FULL RECOMMENDATION
PARTIES : SEAHORSE UNLIMITED COMPANY DIVISION :
SUBJECT: 1.Appeal of Adjudication Officer Decision No. ADJ-0003050151, CA-00040391-001 BACKGROUND: 2.This is an appeal of an Adjudication Officer’s Decision made pursuant to Section 7(1) of the Payment of Wages Act, 1991. The appeal was heard by the Labour Court on 13 January 2022 in accordance with Section 44 of the Workplace Relations Act, 2015. The following is the Court's Determination:- DETERMINATION: This is an appeal by Mr John Joe O’Driscoll against an Adjudication Officer’s Decision ADJ-00030151, dated 16 August 2021, given under the Payment of Wages Act 1991 (the Act) against his former employer Seahorse – Irish Mainport Holdings. The Adjudication Officer held that Mr O’Driscoll’s claim was not well founded. Mr O’Driscoll lodged an appeal to the Labour Court on 22 July 2021. A remote hearing of the Labour Court was held on 13 January 2022. In this Determination the parties are referred to as they were at first instance. Hence, Seahorse - Irish Mainport Holdings is referred to as the Respondent and Mr John Joe O’Driscoll as the Complainant. Background The Complainant commenced employment as an able seaman with the Respondent in November 2011. His position was made redundant in 2021 following the decommissioning of the Kinsale Gas fields. Complainant’s Submission The Complainant worked a roster of 28 days at sea on duty and 28 days off when he was on shore leave. His rate of pay was €3,581 per month, paid in 13 equal instalments per annum, as per the terms of a 2016 Collective Bargaining Agreement. The Complainant was absent on certified sick leave from 28 May 2020 to 25 June 2020 and was paid the agreed sick pay terms of 47% of full salary. This period coincided with the 28-day period that he was rostered to be at sea on duty. The Complainant was certified fit to return to work on 2 July 2020 when his period of shore leave was commencing. He continued to be paid the sick pay scheme rate for the month of July 2020, i.e. 47% of full salary. SIPTU submits that the Respondent made an unlawful deduction from the Complainant’s salary, when it continued to pay the Complainant the sick pay rate after he was confirmed fit to return to work in July 2020, resulting in a shortfall in pay of €1,831.82. SIPTU submits that the Respondent incorrectly asserts that there is a requirement to physically work 28 days prior to shore leave in order to receive full payment during that leave. Such a requirement is not specified in the Collective Bargaining Agreement and the concept of working one month to accrue time for the next month was never discussed as part of that agreement. The company in its application of the Agreement is seeking to penalise workers by paying a worker at a sick pay rate when they are certified fit. The Complainant can cite examples that predate the 2016 Collective Bargaining Agreement where full pay was applied during a period of shore leave that followed a period of sick leave. In 2018 the Complainant himself received full pay when certified fit to return to work during his shore leave. SIPTU further submits there is no requirement to be assessed by a company GP before being declared fit to return to work and that to continue to pay sick pay after an employee is certified fit is contrary to the Collective Bargaining Agreement. Respondent’s Submission Ibec, on behalf of the Respondent, submits that no unlawful deduction of wages occurred in July 2020. The Respondent contends that the wages “properly payable” to the Complainant were the wages advised to him in his contract of employment and the company collective agreement. The Respondent applied the terms of the collective agreement and sick pay scheme correctly. Any deductions made to the Complainant’s salary were made in accordance with Section 5 of the Act, namely deductions required by virtue of statute, and so were lawful deductions. The Respondent submits that the Complainant is seeking full pay for 28 days in circumstances where he was not available or ready for sea and where he had not worked the 28 days prior to submitting a fitness to return to work certificate. As he had not worked the required 28 days prior to returning to work, no entitlement to full pay arises. The Complainant was a shop steward for three years, so was fully aware of how the company sick pay arrangements operated and that payment was based on time served at sea. Time must be built up to ensure payment when on shore leave. Furthermore, the Respondent has an established custom and practice that each returnee who submits a return-to-work certificate is assessed by the company GP and then declared medically fit to operate at sea. The Applicable Law The Act at Section 5(6) provides as follows: 5(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. Subsection (6)(a) of