Complainant

Respondent

Parties

Krzysztof  Lassota

Classic Marquees Ltd

Representatives

Deirdre Canty, SIPTU

Sineád Finnerty, Peninsula

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-00032873-001

11/12/2019

The Complainant commenced his employment with the Respondent on 1st April 2016. His employment terminated on 23rd October 2019.

On 11th December 2019, the Complainant referred a complaint to the Director General of the WRC alleging that the Respondent has not paid him or paid him less than the amount due to him.

The Respondent raised a preliminary matter in respect of time limits.

The Complainant’s cumulative income tax credit began exceeding his gross cumulative tax on week 16 of 2019, week commencing on 22nd April 2019. The complaint was received by the Workplace Relations Commission on 11th December 2019, in excess of seven months after the date of the contravention.

The Respondent submits that Section 6(4) of the Payment of Wages Act 1991, in relation to the timing of the claim, expressly states, “A rights commissioner shall not entertain a complaint under this section unless it is presented to him within the period of 6 months beginning on the date of the contravention to which the complaint relates or (in a case where the rights commissioner is satisfied that exceptional circumstances prevented the presentation of the complaint within the period aforesaid) such further period not exceeding 6 months as the rights commissioner considers reasonable.”

The Respondent refers to the judgement of Hogan J. in HSE v McDermott [2014] IEHC 331 at paras 15 and 16, “ For the purposes of this limitation period, everything turns, accordingly, on the manner in which the complaint is framed by the employee. If, for example, the employer has been unlawfully making deductions for a three-year period, then provided that the complaint which has been presented relates to a period of six months beginning “on the date of the contravention to which the complaint relates”, the complaint will nonetheless be in time.” “It follows, therefore, that if an employer has been making deduction X from the monthly salary of the employee since January 2010, a complaint which relates to deductions made from January 2014 onwards and which is presented to the Rights Commissioner in June 2014 will still be in time for the purposes of s. 6(4). If, on the other hand, the complaint was to have been framed in a different manner, such that it related to the period from January 2010 onwards, it would then have been out of time.”

This case was referred to in Elsatrans Limited v Joseph Tom Murray PWD1917, in which the Labour Court refused to allow the Complainant to amend their original complaint, by stating, “This Court’s jurisdiction derives from their being a decision at first instance in relation to a precisely stated statutory complaint referred to and decided by an Adjudication Officer. This Court has no jurisdiction to permit a Complainant to amend, at the appellate stage, his or her original complaint referred at first instance to the WRC.”

The framing of the claim is essential to ensure adherence to the time limit as set out in section 6(4) of the Payment of Wages Act, 1991. The Complainant does not refer to the dates of which the contravention began but appears to have valued the income tax deductions as amounting to €945.91. The Complainant claims there was an unlawful deduction, this is in the form of income tax. Therefore, the initial week in which the alleged unlawful deduction began was week 16.

The Respondent submits that this claim is statute barred in its entirety.

SIPTU on behalf of the Complainant submits that the complaint was received by the WRC on 11th December 2019 and the time period in scope is, therefore, 12th June 2019 (week 23)  to 23rd October 2019 (week 38).

The first matter I must decide is if I have jurisdiction to hear this complaint.

In making my decision, I must take account of both the relevant legislation and the legal precedents in this area.

The time limits for referring claims to the Director General of the WRC are set out in Section 41 of the Workplace Relations Act, 2015 which provides:-

“(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.”

In HSE v McDermott [2014] IEHC 331 the High Court considered in detail the wording of the time limits in payment of wages case and at paragraphs 14 to 16 stated:

“…the key question is the date of the contravention to which the complaint relates. In other words, time runs for the purposes of the Act not from the date of any particular contravention or even the date of the first contravention, but rather from the date of the contravention to which the complaint relates. As the EAT pointed out in its ruling on the matter, had the Oireachtas intended that time was to run from the date of the first contravention, it could easily have so provided.

15. For the purposes of this limitation period, everything turns, accordingly, on the manner in which the complaint is framed by the employee. If, for example, the employer has been unlawfully making deductions for a three year period, then provided that the complaint which has been presented relates to a period of six months beginning on the date of the contravention to which the complaint relates, the complaint will nonetheless be in time.

16. It follows, therefore, that if an employer has been making deduction X from the monthly salary of the employee since January 2010, a complaint which relates to deductions made from January, 2014 onwards and which is presented to the Rights Commissioner in June, 2014 will still be in time for the purposes of s. 6(4). If, on the other hand, the complaint were to have been framed in a different manner, such that it related to the period from January, 2010 onwards, it would then have been out of time.”

