Complainant

Respondent

Parties

David  Shanahan

County Tipperary Chamber of Commerce

Representatives

Mr. Thomas O’Donnell BL, instructed by Cleary & Co Solicitors

Mr. Tom Ryan,  Peninsula Business Services (Ireland) Limited

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-00039671-001

08/09/2020

Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991

CA-00039671-002

08/09/2020

The Complainant commenced employment with the Respondent on 23rd March 2017. At all times the Complainant role was described as “Chief Executive Officer”. For the cognisable period for the purposes of this complaint the Complainant was a permanent employee, in receipt of an annual salary of €35,000.  

On 8th September 2020, the Complainant lodged the present complaints with the Commission. Herein he alleged that the Respondent had made an illegal deduction from his salary by refusing to pay his salary whilst he was on a period of paid suspension. In denying this allegation, the Respondent submitted that the Complainant was placed on lay-off at the relevant time and consequently the wages were not properly payable for the purposes of the present Act.

A hearing in relation to this matter was convened and finalised on 12th November 2021. This hearing was conducted by way of remote hearing pursuant to the Civil Law and Criminal Law (Miscellaneous Provisions) Act 2020 and SI 359/20206, which designates the WRC as a body empowered to hold remote hearings. No technical issues were experienced during the hearing. Both the Respondent and the Complainant lodged extensive submissions in advance of the hearing, and expanded upon the same in the course of the hearing. No preliminary issues as to my jurisdiction to hearing the complaints were raised at any stage of the proceedings.

The Complainant was employed as the CEO of the Respondent organisation. On 25th September 2019 the Complainant commenced a period of paid suspension pending the completion of a investigatory process. On 20th March 2020, the Respondent issued correspondence informing the Complainant that he was to be placed on lay-off from 23rd March 2020. By response, the Complainant took issue with the lay-off situation, as he understood that he was on paid suspension pending the completion of and investigatory process. The Complainant’s salary was withheld on this basis until the end of his employment on 18th September 2021.

In summary, the Complainant submitted that the Respondent paid the Complainant his full salary while suspended between 25th September 2019 to March 2020. The Respondent ceased the Complainant’s suspension pay from 23rd March 2020 and wrongfully sought to convert a “holding suspension” to “temporary lay-off” to capitalise on the Covid-19 pandemic. As a consequence of the same, the Complainant submitted that he suffered an illegal deduction from his wages to the value of €12,854.80.

At the outset, the Respondent denied the Complainant’s allegation regarding the illegal deduction from his wages. They accepted that the Complainant was placed on paid suspension on 20th March 2020, and that he had a contractual right to his full salary from that date. Notwithstanding the same, the Respondent submitted that as a result of the restrictions arising from the Covid-19 pandemic, they were forced to place the entirety of their staff on lay-off. They submitted that as such lay-off was unpaid, the Complainant wages were not “properly payable” for the purpose of the Act for the duration of the same.

In evidence, a board member of the Respondent stated that during the period of the initial restrictions arising from the Covid-19 pandemic, the Respondent’s activities effectively reduced to zero. She stated that any matters that arose were dealt with by the board on an ad hoc basis. She further stated that all staff members were placed on unpaid lay-off at this time. In answer to a question, the Board member stated that a new CEO was appointed following the ending of the Complainant’s employment. She stated that this employee availed of the wage subsidy scheme during their employment.

Section 1 of the Payment of Wages Act 1991, defines “wages” as “any sums payable to the employee by the employer in connection with his employment, including…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”.

Section 5(6)provides that 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.”

In the matter of Marek Balans v Tesco Ireland Ltd [2019 No. 83 MCA], McGrath J. stated that when considering complaints under the present Act,

“Central to the Court’s analysis must be the concepts of wages properly payable and the circumstances in which if there is a deficiency in respect of those such payments”.

