FULL RECOMMENDATION
SECTION 7(1), PAYMENT OF WAGES ACT, 1991 PARTIES : GREYHOUND RACING IRELAND (REPRESENTED BY HR DUO) - AND - MR. JOHN KILMARTIN (REPRESENTED BY SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION) DIVISION :
SUBJECT: 1.Appeal Of Adjudication Officer Decision No. ADJ-00031766 CA-00042249-001 This is an appeal by Mr. Kilmartin, ‘the Complainant’ of a Decision by an Adjudication Officer, ‘AO’, under the Payment of Wages Act, 1991,’the Act’, that his employer, Greyhound Racing Ireland, ‘the Respondent’, had made an unlawful deduction , contrary to the terms of the Act, from his wages. The Complainant is a full-time groundsman in Galway Greyhound Stadium. He earns a weekly wage of €601.38 for a 39 hour week. It is not in dispute that throughout his employment, the Complainant was paid double time for working during Galway Race week, without a requirement to work additional hours. In 2020 during the Covid pandemic, the Respondent had race meetings behind closed doors in that week. Double time was not paid. It is the position of the Respondent that this arrangement is by way of a discretionary bonus. It is the contention of the Complainant that this payment forms part of his contract of employment by virtue of custom and practice. The matter was referred to the Workplace Relations Commission and the Complainant has appealed the outcome. Summary of the Complainant’s arguments There is no provision in the Complainant’s contract of employment that authorises the deduction made from his wages. Galway Race week has always been paid at double time and, accordingly, by virtue of custom and practice, this forms part of the Complainant’s contract with the Respondent. Nothing in s. 5 (1) of the Act authorises the deduction made. No consent was given for the deduction. The concept of custom and practice was referred to inDevonald and Rosser (1906) 2KB 728as ‘A custom so universal that no workman could be supposed to have entered into this service without looking to it as part of the Contract’, (see also the EAT case ofSteffan Chmiel and others v. Concast Precast Limitedand the Labour Court case ofPanel Duct v. Brian Mulhareand an AO Decision inA Project Coordinator v. A Translation/Interpretation Service. Summary of Respondent’s arguments There are currently two race nights each week in Galway Stadium. Historically in Galway Race Week, in order to maximise commercial revenue, the venue would host additional meetings/activities. Up to 2016, there were four meetings that week. In 2017, on a trial basis, management ran just two meetings and, as it was a trial, management paid the additional bonus as usual, in 2018 and 2019 there were 3 meetings in each year and the bonus was paid. The bonus was justified by the additional revenue in a busy period and extra events, including a donkey derby, which enable payment of a discretionary bonus. In 2020, revenues were affected considerably by the pandemic and racing was suspended entirely for 12 weeks. While there were short-term lay-offs for pert-time staff, full time staff were maintained in employment and the Respondent availed of Government supports with the aim of maintaining employees’ net weekly wages. Racing resumed in June 2020, behind closed doors and then in July with significantly reduced capacity and associated income. Hospitality operations were again suspended in mid-August. There were only two race meetings in Galway Race week, so no additional hours were worked nor were there additional attendees. For these reasons, staff were informed that the Respondent’s aim was to maintain employee’s average pay and that this would be the same in Galway Race week. There was no additional work that week. There were no additional meetings. Revenue was reduced greatly, if not eliminated. Therefore, the concept of ‘force majeure’ applies. The concept of a pandemic was not foreseen and was not provided for in the Complainant’s contract. A claim was made that Tote staff received the normal premium payment. It has been clarified that this was paid in error. All wages due to the Complainant have been paid. He was paid his normal pay for hours worked. There is no contractual clause which supports this claim. The Complainant’ s contract provides for a discretionary bonus scheme. The use of the word ‘discretionary’ confirms the right of management to vary a payment as it sees fit. The wages received by the Complainant are those ‘properly payable’ to him within the meaning of s.5(6) of the Act. No additional payments were made in 2021. The additional payment sought is for work that was not done. The claim is misguided. The applicable law Payment of Wages Act, 1991. 1. “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, 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. 