Complainant

Respondent

Parties

Jackie Brown

Flutter Entertainment Plc

Representatives

Mandate Trade Union

IBEC

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-00040240-001

05/10/2020

The respondent operates around 250 betting stores in Ireland.  The complainant joined the company in April 2005 and she has been a manager in the Ashbourne shop since 2009.  Her hourly rate of pay is €17.78.  The complainant’s contract of employment provides that she is required to work 40 hours a week.  At the opening of the hearing, Mr O’Donnell said that, from six months after she commenced working for the respondent in 2005, and, apart from after the lockdown in 2020 and 2021, the complainant has worked 48 hours a week, with eight hours being paid at the overtime rate of time plus a half.

This is a complaint about the loss of overtime earnings when restrictions were eased during the Covid-19 pandemic.

Along with many retail outlets, at the commencement of the Covid-19 lockdown on March 16th 2020, betting shops were closed.  The complainant was off work, but she was paid for 40 hours each week that she was off.  The restrictions were partially lifted in June 2020 and the complainant returned to work.  However, she was rostered for 40 hours a week, and not for her usual 48 hours. 

On June 8th 2020, Mandate’s Divisional Organiser, Robert McNamara wrote to Ms Marion Ryan, the director of the respondent’s Irish retail business.  He informed Ms Ryan that the union had been notified that its members were returning to work on less hours than they usually work.  Mr McNamara said that, while the additional hours normally worked are generally referred to as overtime, the pay for these hours was an integral part of the employees’ core earnings and that the hours formed part of their implied and / or expressed contracts of employment.  He said that any co-operation by employees, where they work shorter hours “should not be regarded as permanent, nor should it be inferred or implied that our members have in any way accented or acquiesced to any changes to their terms or employment whether they be expressed or otherwise.”

Ms Ryan did not reply to Mr McNamara’s letter and there was no change to the decision to roster the complainant for 40 hours, instead of her usual 48 hours.

Legal Argument

The Payment of Wages Act 1991 establishes the right to protection against unlawful deductions from wages and section 5(1) outlines the requirement for an employee to be notified in advance by the employer before a deduction is made from wages.  In its submission, Mandate referred to the case at the UK Employment Tribunal of Potter v Hunt Contracts Limited[1], where the Tribunal, considering the similarly worded provision of the UK Wages Act 1986, found that a document must be issued to an employee which clearly states the deduction being made from their wages.  It must also make clear that, before the deduction is made, the employee has agreed by giving their consent in advance.

In the case of the complainant, the respondent did not seek, and neither did they obtain prior written consent before her hours were reduced, giving rise to a deduction from wages.  The reduction in the complainant’s wages was not a requirement under statute, nor was there any contractual authority providing for the reduction; consequently, Mandate’s position is that the deduction was unlawful.

The union contemplates that the respondent may attempt to rely on the defence that the reduction in hours which gave rise to a deduction in earnings is overtime hours, and consequently, not covered by the Payment of Wages Act.  They referred to the decision of the Employment Appeals Tribunal in Elizabeth Doyle v Dunnes Stores[2].  Ms Doyle was deprived of 2.5 hours of overtime because of a change in the opening hours of the branch where she worked.  The Tribunal found that the 2.5 hours formed part of Ms Doyle’s contract of employment and that the reduction in her wages was a breach of the Payment of Wages Act.  An appeal by Dunnes Stores to the High Court did not succeed.[3]

In the case at the Employment Appeals Tribunal of Sullivan v the Department of Education[4], the Tribunal decided that the word “payable” meant “properly payable” and that the employer had failed to pay the employee’s wages which, it concluded, were properly payable to her.

The union argues that it is necessary to examine the separate issues of “reduction” and “deduction” which were considered by the Labour Court in its decision on Inisbofin Community Services Programme Company Limited v Brenda Burke[5].  In that case, the respondent argued that a reduction in an employee’s wages is not encompassed by the intention of the legislation.  That argument was based on the decision of Mr Justice Edwards in McKenzie v the Minister for Finance[6] which was later considered by the President of the High Court, Mr Justice Kearns in Earagail Eisc Teoranta v Doherty[7].  Kearns P concluded that the reduction in the employee’s earnings may have constituted a deduction in breach of the 1991 Act. 

