FULL RECOMMENDATION
SECTION 28 (1), ORGANISATION OF WORKING TIME ACT, 1997 PARTIES : TIPPERARY COUNTY COUNCIL (REPRESENTED BY LOCAL GOVERNMENT MANAGEMENT AGENCY) - AND - MR PATRICK O'DONOGHUE (REPRESENTED BY SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION) DIVISION :
SUBJECT: 1.Appeal of Adjudication Officer's Decision No(s)ADJ-00033727, CA-00044579-001
It is common case between the parties that the Complainant works overtime every second week on a rota basis. The Complainant raised a complaint under the Organisation of Working Time Act, 1997, ‘the Act’ that his overtime payments were not being included in his holiday pay. An Adjudication Officer, ‘AO’, decided that the complaint was not well founded. The Complainant appealed this Decision to this Court. Summary of Complainant arguments. Since February 2006, the Complainant has worked regular and rostered overtime, working overtime on every second week. He has 25 days annual leave. He is paid €1255.12 per fortnight basic pay. His overtime equates to €265.48. Including overtime and on-site allowance, the Complainant’s normal weekly pay is €769.80. However, when on annual leave, he is paid only €627.56 per week. When the matter of holiday pay was raised with the Respondent, an offer of back pay for the overtime in his holiday pay was made to the Complainant but this only went back to 2019. The dispute centres on the amount of retrospection to apply. The Complainant is entitled to be paid back to February 2006. This is consistent with the caseChief Constable of the Police Service of Northern Ireland v Anor and Agnew (2019) NICA 32 (17 June 2019).While NI has different legislation, the decision in this case cites CJEU cases that must have direct effect in this Republic. InLevez v TH Jennings (Harlow Pools) Ltd (1999) ICR 521,the CJEI stated that in the absence of harmonisation, it is for Member States to determine the procedural conditions governing the protection of rights conferred by direct effect of Community Law. The 1993 Working Time directive was superseded by Directive 2003/88/EC and includes a statement that ‘the improvement of workers’ safety….and health is an objective which should not be subordinated to purely economic considerations’. This directive was transposed into law in our Act and ss.19 and 20 deal with the entitlement to leave and the times and pay for same. S.I. 475 of 1997 provides for calculating annual leave and Public Holiday pay, as follows; 3.(1) The normal weekly rate of an employee's pay, for the purposes of sections 20 and 23 of the Act (hereafter in this Regulation referred to as the "relevant sections"), shall be determined in accordance with the following provisions of this Regulation. (3) If the employee concerned's pay is not calculated wholly by reference to any of the matters referred to in paragraph (2) of this Regulation, the normal weekly rate of his or her pay, for the purposes of the relevant sections, shall be the sum that is equal to the average weekly pay (excluding any pay for overtime) of the employee calculated over— ( a ) the period of 13 weeks ending immediately before the annual leave (or the portion thereof concerned) commences or, as the case may be, the cesser of employment occurs, 5.(1) If the employee concerned works or is normally required to work during any part of the day which is a public holiday, then— ( a ) in case the employee's pay is calculated wholly by reference to any of the matters referred to in Regulation 3(2) of these Regulations, the relevant rate in respect of that public holiday shall be the sum that is equal to 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) paid to the employee in respect of the normal Daily hours last worked by him or her before that public holiday, ( b ) in any other case, the relevant rate in respect of that public holiday shall be the sum that is equal to the average Daily pay (excluding any pay for overtime) of the employee calculated over— (i) the period of 13 weeks ending immediately before that public holiday, S. m3(2) of the regulation applies to the Complainant. While s.2 excludes overtime, this was dealt with by the CJEU inLock v. British Gas Trading Ltd (2014) ICR813,in which it was noted that although the structure of the ordinary remuneration is determined by Member States, that structure cannot affect the rights of the worker to enjoy, during his rest and relaxation, economic conditions comparable to his employment. In the case ofSash Window Workshop Ltd v King (2018) IRLR142,the CJEU observed that any practice or omission that could deter a worker from taking annual leave is incompatible with the purpose of a right to annual leave. The Court went on to note that a practice of paying basic pay, as opposed to normal pay has the potential to act as a deterrent. Further, the Court noted that it was up to an employer to seek all information regarding their obligations. In this case, the failure by the Respondent to meet their obligations has meant that the Complainant has lost €14,000 since 2006. As the Court noted, an employer cannot be ‘unjustly enriched