ADJUDICATION OFFICER DECISION
Adjudication Reference: ADJ-00037431
Parties:
| Complainant | Respondent |
Parties | Anthony Bambury | Tornier Orthopedics Ireland Limited |
Representatives | Mr Maurice Osborne BL instructed by Catherine O'Brien O'Brien & Company Solicitors | Sophie Crosbie IBEC |
Complaints:
Act | Complaint/Dispute Reference No. | Date of Receipt |
Complaint seeking adjudication by the Workplace Relations Commission under Regulation 10 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003) | CA-00048865-001 | 25/02/2022 |
Complaint seeking adjudication by the Workplace Relations Commission under Regulation 10 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003) | CA-00048865-003 | 25/02/2022 |
Complaint seeking adjudication by the Workplace Relations Commission under Regulation 10 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003) | CA-00048865-004 | 25/02/2022 |
Complaint seeking adjudication by the Workplace Relations Commission under Regulation 10 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003) | CA-00048865-005 | 25/02/2022 |
Complaint seeking adjudication by the Workplace Relations Commission under Regulation 10 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003) | CA-00048865-007 | 25/02/2022 |
Complaint seeking adjudication by the Workplace Relations Commission under Regulation 10 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131 of 2003) | CA-00048865-009 | 25/02/2022 |
Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994 | CA-00048865-011 | 25/02/2022 |
Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991 | CA-00048865-012 | 25/02/2022 |
Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991 | CA-00048865-013 | 25/02/2022 |
Date of Adjudication Hearing: 09/11/2022
Workplace Relations Commission Adjudication Officer: Thomas O'Driscoll
Procedure:
In accordance with Section 41 of the Workplace Relations Act, 2015 following the referral of the complaints to me by the Director General, I inquired into the complaints and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaints. Both parties submitted extensive written submissions. There were numerous complaints submitted under the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. no.131 of 2003). It was agreed by the Complainant’s representative that these Complaints can be reduced to two consolidated complaints namely: a breach of Regulation 4 regarding the non-retention of terms and conditions of employment and a breach of Regulation 8 in that it is alleged there was no consultation with the Complainant’s representatives prior to a Transfer.
An issue arose of identifying the relevant complaints before me at the hearing under the Payment of Wages Act 1991. It transpired that the Complainant had submitted complaints on 25 January 2022 which were grouped under the adjudication number ADJ-00037431. The Complainant submitted further complaints under the Act in July 2022 which seems to have been collated under ADJ-00039768. These latter complaints differed on the question of cognisable period only. The latter case has yet to be given a date of hearing. I informed both parties that I would make further enquiry with the Workplace Relations Commission (WRC). I clarified the position with both parties in subsequent correspondence that the relevant complaints to be considered, particularly on the issue of cognisable period, would be complaints submitted on 25 January 2022 only.
The Complainant agreed that CA-00048865-012, and -013 was an amalgamated complaint under the Payment of Wages Act 1991.
Background:
The Complainant commenced employment with the Respondent in February 1988. The Respondent is a multinational corporation engaged in the provision of medical technologies. The Complainant rose from a role of production operative to become a member of the Quality Assurance team. The Complainant was paid the sum of €891.17 gross on a weekly basis. The Complainant submits that a shift premium was stopped in September 2021, without his agreement, and that this was an unlawful deduction under the Payment of Wages Act 1991. He also submits that the Respondent breached the Terms of Employment (Information ) Act 1994 by not informing him in writing of a change in his terms of employment. The Complainant further submits that the Respondent breached the Transfer of Undertakings Regulations (TUPE) by not allowing him to retain his shift allowance payment after a Transfer as defined under the Regulations and furthermore that his representatives were not consulted in advance of the Transfer. The Respondent submits that the Complainant did not work a shift pattern as laid down in the Employee Handbook. . He was not entitled to a shift premium therefore the removal of the premium was not an unlawful deduction. It is the Respondent’s case that at no time did any change in his terms and conditions take effect as to require notification in line with the Terms of Employment (Information) Act 1994. The Respondent further submits that there was no Transfer of Undertakings but that there was a share buyout, therefore the Complainant’s position on these particular complaints was misguided in law. |
Summary of Complainant’s Case:
CA-00048865-001 to -009 Transfer of Undertakings Complaints: In November 2020 the acquisition of the Respondent by Stryker was completed. On 26 May 2021, the Complainant received an email from a representative of the Respondent. This email attached notes of a meeting held with a Human Resources Manager of Stryker (the entity which acquired the Respondent). The notes of this meeting confirmed that there “were no plans to change Terms and Conditions (T&Cs) of employment for employees in Macroom”. On 22 February 2021, the Complainant received an email from the Respondent. It provided as follows: “SIPTU requested a letter from Stryker, stating that all our members terms and conditions of employment remain the same and will only be changed following negotiation and agreement being reached between both parties” On 1 October 2020, the Complainant received an email from the Respondent stating that they were seeking confirmation from Wright Medical that there would be no change to employees’ terms and conditions of employment. On 12 October 2020, the Complainant’s trade union representative wrote to the Respondent highlighting their concerns that all employees’ terms and conditions of employment would only be changed following negotiations and agreement. On 13 October 2020 a SIPTU representative emailed the appropriate manager in the Respondent company reiterating the importance that employees’ terms and conditions would be maintained once the acquisition of the Respondent entity had taken place. CA-00048865-12 Payment of Wages Complaint: The Complainant gave evidence in affirmation that he moved to the Quality Control and Shipping Department in 2000 and instead of a raise he agreed with a manager at the time that he would retain his shift allowance, though he worked days. The Complainant stated that he had retained this shift allowance for over 20 years with the full acquiescence of the company. He exhibited a mortgage verification letter of 22 May 2015 from the Respondent where it showed his position as Quality Engineering Technician which indicated that shift allowance was a regular part of his pay. In July 2020 he was informed that the Respondent wished to take his shift allowance from him, and after a series of emails which included discussions with the Respondent, the Respondent deducted his shift allowance on 9 September 2021, though the Complainant made it quite clear throughout that he was not in agreement with their actions. The amount of the deduction amounted to €139.49 gross per week. In cross examination the Complainant agreed that the Company Handbook stipulated that the agreed shift pattern payment required working an actual shift pattern. The Complainant accepted that he did not use the internal grievance procedure to process his claim but that he felt that the extensive correspondence in emails signalled his dissatisfaction with the cancellation of the shift premium. Complainant Legal Argument: Transfer of Undertakings: Regulation 4 of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (“the Regulations”) provides as follows: (1) The transferor's rights and obligations arising from a contract of employment existing on the date of a transfer shall, by reason of such transfer, be transferred to the transferee. (2) Following a transfer, the transferee shall continue to observe the terms and conditions agreed in any collective agreement on the same terms applicable to the transferor under that agreement until the date of termination or expiry of the employment existing on the date of a transfer shall, by reason of such transfer, be transferred to the transferee. Regulation 8 provides as follows: (1) The transferor and transferee concerned in a transfer shall inform their respective employees' representatives affected by the transfer of— (a) the date or proposed date of the transfer; (b) the reasons for the transfer; (c) the legal implications of the transfer for the employees and a summary of any relevant economic and social implications of the transfer for them, and (d) any measures envisaged in relation to the employees. The Complainant submits that the Respondent has failed to adhere to their legal obligations as set out in Regulation 4 and Regulation 8 of the Regulations. The Complainant cites the recent decision of Bernard Meehan v Securway At Risk Security Group Limited Star Security ADJ-00034472, where the AO noted: “In this case the rights and obligations arising from the complainant’s contract of employment did not transfer to the new employer so at the point of each fortnight’s payment the employer has been in breach of the Regulations by not honouring his terms and conditions as set out above. In considering redress in this respect, the AO continued: “The complainant has urged that I take account of the European decision in Sabine von Colson and Elisabeth Kamann v Land Nordrhein-Wesfalen [1984] ECR 1891 where the CJEU set out that where a right grounded in European law has been infringed the judicial redress provided should not only compensate for economic loss but must be dissuasive and provide a real deterrent against future infractions.” The Complainant submits that In Meehan, the employer had also removed a wage payment on the transfer of undertaking and failed to comply with terms and conditions which had previously been adhered to with the previous employer. CA-00048865-011 - No notification in writing of a change to terms of employment (Term of Employment {Information) Act 1994. The Complainant submits that in this case the Respondent has attempted to unilaterally change the terms and conditions of his contract of employment despite the payment of the disputed wage forming part of the Complainant’s contract in