Complainant

Respondent

Parties

Susan  Jordan

Permanent Tsb

Representatives

  Self

 Lynn Mullin, Senior ER Manager

Act

Complaint/Dispute Reference No.

Date of Receipt

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

CA-00046511-001

04/10/2021

The Complainant was employed as a Product Assurance Specialist with the respondent.  She commenced employment on 02/05/2006 and resigned on 30/07/2021.  At the time of her resignation the Complainant believes that she was due a pay increase of 1.7% as a result of her score in the Performance Related Pay (PRP) process. The Complainant submits that she met the criteria and was entitled to receive the payment which amount to €606.00.  The Respondent denies that it is in breach of the Payment of Wages Act, 1991 as the Complainant did not meet all the eligibility criteria for the payment. 

The Complainant commenced employment with the Respondent on 02/05/2006.  She worked in a variety of roles and was a Product Assurance Specialist at the time of her resignation, 30/07/2021.  The Complainant took part in the Performance Related Pay (PRP) process and as a result of this she was due a salary increase of 1.7% for 2021.  She submitted her resignation in May 2021 and left employment on 30/07/2021.  The Complainant submits that the increase was due to her for the period Jan – July 2021 and she did not receive this.  The Complainant believes that she met all the criteria for this increase which she outlined as follows:

1.       You remained in continuous employment with the Respondent on a permanent of temporary capacity since 01//09/2020.

2.       You have not received or tendered notice of termination of your contract of employment and this includes any colleagues who have accepted an offer of Voluntary Severance.

3.       You are on the payroll on 31/07/2021.

4.       You do not have a current active disciplinary written warning in place.

5.       You are in a Level 4 or a Level 5 position.

The Complainant gave evidence that she submitted her resignation notice to the Respondent in May 2021 and her last working day was 30/07/2021.  In that context she did not receive her payment.  The Complainant feels that this is not justified as she has received a salary from the Respondent from January 2021 which is 1.7% less than she was entitled to.  The Complainant is asking the Workplace Relations Commission to decide if it is fair or correct for the Respondent to refuse to pay her arrears of salary.

The Complainant also outlined that the criteria had changed from previous years and one of those changes was to the payment date.  In 2018 and 2019 the payment was made in March of those years and backdated to January.  It is the Complainant’s belief that because a large number of employees were leaving the company on a voluntary severance arrangement the Respondent changed the dates to ensure that these employees were not eligible. 

The Complainant confirmed at the hearing that she was aware that the PRP process was the subject of a “Collective Agreement” with the relevant trade unions and she also confirmed that she took part in the ballot in relation to the 2021 agreement. 

The Respondent is a retail bank which is 75% State owned.  It is classified as a major financial institution and is regulated by the Central Bank of Ireland and the European Central Bank.  It currently employs approximately 2,400 employees.  The Respondent confirms that the Complainant was a former employee who worked in various roles from 02/5/2006 until 30/07/2021.   The Respondent outlined to the hearing that they moved from an Incremental Pay increase model to a Performance Related Pay model following the outcome of a Labour Court hearing in 2017.  The new model, PRP, allowed the trade unions to submit pay claims each year with an element of Performance and General Cost increases and the Respondent would consider these from a business and affordability perspective.  In 2018, 2019 and 2020 the pay increased using this model and a pay matrix.  The negotiations would commence in the prior year and the implementation dates were as a result of a combination of ballot, referral to WRC and/or affordability reasons.  The discussions for 2021 began in September 2020 and the outcome of the ensuing ballot was 84% acceptance.

The Complainant submitted her resignation to the Respondent in May 2021 and left on 30/07/2021.  The complaint relates to the receipt of PRP for the period Jan – July 2021.  The Respondent does not accept that the Complainant had any contractual entitlement, or any entitlement based on the collective bargaining agreements.   The Respondent submits that the Complainant’s contract of employment provides that:

“3.  Remuneration:

Annual Salary

Your Annual Salary on appointment will be €52,242.54 payable on arrears by credit transfer on the 28th day of each month.  Salaries are usually reviewed annually.  In reviewing your salary, there is no obligation o the Bank to make any increase and any increase given in any year shall not create an entitlement or an expectation of future increase.  Increases when paid are based on your individual performance against agreed objectives.

Salary reviews are subject to the Company’s financial performance, its ability to pay salary increases and other factors deemed appropriate”.

The Respondent’s representative gave evidence in relation to the change from incremental pay to PRP.  She also provided evidence of the eligibility criteria for the years 2017, 2018, 2019 and 2020.  This formed part of the collective agreement.

The pay agreement for 2021 (Section 4) provided for the following eligibility criteria:

“This PRP award will be paid to colleagues in July 2021 and backdated to January 2021.  To be eligible colleagues are required to meet the following conditions:

·       Must have remained in continuous employment with Permanent TSB on a permanent or temporary contract of employment since 1st September 2020;

·       Have not received or tendered notice of termination of our contract of employment, this includes any colleagues who have accepted an offer of Voluntary Severance under the Enterprise Transformation programme;

·       Are on the payroll on 31st July 2021 and:

·       Do not have an active disciplinary written warning or any of the aforementioned in place”.

The Respondent gave evidence that the eligibility criteria and cut off dates are outlined in formally negotiated pay deals.  The date in 2021 was agreed on an affordability basis. 

The Respondent submits that the Complainant did not meet two of the eligibility criteria as she had tendered her resignation in May 2021 and left the Bank on 30/07/2021.  The eligibility criteria applied to other reward schemes in place.  The Respondent submits that this complaint was submitted under the Payment of Wages Act and the matter for consideration is whether the PRP award was properly payable to the Complainant and therefore would make any non-payment an unlawful deduction of her wages.  It is the Respondent’s position that any pay increases are not a contractual entitlement and as the PRP is provided outside of any contractual entitlement it is not properly payable to the Complainant.  The non-payment of the PRP is not an unlawful deduction and is therefore not a breach of the Payment of Wages Act.

The Respondent made reference to the case of The Institution of Engineers of Ireland / Engineers Ireland v Richard Seaver (PWD177) where the Labour Court considered the applicability of Section 5 of the Payment of Wages Act for the total non-payment of a bonus where the Respondent had discretion to pay same as provided in the contract of employment:

“In deciding not to pay any bonus or bonuses of a particular level, management was exercising its discretion under the terms of the contract of employment.  Any expectation and the amount, if any, paid by the Respondent was not lawfully payable within the meaning of the Act and cannot amount to an infringement of Section 5 as claimed in this case”.

It is the respondent’s position that while this case refers to bonus entitlements its PRP award is comparable as there is no contractual entitlement to this award.  In that context the Respondent rejects the Complainant’s claim in this case.

The Complainant in this case submitted that the Respondent made an unlawful deduction from her wages.  Section 1 of the Payment of Wages Act, 1991, defines wages as:

“ ”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 holiday, sick or maternity pay, or any other emolument, referable to this employment, whether payable under his contract of employment or otherwise”.

Deductions made by an employer from the wages of an employee are set out in Section 5 of the Act as follows:

“5(1) An employer shall not make a deduction from the wages of an employee (or receive 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”.

Having carefully considered the circumstances involved in the within case I am satisfied that the Performance Related Pay increase was not properly payable to the Complainant’s and therefore there was no breach of the Payment of Wages Act, 1991 by the Respondent.  This complaint is not well founded.

This complaint under the Payment of Wages Act, 1991 is not well founded.

Performance bonus. Properly payable.