Returning to the Labour Court findings in Inisbofin, it was held that, where a deficiency or non-payment of the total amount of wages properly payable to an employee is not paid, this is to be regarded as a deduction.  The Court concluded that the reduction in Ms Burke’s pay by €1.00 per hour was to be treated as an unauthorised deduction and a breach of the Payment of Wages Act.

Conclusion

Concluding his submission on behalf of Ms Brown, Mr O’Donnell said that, since the beginning of 2022, she consistently worked more than 48 hours a week, because the company has a long-term shortage of employees. 

Based on these arguments and the supporting legal precedents, Mandate asked that I find the complainant’s case to be well-founded and that I direct the respondent to pay compensation which is just and equitable.

In the opening of her submission for the respondent, Ms O’Riordan argued that the complainant has failed to adequately outline the specifics of the alleged deduction from her wages and she has referred only to one date, June 29th 2020, when she claims that €213.56 was unlawfully deducted.  Ms O’Riordan said that the complainant never raised a grievance about this matter under the company’s Grievance Procedure.  As a result, the respondent has not had an opportunity to investigate or to resolve any matters that may have existed.

Background

The complainant’s contract provides that she is required to work 40 hours each week.  She earns an hourly rate of €17.78, which amounts to weekly wages of €711.20 for 40 hours.  A copy of the complainant’s contract of employment was included in the respondent’s book of papers for the hearing.

On the complaint form that she submitted to the WRC on October 5th 2020, the complainant alleges that the respondent “failed to pay me my full contracted hours which amounted to an illegal deduction from my wages.”  She did not outline the nature of the deduction, and only stated that an alleged deduction occurred on June 29th 2020 and that it has been “ongoing weekly since…”

On March 16th 2020, following the imposition of the government’s restrictions due to Covid-19, the respondent ceased operations in all its retail stores across the country.  The stores remained closed for 14 weeks until the end of June.  Over the course of the pandemic, the company followed the government restrictions with stores either temporarily closing or opening with limited capacity, reduced trading hours and strict public health measures.  The respondent’s business in the Republic of Ireland made operating losses of €8m in 2020 and €28m in 2021.

On May 28th 2020, Ms Marion Ryan, the respondent’s retail director for Ireland, contacted employees and advised them of the business’s plans for the remainder of 2020 in light of the pandemic.  Ms Ryan indicated that, over the following five weeks, the company would communicate with employees to let them know the plans for re-opening and to ensure that they were safe and confident about returning to work.  She said that the company would be asking employees to be flexible with their return to work and their shifts so that all colleagues could be supported, including employees with children and those caring for elderly or vulnerable family members.

In her submission, Ms O’Riordan said that the re-opening of the betting shops would be far from business as usual and employees were expected to be flexible and understanding on their return to work.  Business in July 2020 was down 56% compared to July 2019 and, at year-end, weekly business levels were down by 35% compared to December 2019.

While the retail stores were closed from March to June 2020, employees were paid for their full contractual hours and no employee was required to apply for government support, despite the detrimental impact of the pandemic on the business.  During the periods of lock-down in 2020 and 2021, between €27m and €30m was paid in wages when none of the retail employees were at work.

During the closure, the complainant never raised a grievance concerning the fact that she was not paid for her “full contracted hours.”  As set out in the complainant’s contract, overtime could only be availed of when it was required by the business.  From March 23rd until June 15th 2020, the complainant was paid for her full contracted hours of 40 hours per week and she didn’t raise an issue with this.

In the week of June 15th 2020, the stores opened with limited capacity.  Restricted trading hours meant that the stores opened for six hours less per week.  In the three weeks to July 6th 2020, the complainant worked 40 hours each week.  Ms O’Riordan said that, during the 14 weeks in 2020 when the respondent’s shops were closed, the complainant was paid €711.20 for working 40 hours each week, consistent with her hourly rate of €17.78.