both express and implied terms. The Complainant contends that the recent change in legal ownership of the Respondent entity coincided with the unilateral change of the Complainant’s contract of employment by the Respondent. The Complainant submits that the new owner of the Respondent entity clearly took exception to the payment of the shift premium and has decided to remove this payment despite the agreement that the Complainant would continue to receive the said payment. Payment of Wages Act 1991 The Complainant submits that the Respondent, in unilaterally altering the Complainant’s contract of employment by removing his entitlement to the shift premium payment breached section 5(1) of the Payments of Wages Act 1991 (“the 1991 Act”). Section 5(1) of the 1991 Act provides: An employer shall not make a deduction from the wages of an employee (or receive any 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. 3.2 Section 1 of the 1991 Act provides: “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 any holiday, sick or maternity pay, or any other emolument, referable to his employment, whether payable under his contract of employment or otherwise.” The Complainant contends that the disputed shift premium payment clearly amounts to “any other emolument” for the purposes of the definition of wages pursuant to section 1 of the 1991 Act. The Complainant submits that there was no term in the Complainant’s contract of employment which stated that he could be deducted any wages and at no point did the Complainant consent to any deduction. The Complainant argues that in circumstances where the disputed shift payment premium was paid to the Complainant for a period of in excess of ten years, and in total twenty-one years, it became a custom and practice and as such an implied term of the contract of employment between the Complainant and the Respondent. The Complainant opened O’Neill v Dunnes Stores PW 44/2005, where the employer paid an annual bonus to the employees in question for a period of in excess of seven years. The employer then unilaterally removed the said bonus payment. The Labour Court concluded that this amounted to an unlawful breach of the employee’s contract of employment. The Court in O’Neill, referring to the practice of paying the bonus which had developed over seven years, noted: “The respondent’s assertion that the bonus ‘was always subject to variation’ is disingenuous and has no merit; it was varied twice, once in 1997 when it was increased, and once in 2004 when the form of payment was unilaterally changed and replaced with the vouchers. But in between it became an established part of the complainants’ contracts of employment as part of their remuneration and protected by the Payment of Wages Act.” The Complainant cited Thomas Hickey v Dept of Defence ADJ-00028221 where reference was made to the decision An Area Manager v An Engineering Company ADJ-00028414, which considered the issue of custom and practice as an implied term of a contract of employment. It was conclusive in determining that customs and practices can amount to an implied term of a contract of employment. In his decision the Adjudicator held that custom and practice (such as lay off) can form part of an employee’s contract of employment as an implied term. The Complainant cited Ramunas Jasinkas v MCR Outsourcing Limited ADJ-00030932 the complainant was working as a Security Officer for the employer. The AO found that a term can be implied into a contract of employment by what is known as custom and practice and that this arises where a custom or practice is so well known, clear and uninterrupted that it can be implied into a contract. The Complainant submits that In Ramunas Jasinkas, reference was made to the England and Wales Court of Appeal decision of Albion Automotive Limited v Walker [2002] EWCA Civ 946. This decision set out a number of factors for the court to consider in determining whether a custom and practice has given rise to an implied term in a contract of employment: (a) Whether the policy was drawn to the attention of the employees; (b) Whether it was followed without exception for a substantial period; (c) The number of occasions on which it was followed; (d) Whether payments were made automatically; ; (e) Whether the nature of communication of the policy supported the inference that the employer’s intended to be contractually bound; (f) Whether the policy was adopted by the agreement; (g) Whether employees had a reasonable expectation that the enhanced payment would be made; (h) Whether terms were incorporated in a written agreement; (i) Whether the terms were consistently applied. The Complainant opened Noreside Construction Limited v Irish Asphalt Limited [2014] IESC 68 where the Supreme Court referred to five requirements that must be filled before a custom may be considered as an implied term of a contract. (i)The custom must have acquired such notoriety that the parties must be taken to have known of it and intended it should form part of the contract. (ii)The custom must be certain. (iii)The custom must be reasonable, and the more unreasonable it is the harder it will be to prove that it exists. (iv)Until the courts take judicial notice of a custom it must be proved by clear and convincing evidence. (v)The custom must not be inconsistent with the express contract. The Complainant submits that in this instant case he was in receipt of the premium shift payment from 