In light of the findings of Hogan J in HSE v McDermott, I have considered how the complaint was framed in this case. In the complaint referral form received by the WRC on 11th December 2019, the Complainant states that he should have received payment on 14th June 2019. This places the complaint within the acceptable limits of 6 months of contravention. In its submission, SIPTU is seeking a redress in respect of alleged underpayments for the period from 12th June 2019 to the termination of employment. I find, therefore, that the complaint is framed in a manner which allows me jurisdiction in the case.

In the complaint form, the Complainant alleged that on 14th June 2019 the Respondent did not pay him €945.91 in respect of his wages and €446.97 in respect of holiday pay not received.

SIPTU, on behalf of the Complainant submits as follows.

The Complainant was employed by the Respondent from 1st April 2016 to 23rd October 2019. His hourly rate of pay was €11.68.

It is contended that the Complainant agreed with the Respondent that, no matter the variation in hours of work, he would never be paid less than €500 net. It is also contended that he was not paid the appropriate amount of pay in lieu of annual leave at termination. It is, therefore, argued that the total amount of wages was less than the total amount of wages that was properly payable, which is deemed to be a deduction from pay by section 5(6) of the Act.

SIPTU submits that the complaint was received by the WRC on 11th December 2019 and the time period in scope is therefore 12th June (week 23) to 23rd October (week 38), relevant payslips were provided. Some payslips were missing, and the Complainant provided a pay figure based on his own records. Occasional cash payments were also taken into account.

SIPTU provided a table showing net pay (minus subsistence which is by definition not wages) and the deficit from the alleged agreement, which is €1,678.63.

In relation to the annual leave payment, SIPTU submits that the Complainant’s terminal payslip evidences a payment for “Holidays” of €967.10 in respect of 82.80 hours of leave. However, the Complainant claims that this payment should have taken account of 102.8 holiday hours and 8% of 249.75 cumulative hours owing at the end of the employment, i.e. 19.98 hours. 122.78 hours multiplied by the hourly rate of pay of €11.68 comes to €1,434.07 of which €967.10 was paid, leaving a deficit of €446.97.

The Complainant is seeking a compensation of €2,145.60.

Direct evidence and cross-examination of the Complainant

The Complainant said that he resigned because the verbal agreement was not fulfilled. He said that after he moved from working part-time to full-time, he was told that he would be paid €500 after tax. He said that at the time he applied for a job in another company, and the Director of the Respondent promised him €500 net. He asserted that he never got a new contract when he moved to a full-time position. He said that he decided to leave because of the money owed to him and because he had problem with his elbow. He said that after he had handed his notice, he looked for the outstanding money. The Complainant said that he spoke with the Director about how much he is owed and, subsequently, the Director rang him once or twice. He confirmed that he was phoned by the Gardaí in relation to the report by the Director.

In response to the Respondent’s question if the Complainant received the Respondent’s email of 4th March 2019 with the new contract attached, the Complainant confirmed that the email address to which it was sent is his, but he did not get this specific email. He said that the contract was signed by the Director but there was no Complainant’s signature.

The Complainant confirmed that the Director explained to him the tax implications and when the tax went up in week 16 they had a conversation. The Complainant confirmed that he never raised the issue of being paid less than €500 net prior to his resignation.

The Complainant confirmed that he received correspondence dated 1st November 2019 with attached calculations of wages and holiday pay owed to him. He said that when he got this paperwork, he had a conversation with the Director. The Complainant as unsure as to when he visited the office, he said it was “a few days later”.

Peninsula on behalf of the Respondent submits as follows.

The Complainant commenced employment as a General Operative with the Respondent on 1st April 2016 and resigned by way of letter dated 17th October 2019. The effective termination date was 23rd October 2019.

The Complainant was issued with a contract of employment on 4th  March 2019, the statement of main terms of employment outlined an agreed hourly rate of pay of €11.68 gross, working 39 hours per week plus a daily subsistence payment of €13.71, totalling to an additional €68.55 per week.

The Complaint alleges that he has not been paid the full balance of monies owed to him. He alleges this amount to the value of €945.91 in unpaid wages and a further €466.97 in outstanding annual leave due. The Complainant alleges that there was a verbal agreement that the Complainant would receive no less than €500 per week. This is denied by the Respondent.

Section 5(1) of the Payment of Wages Act, 1991 outlines that: “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.”

The Respondent submits that income tax in the form of PAYE and PRSI is a lawful deduction and falls within the meaning of Section 5(1)(a), as required by law. It is a well-established fact that any income is subject to the appropriate income tax deductions. This is further provided for by way of S.I. No. 345/2018 - Income Tax (Employments) Regulations 2018.