The company’s overtime policy clearly states that “overtime should only be worked where necessary and where it is genuinely not possible to meet the needs of the business within the standard business hours.”  At the time, following the partial opening of the betting shops, there was no business requirement for any staff to work overtime because the stores were operating with limited capacity, mandated reduced opening hours and a 56% reduction in business.

Regarding overtime, the complainant’s contract states as follows:

You may be required to work overtime.  Overtime is paid at time and one half for normal hours worked in excess of 40 hours in any one given week.  This excludes hours paid at premium rate – Sundays & Evenings.

Overtime hours are only worked when the business needs employees to do so.  Overtime is always based on the company’s needs and is worked only when required.  The complainant was never informed that she was entitled to a 48-hour contract and she was not given a guarantee that she could work a certain number of overtime hours.  The company’s overtime policy refers to standard working hours:

The “standard working hours” are an employee’s regular, contracted working hours.  These hours have been specified in employee contracts of employment and follow legal guidelines regarding minimum or maximum limits.  

Before working overtime, the hours must be approved by a district manager.  When employees returned to work following the first and second lockdowns, they were informed that they were not to work overtime without getting approval in advance.  The Overtime Policy provides as follows:

All overtime must be pre-approved and under no circumstances can employees schedule their own overtime without approval…A request for overtime hours to be worked by the Shop Manager, where there is a requirement to do so, will need to be emailed to their District Manager in advance of working the overtime hours.  All overtime must be approved by their District Manager.

In response to the new public health guidelines, the respondent reviewed its business model in line with the challenges presented by the Covid-19 pandemic which resulted in financially devastating consequences.  As part of that process, the company decided to review its overtime policy.  Having worked closely with the employees’ forum representative group and district managers, a new overtime policy was introduced and issued to employees in the retail stores.  The policy defines overtime; it deals with new processes and notification periods, pay for overtime, the process to be followed by managers and final approval by district managers.

The Respondent’s Position on this Complaint

It is the respondent’s case that there has been no unlawful deduction from the complainant’s wages.  She has worked the hours required by the business, which were advised to her in advance of her accepting her job.  She never received wages below her contractual wages.  In reaching this conclusion, the respondent is taking account not only of the complainant’s written contract, but the operation of her contract in reality and the established norms of the respondent’s business in general.

Like Mandate, Ms O’Riordan also quoted from section 5(6) of the Payment of Wages Act which addresses deductions from wages.  She submitted that it is important to establish what wages are “properly payable” to the complainant on “the occasion” referred to.  It is the respondent’s case that the wages properly payable to the complainant were the wages which were advised to her in her contract of employment.  She argued that, for this reason, there is no jurisdiction for this complaint to be heard under the Payment of Wages Act.

Concluding her submission, Ms O’Riordan referred to the decision of an adjudicator in A Sous Chef v A Hotel[8] where the adjudicator concluded that there had been no deductions from the sous chef’s wages, as he was on an “all-in salary.”

Conclusion

Ms O’Riordan informed me that the company does not recognise Mandate for the purpose of collective bargaining.  She said that the crux of this case is that 40 hours were paid during 14 weeks of the lockdown, at a cost to the company of €30m.  No issue about this was raised by employees.  Employees were paid their wages and did not have to apply for the pandemic unemployment payment.  Since June 2020, the business has not been operating normally.

When the shops re-opened in June 2020, Ms O’Riordan said that employees were brought from other shops to fill in so that everyone could get their contracted hours. 

Ms O’Riordan disputed the complainant’s claim that she generally worked 48 hours a week and she said that the company’s analysis shows that her average weekly hours 2019 was 47 hours.  Ms O’Riordan also disputed the complainant’s assertion that some employees worked in excess of their contracted hours when the shops opened in 2020.  She said that employees were brought from other shops so that they could work their contracted hours.

Evidence of the Complainant, Ms Brown

At the hearing, the complainant said that she has worked up to eight hours of overtime every week since about six months after she joined the company in April 2005.  She rosters herself for these hours.  She also works every second Sunday.  She said that her overtime is comprised of four hours on two nights a week.  She said that she is happy with these hours and that she does the hours for financial reasons.  She is used to the regular income provided by working 48 hours every week.  Ms Brown recalled that, at the time of the Cheltenham Races in March 2020, the district manger asked her to take a day off, so that she wouldn’t exceed 48 hours in one week.