6) Where— (a) the total amount of any wages that are paid on any occasion by an employer to an employee is less than the total amount of wages that is properly payable by him to the employee on that occasion (after making any deductions therefrom that fall to be made and are in accordance with this Act), or (b) none of the wages that are properly payable to an employee by an employer on any occasion (after making any such deductions as aforesaid) are paid to the employee, then, except in so far as the deficiency or non-payment is attributable to an error of computation, the amount of the deficiency or non-payment shall be treated as a deduction made by the employer from the wages of the employee on the occasion Deliberation It is common case between the parties that the double time paid for work during Galway Race week is not an overtime payment related to additional working hours but, rather, an additional amount paid to employees. The reason for the payment is not set out clearly anywhere. It is the contention of the Respondent that the unique circumstances of Galway Race week, the additional activity, the additional revenue etc. usually warrant additional payments to employees, by way of discretionary bonuses of double time and that, in the unique circumstances of the pandemic, the usual additional activities and additional revenues did not arise, leading to the use of the discretion specified in the Complainant’s contract not to pay the bonus. The Complainant contends that, as the payment was always made, and as no qualifying terms were ever set out for the payment, custom and practice has established that the payment is a contractual entitlement and, therefore, double time is ‘properly payable’ for Galway Race week, in accordance with the Act. The Court, therefore, has to give consideration to what is ‘properly payable’. A term can be implied in any contract, including a contract of employment, by application of the so called officious bystander test enunciated inShirlaw v Southern Foundaries Ltd[1939] 2 K.B. 206. Here the test was set out in the following terms: - “Prima facie that which in any contract is left to be implied and need not be expressed is something so obvious that it goes without saying that if, while the parties were making the bargain, an officious bystander were to suggest some express provision for it in the agreement they would testily suppress him with a comment ‘Oh of course’.” A term can also be implied by application of the alternative and somewhat overlapping,‘custom and practice’test adopted by Maguire P inO'Reilly v Irish Press [1937] 71 I.L.T.R 194. Here it was held that the practice must be: - “…so notorious, well-known and acquiesced in that in the absence of agreement in writing it is to be taken as one of the terms of the contract between the parties…it is necessary in order to establish a custom of the kind claimed that it be shown that it was so generally known that anyone concerned should have known of it or easily become aware of it.” The test for establishing custom and practice was explained further inDP Refinery (Westernport) Pty Ltd v Shire Hastings[1978] 52 AJLR 43 in which it was held that terms may be implied into a contract by custom and practice. For this to happen, terms must be equitable, necessary, clear and obvious and must not contradict the express terms of the contract. It is clear, therefore, that custom and practice can result in contractual obligations. It is the Complainant’s contention that payment of double time meets the tests. The Court is of the view that for the Respondent to establish that the payment of double time is not a custom and practice but, rather, a discretionary bonus payment, some clear indication that would indicate that such payments are not automatic and are subject to qualifying conditions would need to be established. The absence of any such clarity is fatal to the Respondent’s case. No evidence exists that the payment was covered by the provision in the Complainant’s contract for discretionary bonuses to be paid. Indeed, apart from assertion by the Respondent, the basis for the payment is impossible to clarify. It is not disputed that the money has always been paid for that week and it is accepted that even when reduced race meetings were organised in 2017, the amounts concerned were paid. In those circumstances, it seems to the Court that the Complainant was entitled, by reference to the strict application of the Act, to expect that if he worked during Galway Race week, he would be paid what even the Respondent referred to in their submission as the ‘normal premium payment’. The Court acknowledges that circumstances in 2020 were different for the Respondent and notes that they would have been well within their rights to seek agreement to the waiving of the ‘normal premium payment’ for that week before deciding whether or not to proceed to hold race meetings. It is, perhaps, unfortunate for them in arguing this case before the Court that they did not do so. It is to the Respondent’s enormous credit that they sought throughout the pandemic to keep employees in work and in receipt of their wages and some frustration on their part at the circumstances of this case is to be expected. However, it can hardly be disputed that a payment made every year, including in years where race meetings in the particular week were reduced in number, amounts to a custom and practice, unless it can be shown by some other contractual provision to be otherwise and, as a consequence, a contractual commitment was established, so that the payments concerned became ‘properly payable’ within the meaning of the Act. Accordingly, the Complainant’s appeal must succeed and the Respondent is obliged to pay to him the relevant amount equal to the difference between the wages received by him and double time for the hours that he worked in the week in question. Determination The Decision of the Adjudication Officer is over-turned.
NOTE Enquiries concerning this Determination should be addressed to Orla Collender, Court Secretary. |