section 5 of the Act provides, in effect, that where the total amount of wages properly payable to an employee is not paid, the deficiency or non-payment is to be regarded as a deduction. Consequently, the Court must turn to a consideration of the amount that was properly payable to the Complainant in July 2020, when after he was certified fit to return to work. Amount Proper Payable The basic facts of this case are not in dispute. The Complainant’s contract of employment provides for a working pattern rotation of 28 days on and 28 days off, in return for which the worker receives an annual salary paid in 13 instalments per annum. The Complainant was certified fit to return to work by his own GP on 2 July 2020, when he was normally rostered to be on shore leave. The Respondent contends that as he had not physically returned to work he continued to be paid at the sick pay rate of 47% of his salary. His payslip for July 2020 records that he was paid the sick pay rate of pay for that period. The matter for the Court to decide is whether the wages that were paid to the Complainant in July 2020, after he was certified fit to return to work, but had yet to physically return to his work, was less than the wages that properly payable to him for that period. The starting point for assessing what is properly payable is the contract of employment. The Court was provided with a copy of the Complainant’s contract of employment, effective from 10 May 2017 and signed by both parties. The relevant clauses are as follows: Clause 3 specifies that, inter alia, ‘The Tour of duty will be 28 days on 28 days off’. Clause 5 provides that the Complainant’s rate of pay in 2017 on commencement was €41,739.72 per annum. It goes on to state that frequency of payment will be ‘Every 4 weeks on Crew Change Day (13 Equal Payments per year)…by electronic transfer to your nominated bank account’. Clause 10 provides details relating to sick leave as follows:- “In the event that the seafarer is unable to join on your regular tour of duty due to sickness they should contact the office at the earliest opportunity in advance of their joining date. On the initial day of illness a certificate from a qualified medical practitioner must be submitted to the Mainport Office. Further medical certificates should be submitted in accordance with the Collective Bargaining Agreement. Company Sick Pay will be paid in accordance with the Collective Bargaining Agreement’. Clause 12 refers to the ‘Applicable Collective Bargaining Agreement’ which states:- “The seafarer’s employment will also be subject to the Collective Bargaining Agreement(s) entered into on 3rdAugust 2016 between the ship owner and SIPTU, except where any provision(s) of such Collective Bargaining Agreement(s) conflict with national law. Such provision(s) shall not apply to your employment under this agreement.” The Complainant’s contract of employment is subject to the terms of the 2016 Collective Bargaining Agreement The relevant clauses of the 2016 Collective Bargaining Agreement states: Clause 6 of the 2016 Collective Bargaining Agreement relates to Hours of Work. Clause 6.1 specifies thatthe normal tour of duty is 28 days on followed by 28 days off. Clause 7 of the 2016 Collective Bargaining Agreement sets out terms relating to ‘Rates of pay, Public Holidays and Annual Leave’. Clause 7.2 states that ‘Equal payments will be made by electronic transfer to each individual’s bank account every 28 days to coincide with crew change, there may be some variation due to public holidays (see 7.5 below) and/or additional requirements as set out in clause 6.2’. Clause 10 sets out provisions relating to ‘Absence Management, Company Sick pay and Mortality Benefit’. Clause 10.1 relates to absence and states that ‘The Employee should contact the Company at the earliest opportunity to advise if they are not able to join the vessel; as planned, in order that crew relief can be arranged in time for crew change’. Clause 10.2 addresses the sick pay terms and states: ‘Company sick pay will be paid in accordance with the below schedule on production of a weekly medical certificate for short term sickness (period 4 weeks), and monthly medical certificates for longer term sickness (period over 4 weeks), endorsed where necessary by a doctor appointed by the Company. Length of employment Entitlement 12 months and over 47% of Employee’s salary for up to 8 weeks per annum 24 months and over 47% of Employee’s salary for up to 16 weeks per annum 36 months and over 47% of Employee’s salary for up to 24 weeks per annum To ground a claim under the Act of 1991, the wages concerned must be properly payable. The role of the Court is to determine the sum that was properly payable to the Complainant during July 2020 by applying the law to facts before it. As the Complainant was certified