21 August 2000. As such, it had formed a fundamental term of his contract of employment as a Production Operative shift worker. The shift premium payment was also expressly referred to on the Complainant’s pay slip. The Complainant contends that the shift premium payment formed part of his wages, as per section 1 of the 1991 Act. In October 2010, the Respondent offered the Complainant a role in the Quality Assurance Team and the Complainant submits that the express agreement of holding on to his shift payment with representatives of the Respondent, as well as being expressly provided for on his pay slips, resulted in the payment of the shift premium becoming an implied term of his contract of employment owing to the custom which had developed for a period of in excess of ten years. He further contends that In light of the time period over which he received the shift premium payment, this custom developed such a notoriety that the Respondent must have known that the Complainant was receiving the shift payment as a member of the Quality Assurance Team. The Complainant contends that there is no provision in his contact of employment providing for a deduction in wages. The Complainant asserts that the chronology of events prior to the deduction of the wages clearly indicates that the entity (Stryker) which took over the Respondent business took exception to the agreement the Complainant had with the previous owner of the Respondent (Wright Medical). The Complainant exhibited an internal email from a member of management on 22 July 2020 which stated that the situation had “to be regularised from the company’s perspective and cannot continue” . In a further exhibited email of 26 August 2020, between representatives of the Respondent, the Complainant contends that it is acknowledged that a “custom and practice” had developed whereby in the absence of documentation evidencing a shift payment agreement, the default position was that an employee such as the Complainant was entitled to stay on the terms and conditions previously agreed. |
Summary of Respondent’s Case:
CA-00048865-001 to -009 Transfer of Undertakings Complaints: The Respondent submits that the Company, Tornier Orthopedics Ireland Limited, is a limited company and is the legal entity which employs the Complainant. The Company was established as Donovan Medical Equipment Limited in 1980 and changed its name to Tornier Orthopedics in 2008 when a move to a new site in Macroom was announced. In November 2020, shares in the Company's parent Company Wright Medical were sold to Stryker. A copy of the press release announcing the sale was exhibited. The Respondent submits that there was no change in the legal identity of the employer in Macroom as the transaction involved a share sale at parent company level. This was confirmed to the recognised trade union for the grade and acknowledged and accepted by the trade union at a union meeting held on 20th April 2021. The Respondent submits that prior to 10 November 2020, the Complainant’s employer was the registered company 67915 Tornier Orthopedics Ireland Ltd. This registered legal entity continued to be his employer after the date of sale. The Respondent submits that it is generally accepted that where there is no change in legal identity of the employer, no transfer of undertakings can exist. It is also generally accepted that a share sale does not amount to a transfer of undertakings within the meaning of the legislation. The Respondent asserts that prior to the transaction, Tornier was a wholly owned subsidiary of Wright Medical. Post the transaction, that continued to be the case, but the previous parent company was delisted from the stock market and became a wholly owned subsidiary of Stryker. The Respondent asserts that there was no current or new employer such as to give rise to obligations on both transferor and transfer, therefore, the Respondent submits that the complaints are misguided in law. CA-00048865-011 - No notification in writing of a change to terms of employment (Term of Employment {Information) Act 1994. It is the Respondent's case that no change occurred at any time in the Complainant’s terms and conditions of employment such as to require notification in line with section 5(1) of the 1994 Act. The Respondent submits that it is the Complainant who is alleging that a change in his term and condition of employment took place and therefore the onus is on the Complainant to demonstrate when such a change took effect. It is the Respondent's case that no change in term and condition of employment took effect such as to justify the making of an amendment in accordance with section 5. At all times, the Respondent submits, that the Company handbook made it clear that an employee would be eligible for shift pay, if the appropriate shift pattern was worked. When the employee did not work shift, he did not become eligible for shift rate. The Respondent asserts that is significant to note that the Complainant was employed prior to the commencement date of the Terms of Employment Information Act on 16th May 1994. The Complainant always had the option of requesting a written contract of employment in line with section 6 of that Act and yet elected not to do so, despite alleging that a change had been agreed in 2010 and contending that he ought to have received an addendum letter. The Respondent contends that it makes no sense for the Complainant to allege that he did not