The Complainant’s contract entitled him to 39 hours per week at an hourly of pay of €11.68, he was further entitled to a daily subsistence of €13.71, amounting to €68.55 per week.

The Complainant received €524.07 gross pay for each week in which he worked his contractual hours. The Complainant’s cumulative income tax credit began exceeding his gross cumulative tax on week 16 of 2019, week commencing 22nd April 2019. This resulted in the Complainant on occasion receiving net pay below €500 per week.

After week 16 payment was made, the Complainant approached the Director to enquire as to why he received a lower wage in that week. The Director demonstrated on the payroll system and explained that his tax credit had exceeded his gross tax. The Complainant subsequently told the Director that tax was not his problem but the Respondent’s.

The Complainant alleged that there was a verbal agreement between the Respondent and Complainant that the Complainant would not receive less than €500 net pay per week. The Respondent refutes that there was any verbal agreement reached to this effect. The Complainant alleges that by failing to meet the requirements of the alleged agreement, the Respondent has made an unlawful deduction from his wages. The Respondent confirms that the only deductions made from the Complainant’s pay was income tax, payable by the Complainant, as required by law.

The Complainant has expressed his reluctance to pay income tax on a couple of occasions and has become quite agitated over same. Initially the deduction was explained to the Complainant by the Director of the Respondent, by demonstrating to him the payroll system. The Complainant refused to accept this and stated that “tax is your problem, not mine” and also requested that the Respondent would continue paying him “the same wages and pay his tax”. However, the Respondent considered the issue to be closed as the Complainant had not raised the issue until he had terminated the contract. The Complainant and the Director of the Respondent met on 1st November 2019, to discuss the final pay. The payment was agreed upon to an amount of €3,884.18 exclusive of taxes of €688.63, reflective of additional hours worked over busier periods. This payment was furnished to the Complainant. The Complainant made a request that there would be an exception made to allow a cash payment of monies owed, outside of payroll to allow for him to evade his tax liabilities. The Respondent rejected this suggestion and informed the Complainant that they both had a legal obligation to declare all income to the Revenue Commissioners so that it could be processed accordingly to fulfil their tax obligations. The Respondent submits that there were heated discussions on this date, as the Complainant did not want to fulfil his tax obligations and was adamant that the tax was the Respondent’s responsibility, he stated “no tax, my hours, I worked them, tax is your problem”. The Respondent informed the Complainant of their legal obligation and refused to pay the amount cash in an attempt to evade their tax liabilities. The Complainant become aggressive and stated, “ if you don’t pay me cash you will be very, very sorry when I meet you”. The incident has since been reported to An Garda Siochana.

It is demonstrated by way of tax deduction cards that the Complainant’s income tax increased from week 16 of 2019. This is as a result of his cumulative tax credit exceeding his cumulative gross tax. This provides that the difference is payable in the form of income tax. This is through no fault of the Respondent.

The Respondent submits that, as demonstrated by evidence provided at the adjudication hearing, the Respondent had never paid the Complainant any less than his gross pay of €455.52 for 39 hours of work per week and the weekly subsistence of €68.55 or more was paid to the Complainant each week. Income tax is the responsibility of each employee.

There is no evidence to support the verbal agreement the Complainant relies on. The express written terms of the employment contract outlines the hourly rate of pay and subsistence, both of which the Complainant has received. The Respondent will hold no responsibility for the Complainant’s income tax in the form of PAYE, PRSI and USC.

In relation to the annual leave claim, the Complainant alleges that the Respondent made an error in calculating the outstanding annual leave pay in his final payslip, resulting in a deficit to the value of €466.97. The Complainant submits that the amount owed was €1,434.07 for 122.79 hours, rather than the amount paid of €957.76 for 82 hours. This resulted in an actual deficit of €476.31.  The Respondent accepts that there was an error in calculating the Complainant’s outstanding annual leave payment upon termination of employment and is willing to pay the outstanding amount to the value of €476.31 gross, subject to income tax.

Direct evidence and cross-examination of the Director

The Director said that the Complainant commenced his employment with the Respondent on 1st April 2016. He was offered a full-time position in 2019 and a contract to that effect was issued on 4th March 2019 and emailed to the Complainant’s email address. The Complainant’s payslips were emailed to the same email address every week.

The Director said  that there was no verbal agreement with the Complainant.

He said that the Respondent would be busy in the summers so there has been an agreement (in the contract) that any extra hours would be banked and used up during the winter.