sick on 1 July 2020, it follows that, in line with Clause 10 of his contract of employment and Clause 10.2 of the 2016 Collective Bargaining Agreement, he was entitled to be paid as per the terms of the sick pay scheme for that date. As a result, the Court finds that the amount that was properly payable for 1July 2020 was the sick pay rate of 47% of his normal rate of pay for that day. The amount that was properly payable for the remainder of July, when certified by his GP as fit to return to work, requires an enquiry into and analysis of the facts. While the Respondent submitted to the Court that there was an established custom and practice for employees returning to work after sick leave to be assessed by the company GP, it is accepted that this did not happen in the Complainant’s case. In any event, the Respondent does not assert that a lack of certification by the company GP was the reason for retaining the Complainant on sick pay terms. As a matter of fact, the Court finds that the Complainant was certified fit to work from 02 July 2020. As the Complainant was fit for work from 2 July 2020, it would appear on the face of it and having regard to his contract of employment, that the amount properly payable to him was his normal salary for the period from 2 July 2020 to the end of that month. However, the Respondent asserts that the sick pay rate of pay, i.e. 47% of salary, is the amount that was properly payable, as the Complainant did not physically work a 28-day rotation on duty immediately prior to his intended shore leave that July. Although the Respondent relies on the Contract of Employment and the 2016 Collective Bargaining Agreement to support this position, in response to questions from the Court, it accepted that no express term addressing a requirement to physically work 28 days before a period of shore leave in order to accrue payment for that leave is contained within either document. It clarified to the Court that it relies solely on custom and practice and referred to examples where employees rostered on duty but absent for other reasons such as compassionate leave, or where employees miss the boat and fail to report for duty, are paid the sick pay rate of 47% of salary. The Respondent contends that the practice of paying a worker the sick pay rate until they physically return to the rig arises as there is no regular boat service back and forth to the rig, which only departs once a month to deliver and collect crew. SIPTU, on behalf of the Complainant, submits that a requirement to work physically 28 days prior to leave in order to receive full payment during shore leave never formed part of discussions and is not specified in the Collective Bargaining Agreement. They are not aware of such a custom and practice in the company. In any event, SIPTU asserts that the Complainant was scheduled to be on shore leave during the relevant period and so is entitled to full pay. There is some ambiguity around the status of the Complainant when he was certified fit to return to work on 2 July 2020. SIPTU say that he was on scheduled shore leave and so was entitled to be paid in full for that leave. The Respondent did not dispute that the Complainant would normally be on shore leave in July and submitted that all employees are aware of their rosters 12-18 months in advance. However, it takes issue with the Complainant seeking full pay, in circumstances where he had not worked 28 days prior to submitting his return-to-work certificate. It contends that the Complainant declared himself fit to return to work on 2 July 2020 during his intended month off. It submits that he was due on duty on 3 July 2020, but only made himself available for work after the boat, which departs once a month, had left for the oil rig. It asserts that the Complainant is essentially manipulating the sick pay scheme. The Court reviewed the contract of employment and the 2016 Collective Bargaining Agreement, both which specify a working pattern rotation of 28 days and 28 days off, in return for which the worker is paid a salary in 13 instalments per annum. The Respondent accepts that neither document contains an express reference to a requirement to physically work one period of 28 days at sea in order to accrue enough pay to cover one period of shore leave. The Court also reviewed the sick pay provisions in the contract of employment and the 2016 Collective Bargaining Agreement. There is no provision expressly stating that a worker must physically report for duty after a period of sick leave and/or before commencing a period of shore leave. Both documents are silent on what payments apply once a worker is deemed fit to return to work from a period of sick leave and before they can physically return to work on the oil rig. In these circumstances, the Court finds that the Respondent cannot