receive an addendum letter, in circumstances where he was not obliged to receive a written contract of employment unless he himself requested one. In Murphy v Tesco Ireland TE7/1999 the EAT found that it is an essential proof in such cases that such a request had been made. In this instance, in the absence of a written contract, the onus is similarly on the Complainant to demonstrate that he requested a written contract (and therefore an addendum letter) during his employment. The Respondent contends that the essence of the requirements of section 5 is that the employee has written notice of any changes that the employee perceives to their contractual terms. The Respondent asserts that there is no doubt in this instance that the employer sought to engage fully with the employee, and he was provided with information in writing before the ceasing of the overpayment in September 2021. CA-00048865-12 Payment of Wages Complaint: The Respondent submits that following the acquisition of the business by Stryker in November 2020, it became apparent that the Complainant was in receipt of an overpayment in the sense that he was in receipt of shift pay on a weekly basis but was not regularly working the associated hours with shift. The Respondent met with him and provided him with three months’ notice that the current overpayment would end with effect from 2nd September 2021. He was provided with the opportunity to work shift if he wished to continue to be in receipt of payment but declined this opportunity. His pay was adjusted to remove the overpayment of 18% shift premium with effect from 10th September 2021 and he was provided with three months’ notice in advance of the ceasing of the overpayment. The Respondent rejects that there was any express or implied contractual term that he was entitled to be paid shift rate for working standard working hours. Had such an arrangement been agreed, the Respondent submits, it was in direct contravention of the terms of the Employee Handbook and the collective agreement, which clearly implied that the provision of shift pay was for unsocial hours worked and in circumstances where unsocial hours were not worked, the Employee was no longer eligible to receive shift pay. The Respondent submits that, in circumstances where no written contract of employment existed between the parties, it is reasonable for the parties to rely on the terms of the Employee Handbook which clearly set out other terms and conditions enjoyed by the Complainant. The Complainant's terms and conditions of employment were also set by collective agreement, which established the payment of an hourly rate, overtime, shift rate, service pay and bonus. The removal of shift pay from the Complainant was not opposed by the Complainant's trade union and this is consistent with normal industrial relations practice which reserves the payment of collectively agreed terms such as a shift rates to employees who are working the relevant shift pattern. The Respondent asserts that it is clear from the express terms of the Employee Handbook that the employee was only eligible to receive shift rate, where shift was in fact worked. In this regard, the Respondent believes that the payment of shift rate to the employee during periods when shift was not worked should be characterized as an overpayment, rather than an implied term and condition of employment. In this regard, the Respondent asserts, it was eligible to seek recovery of the shift rate paid as an overpayment to the employee for shift rate paid prior to 2 September 2021, the Respondent did not in fact seek recovery of the overpayment. The Respondent submits that the Complainant was also provided with the option of working the unsocial hours to retain the payment and elected not to avail of this option. Without prejudice to its position, the Respondent submits that if it is found that the shift premium pay had become an implied term and condition of employment, then the Respondent provided notice in writing that the Complainant would no longer be eligible to receive shift rate in June 2021 and this notice took effect on 2 September 2021. After this date, the Complainant did not work shift, nor was accordingly eligible to receive shift rate. Furthermore, the Respondent asserts that if it is found that an implied contract term existed prior to September 2021, it was reasonably open to the Respondent to vary such term and the Respondent did in fact vary such term by notice in writing to the Complainant issued in June 2021. Whilst the Complainant may not have been happy about such a variation, he did not act on the unilateral variation at the time and as such waived his right to dispute the variation. No grievance or industrial dispute was raised by the Complainant. The Respondent submits that as an employee whose terms and conditions of employment benefited from collective agreements, it is reasonable to expect that any implied conditions could be reasonably varied to bring them in line with the generally understood rules attaching to collective conditions of employment, namely that to be eligible for shift pay, one must be prepared to work shift. In all other respects, the Respondent submits that the Complainant benefitted from the collectively agreed terms and conditions. Accordingly, the Respondent asserts, it is reasonable that he be subject to the same conditions of employment as his peers on collectively agreed terms and conditions, namely that to receive shift pay, one must work shift. The Complainant did not work shift on or after 2 September 2021 and therefore was not eligible to receive shift rate. Accordingly, the shift rate was not 'properly payable' to the employee after that date. The HR Manager with responsibility for the Macroom site gave evidence that there was no transfer of undertakings in 2020 but that it was an acquisition of shares by Stryker in a global transaction. She stated that the Complainant was operating under unique conditions where he was paid shift and that this created an anomaly when he was not working shift. She said that that this was due to the legacy of what transpired before she took up the position. |