The Director said that when the Complainant’s tax changed, he spoke with the Complainant. The Director clarified the matter with his accountant and then explained to the Complainant the payroll calculations. The Complainant wasn’t happy with that. The Complainant said that tax was not his issue.  The Director said that he hasn’t heard from the Complainant until October. He said that the Complainant hasn’t raised any issues until his resignation. He said that he sent a letter of 1st November 2019 outlining the calculations of any outstanding monies.

In response to the Complainant’s assertions that there were conversations during the week 23rd October – 1st November 2019, the Director said that it was impossible as he was on annual leave between 17th and 29th October 2019.

The Director said that on 4th November 2019 the Complainant called in. The Director worked through the Complainant’s hours, had a friendly conversation. The Complainant then got annoyed and angry as he did not want to pay tax. The Complainant told the Director that he will be very, very sorry of he didn’t pay him. The Director said that he reported the matter to the Gardaí.

He said that the Complainant was paid through the payroll. The next communication was an email from SIPTU. The Director said that he replied to SIPTU on 12th December 2019 saying that the Complainant was issued with a contract of employment on 4th March 2019; he was paid in full in accordance with this contract; he left of his own free will; upon leaving employment he was owed 249.75 hours plus annual leave. The Director said in the letter that a request was made for the payment to be made outside of payroll and the Complainant threatened him when he refused. The Director also said that he was prepared to review the matter if SIPTU wished to forward the details to him.

It was put to the Director that an agreement was in place in relation to “banked“ hours. He was asked whether the agreement was a verbal one, similar to the one in respect of the Complainant’s wages. The Director confirmed that the agreement was in the contracts of employment.

It was put to the Director that the Complainant informed him that he was offered another job and that the Director promised him €500 net. The Director replied that everybody is entitled to apply for other jobs, there was no agreement in respect of €500 net. The Director confirmed that the full-time position was offered to the Complainant around the same time that he applied for another job. The Director confirmed that he did want to keep the Complainant but there was no agreement on the pay of €500.

In relation to the hours of work, the Director said that a book is kept where the employees put in and out times. It is an official record that was transported into an excel spreadsheet for the purposes of the adjudication hearing.

SIPTU put it to the Director that he is a “big man”, but he was shaken by the alleged threats and reported to the Gardaí. When asked, the Director confirmed that he did not follow up on his report.

Wages are defined in Section 1 of the Act in relevant parts as:-

“wages”, in relation to an employee, means any sums payable to the employee by the employer in connection with his employment, including—

(a) any fee, bonus or commission, or any holiday, sick or maternity pay, or any other emolument, referable to his employment, whether payable under his contract of employment or otherwise, and

(b) any sum payable to the employee upon the termination by the employer of his contract of employment without his having given to the employee the appropriate prior notice of the termination, being a sum paid in lieu of the giving of such notice: Provided however that the following payments shall not be regarded as wages for the purposes of this definition:

(i) any payment in respect of expenses incurred by the employee in carrying out his employment,

(ii) any payment by way of a pension, allowance or gratuity in connection with the death, or the retirement or resignation from his employment, of the employee or as compensation for loss of office,

(iii) any payment referable to the employee's redundancy,

(iv) any payment to the employee otherwise than in his capacity as an employee,

(v) any payment in kind or benefit in kind.”

Section 5 of the Act stipulates as follows:-

“5. Regulation of certain deductions made and payments received by employers

(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.”

In respect of the outstanding annual leave payment, I find that the Respondent conceded that the amount of €476.31 in outstanding annual leave is owed to the Complainant and undertook to pay this amount to the Complainant. I, therefore, declare this part of the Complainant’s claim to be well founded.

In relation to the claim of alleged underpayments of wages I find as follows.

In Marek Balans v Tesco Ireland Limited [2020] IEHC 55 Finnegan J. considered Section 5 of the Act as follows:

“36. The provisions of s. 5(6) of the Act of 1991 were considered by Finnegan P. in Dunnes Stores (Cornelscourt) Limited v. Lacey [2007] 1 I.R. 478. A Rights Commissioner had found in favour of the respondents holding that the cessation of service pay amounted to an unlawful deduction, which was upheld by the EAT. It was argued that the EAT should address the question of remuneration properly payable to an employee before considering the question of a deduction or whether a deduction was unlawful. Finnegan P. concluded at p. 482:-

“I am satisfied upon careful perusal of the documents relied upon by the respondents that the same cannot represent the agreement or an acknowledgement of the agreement contended for but rather contain a clear denial of the existence of any such agreement. No other evidence of an agreement was proffered. In these circumstances I am satisfied that the Employment Appeals Tribunal erred in law in failing to address the question of the remuneration properly payable to the respondents, such a determination being essential to the making by it of a determination. Insofar as a finding is implicit in the determination of the Employment Appeals Tribunal that the appellant agreed to pay to the respondents service pay and a long service increment, then such finding was made without evidence and indeed in the face of the evidence: I am satisfied that there has been no deduction of pay from the respondents within the terms of the Act of 1991 but rather their remuneration has been unilaterally increased by the appellant making a payment which recognises their long service in excess of that which was payable prior to the 18th September, 2002. In either case there has been an error or law. Accordingly I allow the appeal.””

