FULL RECOMMENDATION
PARTIES : CARLOW COUNTY COUNCIL DIVISION :
SUBJECT: 1.Appeal Of Adjudication Officer Decision No(S)ADJ-00032324/CA-00042933-001 This is an appeal by the Mr Eamonn Coughlan (‘the Complainant’) from a decision of an Adjudication Officer (ADJ-00032324/CA-00042933-001, dated 10 August 2021) under the Organisation of Working Time Act 1997 (‘the Act’). Notice of Appeal was received by the Court on 15 September 2021. The Court heard the appeal in a virtual courtroom on 21 April 2022. The Claim The Complainant alleges that Carlow County Council (‘the Respondent’) has undercalculated his annual leave payment for the duration of his employment with it in so far as the Respondent has failed to include regular and rostered overtime and various allowances when calculating his holiday pay. He is seeking retrospective payment of the shortfall back to the date of commencement of employment in respect of all statutory and contractual annual leave availed of by him and compensation for the alleged breaches of the Act in this regard. He referred his complaint to the Workplace Relations Commission on 8 March 2021. The claim succeeded in part before the Adjudication Officer who states as follows in his written decision: “I declare that the respondent employer is required to calculate statutory holiday pay of 4 weeks based on the normal weekly rate that includes rostered overtime, the onsite allowance, and the on-call payment. … I determine that the annual leave shortfall should be based as follows: 4 weeks shortfall which is a weekly shortfall of €169.58 (normal weekly rate of pay €823.41-weekly basic pay of €658.83) = annual leave shortfall of €678.32. The total annual leave underpayment is €678.32. Based on the jurisprudence of the Court of Justice of the European Union, right accrues from the commencement of employment. The complainant commenced his employment on the 6th of June 1999 and claims 21.5 years. Based on the evidence the underpayment for the 4 weeks of statutory annual leave is 21.5 years x €678.32 = €14,583.88.” The Factual Matrix The Parties aread idemin relation to the material facts.The Complainant commenced employment in 1999 and is currently employed by the Respondent as a Driver/Plant operator A. The arrangements that apply to his current post include payment of daily ‘regular and rostered’ overtime of a half hour at time-and-a-half and a half hour at double time, which amounts to 8.75 adjusted hours per week. His basic pay is €1,307.66 per fortnight (€653.83 per week). He is also paid a non-taxable ‘eating on-site’ allowance of €9.50 per week and receives an on-call allowance of €80.62 per week for each of the six weeks per year for which is required to be on-call. He is entitled to twenty days’ annual leave per year i.e. twenty days’ statutory annual leave and five days’ contractual annual leave. The Complainant’s Submission The Complainant submits that his “normal weekly pay” for the purposes of calculating his pay during periods of annual leave should be reckoned as €832.41 (i.e. basic pay plus regular and rostered overtime and allowances). The Complainant relies on the decision of the Court of Justice of the European Union (‘the CJEU’) inLock v British Gas Trading Limited(2014) ICR 813 in support of his submission that overtime payments and allowances are reckonable for the purposes of calculating annual leave pay. Furthermore, he submits that – having regard to the decision of the Court of Appeal in Northern Ireland inChief Constable of the Police Service of Northern Ireland & Anor v Agnew(2019) NICA 32 (‘Agnew’) and the judgment of the CJEU inKing v Sash Window Workshop Limited(Case C-214/16) (‘Sash Windows’) – he is entitled to seek retrospection of any underpayments in respect of annual leave retrospective to the date his employment with the Respondent commenced in June 1999. The Respondent’s Submission The Respondent submits that it complies fully with sections 19 and 20 of the Organisation of Working Time Act 1997 and with the provisions of the Organisation of Working Time (Determination of Pay for Holidays) Regulations 1997. The Respondent further submits that it has gone above and beyond is statutory obligations in so far as it has entered into an agreement with the Complainant’s Trade Union to include regular and rostered overtime in the calculation of employees’ holiday pay. In the Respondent’s submission, none of the authorities cited by the Complainant support the retrospective element of his claim. According to the Respondent,Agnewis primarily concerned with the application of time limits as provided for in the relevant Regulations in place in Northern Ireland and is, in any event, under appeal to the UK Supreme Court. The Respondent also addresses the decision inSash Windows. It submits that that case is distinguishable on the facts from the within case as the Plaintiff, Mr King, had been denied any opportunity to avail himself of paid annual leave throughout his period of employment because he had been wrongly characterised as an independent contractor and commenced his litigation to seek payment in lieu of untaken annual leave on the cessation of his employment. Statutory Time Limit As stated previously, the Complainant referred his complaint under the Act to the Workplace Relations Commission on 8 March 2021. As his claim relates to the calculation of payment for annual leave (as opposed to the granting of annual leave), in the Court’s judgment, the cognisable period covered by the claim – having regard to section 41(6) of the Workplace Relations Act 2015 - is the period 9 September 2020 to 8 March 2021. It is also the Court’s judgment that none of the cases cited by the Complainant are authority for the Court assuming, on the facts of the within appeal, an enlarged temporal jurisdiction over and above that specified by the Oireachtas. For the avoidance of doubt, the Court fully accepts the Respondent’s submission that the judgments inSash Windowsand inAgnew, respectively, for the reasons stated, do not support the Complainant’s submission that this Court – were it to uphold the substance of his claim that overtime payment should be included in the calculation of payment for annual leave – can award redress retrospective to the date of commencement of his employment in 1999. Within the