Section 5 of the Act prohibits any deductions from wages deemed properly payable, unless certain prescribed criteria are met. It is noted that the case advance by the Complainant is that he was not paid his contractual salary during a period of paid suspension. In denying the complaint, the Respondent submitted that as the wages were not properly payable for the purposes of the present Act, the complaint must fail. As a consequence of the same, the steps set out in Section 5 as regards legal deductions are irrelevant for the purposes of this complaint.

In the present case, the Complaint was placed on a period of paid suspension pending the completion of an internal investigation. It is common case that the Complainant was entitled to his contractual pay as a result of the same. Matters become more complicated when in March 2020, the Complainant, like many employees throughout the state, was placed on a period of unpaid lay-off as a result of the restrictions arising from the Covid-19 pandemic. At this point, the Respondent submits that the Complainant was not entitled to his salary, as he would have not received the same in the normal course of his employment.

Regarding suspension, in the matter of The Governor and Company of the Bank of Ireland -v- James Reilly [2015] IEHC241, Noonan J. stated that,

“In general…it ought to be seen as a measure designed to facilitate the proper conduct of the investigation and any consequent disciplinary process.”

In this regard, I further note that the Respondent’s disciplinary procedure states that, “you will be paid pending (disciplinary) investigation”. Having regard to the foregoing, it is clear that once the Respondent has commenced a disciplinary investigation, the Complaint has a contractual entitlement to receive his full salary until such a time as the investigation is finalised and he returns to work or further engages with the disciplinary procedure. 

The Respondent has submitted that as the Complainant was on a period of unpaid lay-off from 20th March 2020 and consequently was not entitled to receive his salary whilst on suspension. In this regard I note that Section 11(1) of the Redundancy Payments Act provides that lay-off exists where,

“…an employee's employment ceases by reason of his employer's being unable to provide the work for which the employee was employed to do.”

A number of points arise in relation to this contention. Firstly, I note that the Respondent’s disciplinary procedure is silent as regards the discontinuance of paid suspension on foot of the Complainant being placed on a period of lay-off. In circumstances whereby the Complainant’s entitlement to payment whilst on suspension emanates from this policy, the Respondent has not set out any contractual basis by which such payment could be discontinued in this manner. Secondly, the purpose of the suspension i.e. the investigation, was not discontinued during the period of lay-off. No evidence was presented that the investigation itself could not proceed at this time. Finally, it is not at all clear that the Respondent was unable to “provide the work for which the employee was paid to do” at this time. The Complainant was engaged as the CEO of the Respondent organisation at the time of his suspension.  As such his work included the effective and efficient management of the Respondent’s affairs, including the management of the consequences of the restrictions on the business and the creation of a plan to assist the Respondent’s members, and the Respondent itself, recover from the same. I further note that the Complainant could have potentially availed of the government subsidy’s to maintain his employment, as apparently his successor did. While these points are somewhat moot given that the Complainant was on a period of paid suspension at the relevant time, in light of the same the Respondent cannot reasonably maintain that they were unable to provide any work for the Complainant in March 2020.

Having regard to the foregoing points, I find that the Complainant’s wages were “properly payable” for the purposes of Section 1 of the Act. In light of the provision set out in Section 5(6), I find that the withholding of the Complainant’s wages for the period 23rd March to 18th September 2020 constitutes an illegal deduction for the purpose of the present Act and consequently his complaint is well-founded.

CA-00039671-001

I find that the complaint is well-founded and consequently the Complainant’s application succeeds.

Regarding redress, Section 6(2) of the Act (as amended) empowers me to award such redress as deemed reasonable in the circumstances, so long as the same does not exceed the total amount of wages owed.

In light of the foregoing, I order the Respondent to pay the Complainant the sum of €12,854.80, the amount of the deduction from his wages. This payment should be subject to all normal deductions as income.

CA-00039671-002

This complaint is a duplicate of the preceding complaint and was not pursued at the hearing. Having regard to the same, I find that this particular complaint is not well-founded.

Paid Suspension, Lay-off