The High Court made it clear that, when considering a complaint under the Act, the Adjudication Officer must first establish the wages which were properly payable to the employee before considering whether a deduction had been made. If it is established that a deduction within the meaning of the Act had been made, the Adjudication Officer would then consider whether that deduction was lawful.

It is for the Complainant to make out that the wages payable to him during the period encompassed by the claim are properly payable to him under the Act.

The Labour Court in Hannigans Butchers Limited v Jerko Anders Hresik Bernak DWT 194 held as follows;-

“This Court in Melbury Developments Ltd v. Arturs Valpeters EDA0917, in a case under the Employment Equality Acts, put it clearly in stating, ‘Mere speculation or assertions, unsupported by evidence, cannot be elevated to a factual basis upon which an inference of discrimination can be drawn’ and that ‘The Complainant must first establish facts from which discrimination may be inferred’. While these observations of the Court reference specific requirements under the relevant legislation, the sentiments are equally applicable to the exercise of rights under other Acts covering employment law. Indeed, it is a well-established general rule of evidence to quote Palles CB in Mahony v. Waterford, Limerick and Western Railway Co., (1900)2 IR 273,that ‘…it is a general rule of law that it lies upon the plaintiff to prove affirmatively all the facts entitling him to relief…’

In the present case, the Complainant submitted that an agreement was reached with the Respondent whereby no matter the variations in hours of work, he would never be paid less than €500 net. The Complainant asserted the non-payment of the same constituted a breach of the Payment of Wages Act. In denying this allegation, the Respondent submitted that no such agreement existed, and that the Complainant’s pay during the relevant period was his contractual rate of pay of €11.68  per hour.

The first point to be determined is whether the Respondent entered into an agreement to pay the Complainant the sum of not less than €500 net per week regardless the variations in hours worked. I note the conflict of evidence regarding this point.

I note that the Respondent exhibited at the adjudication hearing a document entitled “Full Time Job Offer” dated 6th February 2019. The document offered the Complainant a full-time position beginning on 4th March 2019. There is no reference to any agreement between the parties. The Respondent also exhibited an email dated 4th March 2019 which, the Respondent asserted was sent to the Complainant’s email address. The said email contained an attachment entitled “Kris Classic Marquees Terms of Employment Full Time 190304”. The attached document, which was exhibited at the hearing contained the Complainant’s terms and conditions of employment. In respect of “Payment”, the document stipulates as follows:-

“€11.68 per hour Subsistence allowance of €13.71 per day. Paid weekly, one week in arears. A payslip will be issued with each payment.”

The Complainant confirmed that the email address to which the Respondent sent the document was his email address. He confirmed that his payslips were emailed to this address weekly and he received them. However, he asserted that he did not receive this particular email containing his full-time contract. In light of the Complainant’s evidence that the email address in question was his email address and was the email address to which his weekly payslips, which he received, were sent, I find the assertion that he did not receive his contract implausible.

I note that the Complainant’s payslips, which he received on a weekly basis, clearly show the number of hours worked multiplied by his hourly rate of €11.68. I note that from week 16 of 2019, between 26th April 2019 and 27th September 2019 the Complainant was paid less than €500 on some 15 occasions. There was no dispute that the Complainant never raised the matter of the alleged underpayment until his resignation.

Having considered the submissions of the parties and all evidence adduced, I find that, apart from the Complainant’s own assertion, there was no evidence offered to me that would support the Complainant’s claim of a verbal agreement being in place. The contract of employment and the payslips provided corroborate the Respondent’s position that the Complainant’s rate of pay was €11.68 per hour when he was offered a full-time position. There was, therefore, a contractual commitment in place for this rate to be paid. This was the rate properly payable to the Complainant by his employer. I, therefore, declare this part of the Complainant’s claim to be not well founded.

I declare this complaint to be partially well founded. I direct the Respondent to pay the Complainant the sum of €476.31 in respect of outstanding annual leave.

Annual leave – underpayment- verbal agreement