to the detriment of the very purpose of that directive’. By seeking to limit payment of what is owed to 2 years, the Respondent is seeking to be unjustly enriched. Therefore, annual leave payments must be based on ‘normal’ weekly pay, Member States are obligated to ensure paid annual leave and that because an employer cannot be ‘unjustly enriched’ to the detriment of the purpose of the directive, the amounts owed are retrospective to February 2006. Furthermore, in the Public Service occasional overtime is distinguished from regular and rostered overtime for superannuation purposes and the criteria applied are applicable in this case ie the overtime is not optional, the overtime is part and parcel of the employment and the work performed cannot be done during normal working hours. The total shortfall calculated for the payment due to the Complainant is €14,604. The AO erred in not recognising the regular and rostered nature of the overtime. The Complainant’s rights have been breached since 2006. Compensation is sought in line with the principles set out in Sabine von Colson v Elisabeth Kalmann v Land Nordrhein-Westfalen, which noted that compensation should act as a deterrent. Summary of Respondent arguments Article 7 of Directive 2003/88 leaves it to Member States to ensure that workers are given a minimum of four weeks’ paid leave. In Ireland this was legislated for in the Act. S.20(2) of the Act states that holiday pay shall be at the normal weekly rate and that ‘normal weekly rate’ shall be determined in accordance with regulations made by the Minister. This is defined in s.3 of SI 475/1997, (see above). The Complainant works overtime every second week and receives €253.06 in the week that he works overtime and zero in the week that he does not. In LCR 12762, the Labour Court recommended that overtime worked on a daily basis that is regular and rostered should be included in holiday pay but overtime shared on a rotational basis should not. In DWT0895, in a case under this Act, the Court noted that it was clear from the wording of s.3(2) and s. 5(1) of the regulations that payment in respect of overtime is not reckonable in the calculation of pay for either annual leave or public holidays. The Complainant is seeking retrospection to 2006 as if no limitation period applies. However, s.27(4) of the Act provides for a six month limitation for the presentation of a claim. S.2 of the Act defines ‘leave year’ and a complaint regarding annual leave must be brought within six months of the end of a leave year. This complaint was received on 11 June 2021. It can relate only to the leave year that ended on 31 March 2021. The Directive left it to Member States to determine all aspects of holiday pay. The Act addressed this. The Regulations that emanated from the Act are explicit as they relate to overtime. The Court is being asked by the Complainant to determine that the provisions of the Act that were construed in conformity with the Directive must be applied retrospectively in a wholly contradictory way, despite the Court, itself, excluding overtime from holiday pay in a number of decisions under the Act. The Respondent accepts the requirements on the Court to adopt the conforming interpretation obligation but to accept that it relates to its application from 2006 would mean that there is no limit to the operation of the conforming interpretation obligation. The Sash Windows case was grounded in argument regarding serious risk that a worker would not take leave. That is not applicable in this case and the Complainant has always availed of his leave entitlement. What is being sought is to compensate him for an opportunity that he has not missed. While the Court is obliged to follow CJEU rulings, the case law from that Court is limited to the facts of the individual cases and they do not support a claim for retrospection to 2006. The Court’s obligations to refer to a Directive when interpreting domestic law do not obligate it to apply retroactivity and the obligation cannot serve as the basis for an interpretation of nation law ‘contra legum’. In relation to the NI case3, this is subject to an appeal to the UK Supreme Court and also in NI there is no statutory basis limiting the application of unlawful deductions. In Ireland, there is cstatutory provision for limitations of six months. The attempts made by the Respondent to settle this case were voluntary and without prejudice. As these attempts were refused, they are deemed to be withdrawn. The applicable law. Organisation of Working Time Act 1997 Entitlement to annual leave. 19.