cognisable period, the Complainant availed himself of, and was paid for, annual leave as follows: 9 October 2020 – 8 hours; 23 October 2020 – 8 hours; 6 November 2020 – 16 hours; 20 November 2020 – 8 hours; 15 January 2021 – 32 hours. His pay in respect of this annual leave was calculated in accordance with his basic rate of pay. The Court’s Jurisdiction Confined to Statutory Annual Leave The within appeal is before the Court under the Organisation of Working Time Act 1997. The Act provides, inter alia, for an entitlement to a minimum period of annual paid leave, calculated in accordance with section 19 of the Act. The Complainant’s statutory annual leave entitlement is twenty days. He has a further contractual entitlement to five days’ leave annually. In dealing with a claim brought under the Act, the Court has no jurisdictionper sewith regard to a complainant’s extra-statutory leave. Calculation of Payment for Statutory Annual Leave The Organisation of Working Time Act 1997 was enacted to give effect toDirective 93/104/EC of 23 November 1993 of the Council of the European Communitieswhich delegated to the Member States of the European Union the right to determine all aspects of holiday pay, including its calculation. The Directive left it to national legislation to determine the conditions of entitlement to, and granting of, an employee’s paid annual leave, including the determination of the basis upon which payment is calculated for such periods of leave and the level of such payment. Section 19(1) of the Act provides for the calculation of statutory annual leave as follows: “(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(2) makes provision in general terms for the basis on which payment for statutory annual leave is to be calculated and subsection (4) of that section enables the Minister to promulgate regulations for the purpose of determining the manner in which “normal weekly rate [of pay]” is to be determined: “(2) The pay in respect of an employee's annual leave shall— (a) be paid to the employee in advance of his or her taking the leave, (b) be at the normal weekly rate or, as the case may be, at a rate which is proportionate to the normal weekly rate, and (c) in a case in which board or lodging or, as the case may be, both board and lodging constitute part of the employee's remuneration, include compensation, calculated at the prescribed rate, for any such board or lodging as will not be received by the employee whilst on annual leave. (3) …. (4) In this section “normal weekly rate” means the normal weekly rate of the employee concerned's pay determined in accordance with regulations made by the Minister for the purposes of this section.” The Organisation of Working Time (Determination of Pay for Holidays) Regulations 1997 SI No 475 of 1997 (‘the Regulations’) address these matters. Regulation 3(2) expressly and unambiguously excludes overtime from the calculation of annual leave pay. It provides: “(2) If the employee concerned's pay is calculated wholly by reference to a time rate or a fixed rate or salary or any other rate that does not vary in relation to the work done by him or her, the normal weekly rate of his or her pay, for the purposes of the relevant sections, shall be the sum (including any regular bonus or allowance the amount of which does not vary in relation to the work done by the employee but excluding any pay for overtime) that is paid in respect of the normal weekly working hours last worked by the employee before the annual leave (or the portion thereof concerned) commences or, as the case may be, the cesser of employment occurs.” This Court has addressed the issue of the non-inclusion of overtime in the calculation of annual leave having regard to Regulation 3(2) of SI 475 of 1997. See, for example, the Court’s Determination inMCM Security Limited v Tom PowerDWT0895 where the Court stated: “It is clear from the wording of both Regulation 3(2) and Regulation 5(1) that payment in respect of overtime is not reckonable in the calculation of pay for either annual leave and public holidays. The Union accepts that the Claimant’s normal pay is made up of 39 hours pay at the standard rate prescribed by the ERO for the sector and six hours overtime pay at the premium rate. It is clear that this overtime element is not reckonable in applying the formula prescribed by Regulation 3(2). It follows that the Claimant’s claim for the inclusion of this overtime in the calculation of the rate at which he is paid for annual leave cannot succeed in the present proceedings.” Allowances Received by the Complainant The Complainant is in receipt of two allowances which he submits ought to be reckonable for the purposes of calculating payment for annual leave: a non-taxable eating on-site allowance of €9.50 per week and an on-call allowance of €80.62 per week for each of the six weeks per year for which is required to be on-call. In the Court’s judgment, neither of these two allowances is comprehended by Regulation 3(2). The eating on-site allowance is not treated as pay for taxation purposes. The on-call allowance does vary in so far as it is only payable when the Complainant is actually available for on-call duty outside core hours on six pre-determined weeks in any year. Conclusion For the reasons set out in the body of this Determination, the Complainant’s claim for retrospective payment of alleged underpayment of annual leave back to the date of commencement of employment fails. The Court’s judgment is that its jurisdiction is limited temporally to the cognisable period referred to earlier and is confined also to considering the calculation of payment for statutory annual leave only. It is also the Court’s judgment that the Respondent has properly calculated the Complainant’s pay in respect of the statutory annual leave he availed himself of during the cognisable period comprehended by the claim having done so in accordance with SI 475 of 1997. The claim that the calculation of the Complainant’s annual leave for the purposes of the Act should include regular and rostered overtime and an amount in respect of the allowances he is in receipt of, has not been made out. The decision of the Adjudication Office is, therefore, set aside in full. The Court so determines.
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