rely on the Complainant’s contract of employment or the 2016 Collective Bargaining Agreement to assert that the amount properly payable to the Complainant after he was certified fit to return to work was a sick pay rate of pay i.e. 47% of salary, as he did not physically work a 28-day rotation on duty immediately prior to his intended shore leave that July. The Respondent asserts that the requirement to physically work one period of 28 days at sea in order to accrue enough pay to cover one period of shore leave is implied into the Complainant’s contract of employment through custom and practice. In O'Reilly v Irish Press [1937] 71 I.L.T.R 194 Maguire P considered how a term can be implied into a contract of employment by custom and practice. In that case, the plaintiff argued that he had an entitlement to a 6-month notice period by virtue of custom and practice in the industry. In assessing if such an entitlement was implied into the plaintiff’s contract of employment through custom and practice, Maguire P said for this to happen it must be proved “by persons whose position in the world of journalism entitles them to speak with certainty and knowledge of its existence. I have to be satisfied that it is 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.” In the within case, the Court was faced with a direct conflict regarding the custom and practice that applies. No evidence was proffered to the Court to support the position that in practice where a worker who is fit to attend work on the oil rig, but is prevented from doing so, is paid the sick pay rate until they physically return to the rig. Furthermore, no evidence was proffered to demonstrate that in practice a worker is required to physically work a 28-day rotation in order to accrue sufficient pay to cover their period of shore leave. The Respondent has not established to the satisfaction of the Court that a requirement to physically work one period of 28 days at sea in order to accrue enough pay to cover one period of shore leave is implied into the Complainant’s contract of employment through custom and practice. In such circumstances, the Court finds that such a term cannot be implied into the complainant’s contract of employment. The matter for the Court to decide is what wages were properly payable under the Act to the Complainant in July 2020, after he was certified fit to return to work. In the Court’s view, the Respondent cannot rely on the Complainant’s contract of employment, the 2016 Collective Bargaining Agreement, or custom and practice to assert that the amount properly payable to the Complainant after he was certified fit to return to work was a sick pay rate of pay. On balance, based on the evidence presented, the Court finds that the Complainant was scheduled to be on shore leave in July and so was entitled to be paid his normal monthly salary after he was certified fit on 2 July 2020. The Court finds that the amount that was properly payable for 1July 2020 was as per the terms of the sick pay scheme, i.e., 47% of his normal salary payable for that day. The Court finds that the amount “properly payable” to the Complainant after 2 July 2020 was his normal monthly salary of €3,457.62, paid on a pro-rata basis to take account of his absence on 1 July 2020. Deduction Section 5(1) of the Act prohibits an employer from making deductions to an employee’s wages except in accordance with the provisions of that section. These include: (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. Where a deduction is made it is incumbent on the employer making the deduction to identify the statutory or contractual provision under which that deduction is authorised. While the Respondent submits that the deductions made to the Complainant’s salary were made in accordance with Section 5 of the Act, it was unable to point to a provision in the contract of employment, or in the Collective Bargaining Agreement implied into that contract, that authorises such a deduction. The Court is satisfied that the documents submitted to the Court and relied upon by the respondents do not provide authorisation for the deduction made. No evidence of an agreement providing such authorisation was proffered. In these circumstances, the Court is satisfied there was an unlawful deduction of the complainant’s wages in July 2020 that resulted in a shortfall in pay of €1,831.82. The Court finds that the complaint is well founded. The Court determines that the Complainant suffered a deduction from his wages during the cognisable period for the within complaint of €1,831.82 and that this deduction was unlawful. The Court directs the Respondent to pay the Complainant the sum of €1,831.82 by way of compensation. The decision of the Adjudication Officer is set aside. The Court so Determines.
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