—(1) Subject to theFirst 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. (2) A day which would be regarded as a day of annual leave shall, if the employee concerned is ill on that day and furnishes to his or her employer a certificate of a registered medical practitioner in respect of his or her illness, not be regarded, for the purposes of this Act, as a day of annual leave. (3) The annual leave of an employee who works 8 or more months in a leave year shall, subject to the provisions of any employment regulation order, registered employment agreement, collective agreement or any agreement between the employee and his or her employer, include an unbroken period of 2 weeks (4) Notwithstanding subsection (2) or any other provision of this Act but without prejudice to the employee's entitlements under subsection (1), the reference in subsection (3) to an unbroken period of 2 weeks includes a reference to such a period that includes one or more public holidays or days on which the employee concerned is ill. (5) An employee shall, for the purposes of subsection (1), be regarded as having worked on a day of annual leave the hours he or she would have worked on that day had it not been a day of annual leave. (6) References in this section to a working week shall be construed as references to the number of days that the employee concerned usually works in a week. Times and pay for annual leave. 20.—(1) The times at which annual leave is granted to an employee shall be determined by his or her employer having regard to work requirements and subject— (a) to the employer taking into account— (i) the need for the employee to reconcile work and any family responsibilities, (ii) the opportunities for rest and recreation available to the employee, (b) to the employer having consulted the employee or the trade union (if any) of which he or she is a member, not later than 1 month before the day on which the annual leave or, as the case may be, the portion thereof concerned is due to commence, and (c) to the leave being granted within the leave year to which it relates or, with the consent of the employee, within the 6 months thereafter. (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) 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. (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. S.I. No. 475/1997 of pay 3.(1) The normal weekly rate of an employee's pay, for the purposes of sections 20 and 23 of the the Act (hereafter in this Regulation referred to as the "relevant sections"), shall be determined in accordance with the following provisions of this Regulation. (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. (3) If the employee concerned's pay is not calculated wholly by reference to any of the matters referred to in paragraph (2) of this Regulation, the normal weekly rate of his or her pay, for the purposes of the relevant sections, shall be the sum that is equal to the average weekly pay (excluding any pay for overtime) of the employee calculated over— ( a ) the period of 13 weeks ending immediately before the annual leave (or the portion thereof concerned) commences or, as the case may be, the cesser of employment occurs, or ( b ) if no time was worked by the employee during that period, over the period of 13 weeks ending on the day on which time was 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.
5.(1) If the employee concerned works or is normally required to work during any part of the day which is a public holiday, then— (a) in case the employee's pay is calculated wholly by reference to any of the matters referred to in Regulation 3(2) of these Regulations, the relevant rate in respect of that public holiday shall be the sum that is equal to 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) paid to the employee in respect of the normal Daily hours last worked by him or her before that public holiday, (b) in any other case, the relevant rate in respect of that public holiday shall be the sum that is equal to the average Daily pay (excluding any pay for overtime) of the employee calculated over— i) the period of 13 weeks ending immediately before that public holiday, Workplace Relations Act 2015 41. (6) Subject tosubsection (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 insubsection (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.
The circumstances of this case are almost identical to those in the cases ofCarlow County Council v Mr. Eamon Coughlan, WTC/2123 and WTC/22/15,the only differences of note being in respect of the length of retrospection being claimed and the amounts involved. The arguments made by the parties regarding the issues of law are identical in every important respect. It follows, therefore, that unless some new arguments or relevant facts arise in the instant case, the Court will follow the Determinations in those cases. In those cases, the Court noted that ordinarily the cognisable period provided for in our law is the 6 months prior to a complaint being made under the Act and that the Court’s judgement is limited temporally to this period. The Court went on to have regard to S.I. 475/1997 and noted that the calculation of holiday pay excluding overtime payments was in accordance with that Instrument. Accordingly, the appeals in those cases were deemed to have failed. The Court follows these Determinations in the instant case for the reasons outlined in the cases referred to above. Determination. The Decision of the Adjudication Officer is upheld.
NOTE Enquiries concerning this Determination should be addressed to David Campbell, Court Secretary. |
