Complainant

Respondent

Parties

Dragos Tone

Gary Keville Traffic Management Limited

Representatives

Marius Marosan

Self-represented

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-00039874-001

16/09/2020

Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997

CA-00039874-002

16/09/2020

Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997

CA-00039874-003

16/09/2020

The complainant worked for the respondent from the 23rd July to the 19th August 2020. The pay due to the complainant for the last two weeks was not paid. The complainant asserts that this was an unlawful deduction, while the respondent asserts that it was entitled to deduct this money to cover training and equipment expenses it incurred. There are also complaints regarding annual leave and public holiday pay.

In the complaint form, the complainant outlined that he is owed €1,184.99 in unpaid wages and €215.54 in unpaid holiday pay. These are claims pursuant to the Payment of Wages Act. The complaint via the Organisation of Working Time Act is for unpaid cesser annual leave pay as well as for two hours’ pay for the August 2020 public holiday. He states in the complaint form that he had worked 45 hours the previous week, so ought to have been paid for nine hours on the public holiday and not the seven hours he was paid.

In submissions, the complainant outlined that the respondent was not entitled to make the deductions as the goods and services provided were ‘necessary to the employment’. It was submitted that section 5(2)(b) prohibited deductions where the goods and services were necessary to the employment. He further outlined that the training was never completed and was given by another employee of the company. The complainant relied on CJEU case law and Labour Court authorities regarding paid annual leave being a fundamental social right. The complainant relied on Von Colson principles in respect of public holiday pay due. The complainant submitted that he did not work a standard 7-hour shift as claimed by the respondent. The complainant stated that he was entitled to 1/5 of the 42 hours he worked the previous week, as provided by Regulation 5(2)(a) of the Organisation of Working Time (Determination of Pay for Holidays) Regulations 1997.

The complainant said that his employment started on the 23rd July 2020, and he resigned on the 19th August 2020. He outlined that there were payments not paid to him which are stated as paid on the payslips.

The complainant outlined that the respondent was not entitled to rely on the deduction provision in the contract of employment to justify the deductions made for training costs. The complainant submitted that the training he received was from an employee of the respondent and, therefore, of no cost to the respondent. The training was also ‘necessary for the employment’ so could not be the basis of a deduction.

The complainant sought compensation for the unclaimed annual leave and the public holiday pay not paid.

The complainant referred to the payslips for weeks 34 and 35 and stated that he received no monies whatsoever for these weeks. His bank account statement showed that the 14th August was the last day he was paid, and he had not received a payment since then. He outlined that the respondent acknowledged that these monies were not paid. He said that the payslip was also there for the State to see what monies were paid.

The complainant said that the first and the fifth weeks were half weeks and he worked for three whole weeks. He said that they did the training in a classroom and then went to work in the yard for several hours.

The complainant outlined that in the week of the 27th July 2020, he worked 22 hours with 3.75 hours of overtime. In the week of the 2nd August 2020, he worked 42.75 hours with 1.5 hours of overtime. In the week of the 9th August 2020, the complainant worked 34.25 hours with 7.25 hours of overtime. In the week of the 16th August 2020, the complainant worked 45 hours with 8.25 hours of overtime. In the week of the 23rd August 2020, the complainant worked 24 hours with 2.75 hours of overtime. The complainant outlined that he participated in the Safepass course on the 29th July, and this was to the cost of €150.

In submissions, the respondent outlined that the complainant resigned without giving the required week of notice. It stated that it calculated public holiday pay according to the complainant’s contracted hours. The respondent submitted a spreadsheet stating that €745.88 was paid in week 33 and €729.63 in week 34. The relevant payslips refer to €596.68 and €588.31 as the net figures. The spreadsheet sets out the PPE cost of €200, the training cost of €850 and the Safe Pass cost of €150. The spreadsheet is attached to the email of the 24th August 2020. The payslip for week 32 states that €580.13 was due in gross pay. Other pay slips show that €546 was paid the previous week and €359.13 for the complainant’s first week of employment.

The respondent exhibited the contract of employment. The contract provides that the employee is employed on a flexi-time basis with no obligation to provide a minimum set of hours. It provides that the employee has a guaranteed minimum of seven hours per day worked. Hours worked above 42 hours in a week go to a Flexi-Time Account to cover weeks where the employee works less than 42 hours.

The contract provides that the hourly rate of pay is €13. There is provision for overnight overtime of 10% and a night allowance of €20. The contract provides for 21 days of annual leave per annum. It provides that the employee should be contactable from 6am to 8pm, Monday to Saturday. Clause 16 provides that the employee must refund full training costs if they leave within 6 months. It refers to training via three training providers, based in Ireland and the UK. Clause 18 refers to the employee paying €200 for replacement PPE if they terminate their employment within six months of its commencement. The contract is signed by the parties on the 22nd July 2020.