When the shops re-opened in June 2020, Ms Brown said that she was told to do her “normal” hours and she put herself on the roster for 48 hours.  She said that her district manager then took her off doing the two late nights.  Other employees were brought in who worked more than their normal hours.  She said that an employee with a 20-hour contract worked for 30 hours, but others did more than 48 hours and one person worked 53.5 hours one week.  She said that the shop was short-staffed and the company paid for employees to get taxis from other shops to work in the Ashbourne shop.  In August 2020, Ms Brown said that a district manager permitted her to do her normal overtime, but then another manager said that she was only to work 40 hours.  In November 2021, Ms Brown said that a district manager asked her to work one late night in a particular week.  She said that she agreed, on condition that she was given two late nights, and the district manager agreed.  By the end of November 2021, Ms Brown said that she was back working her normal 48-hour week.

Evidence of Mr Pat Hand, Head of Operations for the Irish Retail Business

Mr Hand said that the business is now 25% behind what it was before Covid-19.  He said that in June 2020, business was reduced by 65% and, in December 2020, it was down 35% on the same month in 2019.  He said that older customers are slow to return to the shops and that the growth in the online business doesn’t match the fall-off in the retail business.  Mr Hand said that there is a reduced requirement for hours to be worked in the shops.  He said that overtime is still required to cover for sickness, holidays and other absences, but due to the slow-down in the business, there isn’t the same need for overtime.

Mr Hand said that there is no ban on overtime, and that many employees worked overtime during the week of the Cheltenham Races in 2021. 

Mr Hand said that there is a reduction in staff in the retail business because of the reduction of one hour of opening in the morning, and the reduction in the number of employees required on Saturday afternoons.  Before Covid-19, the start and finish times for retail employees was from 8.30am to 9.30pm.  Employees came to work at 8.30am and the shops opened at 9.00am.  Now, employees start at 9.30am and the shops open at 10.00am, meaning that the opening hours in the shops has been reduced by one hour each day.  To reduce pressure on public transport, until December 2020, shops were only permitted to open at 10.30am.  The shops now close on Sundays at 6.30pm.  On Saturdays, two people are now required to work instead of three.  Mr Hand said that the lack of overtime does not mean that the shops have to close.

Mr Hand reiterated the respondent’s case that overtime must correspond to a business need.  He said that overtime was always voluntary.  He rejected the union’s argument that the company reduced the working hours of employees and he referred to the fact that employees were paid for their contractual hours for 14 weeks when the shops were closed.

Mr Hand also referred to the complainant’s statement that she had no choice but to come to the WRC.  He said that no grievance was raised and that the company didn’t get an opportunity to resolve matters.

Consideration of the Facts

It is apparent that the complainant is contracted to work for 40 hours a week but that, for most of her working life with the respondent, she has worked 48 hours every week.  At the hearing, I was informed that the complainant has returned to working her “normal” level of overtime and the timeframe during which she was not permitted to work overtime was between June and December 2020 and May and December 2021.  In her evidence, the complainant was convincing in her description of her working life, which was based on two long shifts of 12 hours and three shifts of eight hours.  I am satisfied that these shifts were the complainant’s normal working hours.  I am also satisfied that, until June 2020, she did not seek permission on a weekly basis to work these hours, but that she was relied upon by the respondent to work in their Ashbourne shop for one or two late nights every week.

It is apparent from the complainant’s evidence that she normally worked for 48 hours a week and her normal weekly pay was €924.56.  Compared to her post-lockdown wages in 2020 and 2021 of €711.20, this is a difference of €213.36 per week, or 30% of her gross weekly pay.

Loss of Overtime and Loss of Earnings

The respondent’s position is that the complainant has no contractual entitlement to overtime hours, whereas the union argues that, by virtue of the frequency and number of overtime hours she worked over many years, she has an implied contractual entitlement to be rostered for her “normal” overtime hours.  If this argument was aired under the Industrial Relations Act, an adjudicator or the Labour Court might find merit in the union’s case.  However, that argument would be about loss of overtime and the complaint I must consider is about loss of wages.  The issue I must consider is if there has been an illegal deduction from the complainant’s wages.

