact that, prior to accepting a permanent position with the company in January 2020, the Complainant had been given an opportunity to review the handbook, had not offered any views either then or at a contract review meeting on 26 February 2020, at which stage the handbook was in force. The Complainant was engaged initially in 2018 on a fixed term contract, which was made permanent in following that meeting, with back-dated effect to end January 2020. Summary of Complainant arguments. The Respondent made an unlawful deduction from wages, in contravention of s.5 of the Act. There was no prior contract, agreement or arrangements regarding an obligation to pay back fees that had been paid by the Respondent. When the course was commenced in late 2019, the Complainant’s terms and conditions were set out in the 2018 contract which stated that payment of fees will be subject to ‘…continuing employment for a timeframe thereafter as considered appropriate at the sole discretion of the company’ and in the 2004 handbook that was current at that time, which stated ‘Where the company contributes financially to the courses, the employee may be asked to commit to the company for a period of time’. In an email exchange with the Respondent’s Managing Director in September 2019, the Complainant sought payment of fees for the relevant course and this was agreed. No request was made for agreement to commit to the company for a period of time nor was there any reference to repaying fees. The 2020 handbook, which specified a requirement that those whose educational fees would be paid would be required to remain with the company for two years was not in place at the time the course commenced and when financial aid was requested. The Complainant would not have undertaken the course and/or requested fees payment if he had prior knowledge of a requirement to be made to the company. There was no agreement in place that allowed money to be withheld from the Complainant. The applicable law Payment of Wages Act, 1991 Regulation of certain deductions made and payments received by employers. 5.— (1) An employer shall not make a deduction from the wages of an employee (or receive any payment from an employee) unless— (a) the deduction (or payment) is required or authorised to be made by virtue of any statute or any instrument made under statute, (b) the deduction (or payment) is required or authorised to be made by virtue of a term of the employee's contract of employment included in the contract before, and in force at the time of, the deduction or payment, or (c) in the case of a deduction, the employee has given his prior consent in writing to it. (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 insubparagraph (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. Deliberation. The Act is very clear that deductions from wages are not permitted except in very particular circumstances. In the instant case, the issue for the Court is whether the Respondent in withholding payment of wages from the Complainant was entitled to do so in accordance with s.5(1) (b) of the Act and/or s. 5(2)(i) of the Act, both of which are set out above. The Respondent in submissions to the Court relied heavily on the employee handbook issued in January 2020 for the authority to make the deductions at issue. The Court notes and accepts that the Complainant’s contract from 2018 makes it clear that its terms cannot be viewed in isolation from the Respondent’s employee handbook. However, the Court notes also that the 2020 handbook was not in place in September 2019 when agreement was reached between the parties that the Respondent would pay the relevant course fees. The Respondent’s arguments that the terms of the new handbook were known to the Complainant, that the handbook was clear in making provision for a requirement that recipients of course fees were required to remain with the company for two years and that the Complainant had offered no objection are, in the view of the Court, irrelevant to the case before it. New arrangements cannot be used retrospectively to justify a deduction from wages. There is no doubt that the 2004 handbook was operative in September 2019 when agreement was made between the parties regarding the funding of the course fees and it is to that handbook and to the 2018 contract that the Court must give attention in considering this matter. The only relevant provision in the 2004 handbook was, ‘Where the company contributes financially to the courses, the employee may be asked to commit to the company for a period of time’. The use of the word ‘may’ is permissive rather than definitive. In any event, there is no reference to, nor can agreement be implied to, a right to make deductions from wages solely on the basis of this provision. The 2018 contract is, on the face of it, more definitive. It provides that payment of fees will be subject to ‘continuing employment for a timeframe thereafter as considered appropriate at the sole discretion of the company’. This, clearly, allows the Respondent to fix a timeframe for a recipient to remain with the Respondent after fees are paid. However, crucially, it makes no provision for any deduction from wages in the event that an employee failed to remain in the employment for the requisite time. Therefore, in the view of the Court, in and of itself, this provision is insufficient in meeting the requirements of s.5(1) (b) or s. 5(2)(i). That deficiency of clarity could quite easily have been resolved had the Respondent exercised the right provided for in the contract when agreeing to pay the fees by stipulating that such agreement was subject to the terms of the Complainant’s contract, by specifying the requisite period for the Complainant to remain in the employment and, crucially, by specifying that any failure to meet these requirements would render the Complainant liable to refund the amounts concerned while clarifying that the Respondent would reserve the right to effect any such refund by deductions from wages. If the Respondent had then required the Complainant to agree these terms as a condition of agreement to pay the fees and if such agreement had been forthcoming, the Respondent would have been well within its rights to act as they did in making deductions. However, the Respondent relied on provisions in a handbook and in a contract, neither of which were specific enough to enable them to act as they did. As a result, the Complainant never agreed to the deductions concerned, had no way of knowing that the deductions would be made and entered into commitments without being in full possession of all facts. Ultimately, the Complainant is entitled to the protections of the Act because the Respondent failed to attain the authority necessary under the Act to make the deductions concerned. Accordingly, the Respondent’s appeal must fail. Determination The Decision of the Adjudication Officer is upheld.
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