In the email of the 3rd September 2020, the respondent office administrator states that it was entitled to make deductions of €1,200 to the pay due to the complainant. It stated that the €596.68 and €588.31 was due to the complainant and was deducted to cover the money owed to the respondent. A further email refers to certificates for the theory component of two professional training courses. 

The respondent outlined that section 5.6 of the contract of the 22nd July 2020 referred to the working week as being six days with seven hours’ work per day. On the 24th August 2020, the complainant was emailed a breakdown of the annual leave due, the hours he had worked, and the deductions made. The respondent submitted that the pay slip cannot accommodate the listing of deductions, so did not do so.

The respondent outlined that section 4 of the contract provided that deductions could be required by a term of the contract. This was addressed at point 16 of the contract and point 18 also allowed a deduction of €200 for PPE.

In respect of annual leave, the respondent outlined that annual leave was calculated by using the gross wage figure. It applied section 21 of the Organisation of Working Time Act so that one day of annual leave was one normal day’s pay, but this was not a fifth of the week as there was a six-day week

The respondent outlined that the training session was Safepass and the second consisted of two courses in traffic management. The complainant completed the first half of both courses. The respondent stated that this training was only provided by two people in the country. It costed the course at €850 and deliver it to new employees. There are the costs of materials as well as the salary cost of the employee. The complainant had completed four days of training and the charge was for these four dates.

The respondent outlined that the deduction did not need to be stated on a pay slip and they were notified on the 24th August a day after the pay period and a week before it was due to be paid. It outlined that the traffic management training took place on 10th and 11th August as well as the 17th and 18th August. This was classroom training.

The complainant’s employment began on the 23rd July 2020 and his last day of employment was the 19th August 2020. The reasons for the complainant’s resignation are not agreed by the parties, but the circumstances of the employment’s ending are not part of these complaints. What is part of the complaints are the deductions made to the complainant’s pay.

The complainant asserts that the deductions were unlawful and amount to contraventions of the Payment of Wages Act. There are two claims pursuant to the Organisation of Working Time Act. The respondent asserts that the contract of employment enabled it to make the deductions in circumstances where the complainant ended his employment within the first six months of his employment and that it had correctly calculated the complainant’s leave entitlements.

CA-00039874-001

This is a complaint pursuant to the Payment of Wages Act. It relates to the deductions made to the complainant’s pay of €1,184.99 (i.e. the sum of €596.68 and €588.31, the two net amounts stated in two payslips).

I would question the use of net pay rather than gross pay to make any deduction. I would also question whether holiday pay can be included in the ‘pot’ from which any deduction is made, in particular the statutory entitlement of annual leave (four weeks), which is, after all, a fundamental social right arising from the Directive. These questions only come into play if the deductions complied with section 5 of the Payment of Wages Act.

Section 5 of the Payment of Wages Act

The issue is whether the respondent complied with the requirements set out in section 5 of the Payment of Wages Act. Section 5 is an intricate, lengthy provision, consisting of some 1,348 words. The section is unwieldy to reproduce in full into a decision and this would not aid the reader in understanding the law.

It is clear that the respondent is relying on section 5(1)(b) to justify the deduction: ‘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.’  

Section 5(2) distinguishes between ‘acts or omissions’ of an employee and ‘goods and services supplied to or provided for’ the employee. I find that the provision of training and PPE equipment to the complainant fall within the latter category, i.e. ‘goods and services supplied to or provided for’ the complainant.

I do not agree with the complainant submission that any good or service necessary to an employment cannot be the subject of a lawful deduction as section 5(2) continues with ‘unless’ and lists the subsections outlined below.

Section 5(2) provides the following two requirements in respect of a deduction made for ‘goods and services supplied to or provided for’ an employee.

Section 5(2)(i) provides ‘the deduction is required or authorised to be made by virtue of a term (whether express or implied and, if express, whether oral or in writing) of the contract of employment made between the employer and the employee.’

Section 5(2)(ii) provides ‘the deduction is of an amount that is fair and reasonable having regard to all the circumstances (including the amount of the wages of the employee)’.

In respect of deductions made for ‘goods and services supplied to or provided for’ an employee, section 5(2)(iii) provides: ‘before the time of the act or omission or the provision of the goods or services, the employee has been furnished with (I) in case the term referred to in subparagraph (i) is in writing, a copy thereof, (II) in any other case, notice in writing of the existence and effect of the term.’ Note, the notification requirement in 5(2)(iv) only applies to deductions arising from an act or omission, and not to deductions made in respect of goods or services.

Per section 5(2)(vi), any deduction for goods and services provided cannot exceed the cost to the employer of the goods or services.

Section 5(2)(vii) sets out a limitation period for an employer to make a deduction for the cost of goods and services provided to an employee. It states that a deduction must start to be made within six months of the goods and services being provided to the employee (and also within six months of any act or omission becoming known to the employer).