The Relevant Law

Section 1 of the Payment of Wages Act 1991 (“the Act”) provides a definition of “wages:”

[W]ages 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, and,

(b)  any sum payable to the employee upon the termination by the employer of his contract without his having given to the employee the appropriate prior notice of the termination, being a sum paid in lieu of the giving of such notice.

The remainder of this section deals with the issue of expenses which are not wages and is not relevant to the complainant’s case.  The definition of wages is broad and encompasses “any sum payable” to an employee related to their job, whether that payment is governed by a contract or otherwise.

Section 5(6) of the Act provides that, to ground a claim under the Act, wages must be properly payable:

(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.

The union’s argument is that, because of the respondent’s decision not to allow the complainant to work overtime, there is a “deficiency” in her wages, and this deficiency is an illegal deduction.  To reach a conclusion on this matter, I must consider if the wages that the complainant would normally earn in overtime pay, were “properly payable” when she was not permitted to work overtime between June and December 2020 and between May and December 2021.

Examination of the Legal Precedents

Mr O’Donnell referred to the decision of the former Employment Appeals Tribunal (EAT) in Sullivan v the Department of Education (footnote 4) and, while the issue in that case is not about loss of overtime, the Tribunal’s reference to a deduction in wages is useful:

“…the Tribunal considers that if an employee does not receive what is properly payable to him or her from the outset then this can amount to a deduction within the meaning of the 1991 Act. We take ‘payable’ to mean properly payable.”

The Act does not define the concept of “properly payable” and I must reach a conclusion on the issue based on the objective facts, with due deference to previous findings of the Labour Court or other authorities.

Most claims about loss of overtime which have been considered by the Labour Court are brought under the heading of the Industrial Relations Act 1969 as “disputes.”  The precedents cited by Ms O’Riordan, for the respondent are all considered under the Industrial Relations Act as claims for compensation for loss of overtime (Coombe Hospital v Voluntary Hospitals Craft Group[9], HSE Mid- West v SIPTU[10] and HSE v IMPACT[11]).  This is indicative of the generally understood position that the fallout from a loss of overtime is a sense of unfair treatment and a claim for compensation, rather than a legal entitlement to pay.

Mr O’Donnell referred to the determination of the former EAT in 2012 in the case of Elizabeth Doyle v Dunnes Stores.  Ms Doyle and Dunnes Stores had an interesting journey from the Rights Commissioners to the Employment Appeals Tribunal, then to the High Court and, in 2017, a return visit to the EAT.  Ms Doyle worked 2.5 hours of overtime every week for 30 years and, in 2009, when the branch of Dunnes Stores where she worked stopped opening late on one night a week, she lost that overtime.  She submitted a complaint under the Payment of Wages Act 1991; however, a former Rights Commissioner found that there had been no illegal deduction from her wages.  She appealed this finding to the EAT which determined in her favour, finding that there had been an illegal deduction from her wages for a period of 26 weeks (footnote 2).  Dunnes Stores appealed that determination to the High Court on a point of law (footnote 3).  Mr Justice Birmingham concluded that the EAT decided the case on the facts and that an appeal on a point of law could not succeed.  He also made the following remarks regarding the facts themselves:

“I am bound to say that I find the factual conclusions arrived at slightly surprising and I think that if I was called on to decide upon the facts I might well have reached a different conclusion, but that it not my role in this case.”         

In 2017, Dunnes Stores returned to the EAT to appeal against another finding of a Rights Commissioner in favour of Ms Doyle regarding the loss of 2.5 hours of overtime for periods from 2012 until 2014[12].  On the date of the hearing, she was back working 2.5 hours’ overtime every week.  The Tribunal found as follows:

“An employee is only entitled to be paid for one late night if worked and because the claimant did not work this one late night for the periods as set out above, she is not entitled to the payments.  The respondent is only obliged to provide overtime or one late night, equating to 2.5 hours if it was available and as such, custom and practice does not apply.”       