Application of section 5 to this case

I have already found that the deduction related to goods and services provided to and for the complainant. I find that the wages to be paid for weeks 34 and 35 were properly payable as the complainant worked the hours as stated. The question is whether the deductions were lawful.

This case related to a very short employment and the deduction made for the training and equipment was clearly made within six months of the training occurring and the equipment being provided. I find that the respondent complied with sections 5(2)(i) and (iii) as the deduction was based on a contractual term. As this related to goods and services, notification of the actual amount of the deduction is not required per section 5(2)(iv).

This case comes down to the interpretation of section 5(2)(ii) whether the deduction is of an amount that is fair and reasonable having regard to all the circumstances (including the amount of the wages of the employee).’This is an assessment of the circumstances around the deduction itself and requires analysis of the amount of the deduction as proportion of the wages due.

I appreciate that the respondent incurred financial cost in providing training to the complainant who resigned shortly afterwards. I note, however, that there were other participants in the LASNTG training. It is difficult to see circumstances where it is ‘fair and reasonable’ for an employer to deduct 100% of an employee’s wages to cover goods and services. This leaves the employee without any income at all.

It is also relevant that the complainant’s rate of pay was €13 per hour. What is ‘fair and reasonable’ must be assessed against the complainant being on a relatively low wage. In assessing ‘all the circumstances’, I note that the respondent obtained real-time benefit from its investment in the complainant, i.e. the skills he acquired through training were immediately put to use in working for the respondent. Ditto for the PPE equipment.

It follows that it was not fair or reasonable for the respondent to deduct the entirety of two weeks’ pay from the complainant. The deduction was, therefore, not permitted by section 5 of the Payment of Wages Act.

Redress

As the deduction was not permitted by section 5 of the Payment of Wages Act, the complaint is deemed to be well-founded. Section 6 provides that where a complaint is deemed to be well-founded, the adjudication officer can award ‘compensation’ that they consider to be ‘reasonable in the circumstances’.

I find that it is reasonable in the circumstances to award all the net pay deducted by the respondent. This is the amount of €1,184.99. It is reasonable to award this as it was not fair or reasonable for the respondent, irrespective of the employment ending so soon, to deduct 100% of an employee’s wages to cover the training costs and equipment, leaving the complainant without pay and to pursue this case via the Workplace Relations Commission.

CA-00039874-002

This is a complaint pursuant to the Organisation of Working Time Act. The respondent did not pay the complainant the holiday pay due because of the training and equipment costs, a deduction I have found to be an unlawful deduction. The complainant has been awarded holiday pay in the decision in the Payment of Wages complaint. There was also a breach of the Organisation of Working Time Act and I make an award of €100. Not paying annual leave amounts to a breach, and while the actual holiday pay is addressed above, there is also the breach of a statutory right. The award of €100 is not remuneration or arrears of remuneration and is redress for a breach of a statutory right.

CA-00039874-003

This is a complaint pursuant to the Organisation of Working Time Act in relation to public holiday pay. It relates to the pay entitlement for the August 2020 public holiday where the complainant was paid for seven hours, when he says that he was entitled to additional pay. The respondent outlined that the standard day was seven hours, and this is what was paid for the public holiday.

I find as fact that the complainant worked 42 hours in the relevant week, i.e. in week 31. I note that the complainant referred to working 45 hours (the email of the 20th August 2020) but I note that the pay slip refers to 42 hours, as the complainant also did in his submissions.

The amount of pay due for the public holiday should be determined according to the Organisation of Working Time (Determination of Pay for Holidays) Regulations 1997. I agree that Regulation 3(2) and 5(2)(a) of the Regulations apply, so that the amount due is 1/5 of the pay paid the preceding week. The complainant was paid €546 in the preceding week, when he worked 42 hours. 1/5 of €546 is €109.20. The complainant was paid €91 for the public holiday, and he is therefore due the difference, i.e. €18.20.

Public holidays are provided for in sections 21 and 22 of the Organisation of Working Time Act. This is a domestic provision and does not transpose EU law; there is no mention of public holidays in the Directive. Von Colson principles, therefore, do not apply.

There has, however, been a breach of the statute and I make an award of €25, encompassing the shortfall in pay.

CA-00039874-001

I decide that the complaint pursuant to the Payment of Wages Act is well-founded and the respondent shall pay to the complainant compensation of €1,184.99.

CA-00039874-002

I decide that the complaint pursuant to the Organisation of Working Time Act is well-founded and the respondent shall pay to the complainant €100. This is not remuneration or arrears of remuneration and is redress for a breach of a statutory right.

CA-00039874-003

I decide that the complaint pursuant to the Organisation of Working Time Act is well-founded and the respondent shall pay to the complainant €25.

Payment of Wages Act / goods and services / fair and reasonable

Organisation of Working Time Act / annual leave / public holiday