By this decision, the earlier finding of the Tribunal regarding the same dispute between the same parties was overturned.  The Tribunal was clear that, although Dunnes Stores removed the opportunity for the overtime from her, Ms Doyle was not entitled to payment for overtime that she did not do.

I note the findings of the Labour Court in the case of Inisbofin Community Services (footnote 5) which Mr O’Donnell also presented as a precedent in support of the complainant’s case.  I find however, that the reduction by €1.00 per hour in the complainant, Ms Burke’s wages falls squarely within the meaning of a deduction in wages.  The claim before me is different, as it is a claim for loss of earnings for work not done, albeit at the will of the employer and not the employee.

Findings

With the closure of the respondent’s shops in March 2020, the complainant remained at home, but she was paid as if she had been at work for 40 hours a week – the hours stipulated in her contract.  She did not complain that she didn’t get paid for her normal overtime hours, which is a reasonable response to a situation when most employees who were laid off in businesses across the country relied on the pandemic unemployment payment of €350 per week.  I find no fault with the complainant because she did not complain about the reduction in her wages during the 14 weeks when the betting shops were closed.

When she returned to work in June 2020, the complainant was informed that she was to limit her hours to 40 per week.  This arose because of the contraction in the opening hours in the shops and the significant reduction in trade.  I accept the complainant’s evidence that she was not rostered for working two late nights and that others were called in to work instead.  It seems to me that the respondent attempted to reduce labour costs by rostering part-time employees to cover the hours normally worked by the complainant.  Employees who work less than 40 hours a week are not paid overtime, so this resulted in a 33% saving in wage costs (€17.78 per hour instead of €26.67) for the overtime hours normally worked by the complainant.  If an employee covering the complainant’s shift was not a deputy manager, their hourly rate would be less and the saving would be greater.  The decision not to allow the complainant (and many of her colleagues) to work her normal late nights and to roster another, lower-paid employee to work instead seems to be one of the measures taken by the company to reduce the significant losses of the pandemic, but this came at a cost to employee relations.  However, my job is to consider this complaint under the heading of the Payment of Wages Act and not as an industrial relations matter.

I note the respondent’s case that the complainant never raised a grievance about her loss of overtime.  It is apparent however, from the letter from Robert McNamara of Mandate to Marion Ryan of the company on June 8th 2020, that Mr McNamara was seeking to engage with the respondent to resolve the issue of the loss of overtime.  Even if the company has a policy of not communicating with the union, they were aware from this letter that their employees had a grievance, but they took no action to resolve it.

Considering the pattern of overtime worked by the complainant, I am satisfied that she worked between eight hours of overtime every week to bolster her weekly pay of €711.20 and that, for the most weeks of the year, she earned around €200 on top of her basic pay.  I am satisfied that the complainant’s overtime was regular and rostered.  On the date of this hearing in April 2022, she had returned to her normal level of overtime working.  There is no evidence to indicate that overtime was or is compulsory and it seems to me that, if the complainant decides that she no longer wants to work the late nights, someone else will be rostered to cover the hours.

Conclusion

In conclusion therefore, I find that the overtime worked by the complainant, while it was regular and rostered, was not compulsory.  The complainant is not contractually required by her contract to work the level of overtime that she works.  The complainant rostered herself for the additional hours and, I am satisfied that, if she decides to revert to a 40-hour week, there will be a significant reduction in her wages, but there will be no other repercussions.

In 2020 and 2021, when the respondent’s shops re-opened after the Covid-19 restrictions, the complainant was not permitted to work her normal level of overtime and her earnings were reduced.  I acknowledge that the effect on her wages was significant; however, considering the fact that the hours lost were not in fact hours worked, it is my view that the loss of overtime pay is not encompassed by the meaning of “wages properly payable.”  I find therefore, that, when the complainant did not work her normal overtime hours, there was no illegal deduction from her wages.

For the reasons I have set out above, I decide that this complaint under the Payment of Wages Act is not well founded.

Loss of overtime, payment of wages, wages properly payable