Findings and Conclusions:
CA-00048865-001 to -009 Transfer of Undertakings Complaints: Before complaints under the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. no.131 of 2003) (hereinafter the “TUPE Regulations”) can be considered I must first establish if a transfer as provided for under the Regulations occurred. Regulation 3 deals with application of the Regulations where it provides, in its relevant parts: (1) These Regulations shall apply to any transfer of an undertaking, business, or part of an undertaking or business from one employer to another employer as a result of a legal transfer (including the assignment or forfeiture of a lease) or merger. (2) Subject to this Regulation, in these Regulations— “transfer” means the transfer of an economic entity which retains its identity; “economic entity” means an organised grouping of resources which has the objective of pursuing an economic activity whether or not that activity is for profit or whether it is central or ancillary to another economic or administrative entity. (3) These Regulations shall apply to public and private undertakings engaged in economic activities whether or not they are operating for gain...” I am satisfied that after hearing the evidence and submissions in this case that the change of ownership arose from the sale of shares in the company. I note that the Complainant had not given evidence that it was otherwise. It has long been established that this type of transfer does not come within the scope of the TUPE Regulations. In these cases, the company remains the employer irrespective of who owns the shares in the company. This is based on the established legal principle that a company is always a separate and independent entity from its shareholders. Therefore, I find that the TUPE Regulations do not apply in this case I find that the complaints under this heading were not well founded. CA-00048865-011 - No notification in writing of a change to terms of employment (Term of Employment {Information) Act 1994 (the 1994 Act). Section 5 of the 1994 Act deals with notification of changes, as follows: (1) Subject to subsection (2), whenever a change is made or occurs in any of the particulars of the statement furnished by an employer under section 3, 4 or 6, the employer shall notify the employee in writing of the nature and date of the change as soon as may be thereafter, but not later than– (a) 1 month after the change takes effect, or (b) where the change is consequent on the employee being required to work outside the State for a period of more than 1 month, the time of the employee's departure. (2) Subsection (1) does not apply in relation to a change occurring in provisions of statutes or instruments made under statute [other than a registered employment agreement or employment regulation order] or of any other laws or of any administrative provisions or collective agreements referred to in the statement given under section 3 or 4. I gathered from the evidence in this case that the Complainant was referring to the cessation of the payment of shift premium after a number of years. Firstly, this section applies to the statement of terms already given under the 1994 Act. The Complainant was employed before the enactment of the 1994 Act, and I note that he did not seek a written contract under section 6, therefore there could not be a change as envisaged under the relevant section if the Complainant was not in possession of the said written terms in the first place. I am satisfied also that the Respondent sought to engage fully with the Complainant, and he was provided with information in writing before the ceasing of the overpayment in September 2021. Therefore, I find that the Complaint was not well founded. CA-00048865-12 Payment of Wages Complaint: The question here is whether the shift premium payment to the Complainant became an implied term in his contract, and if so, whether there was a variation clause that allowed the Respondent to declare that the cessation of the payment did not become an unlawful deduction under the Payment of Wages Act 1991 (the 1991 Act). Section 5 of the 1991 Act provides, in its relevant parts: 5.(1) An employer shall not make a deduction from the wages of an employee (or receive any 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…. … (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 Respondent argued that the Complainant needed to work a shift pattern to qualify for shift allowance. It submitted that this was explicit in the company handbook and therefore the Complainant was never entitled to the payment from the time he commenced day shifts only. The Complainant argued that in circumstances where the disputed shift payment premium was paid to the Complainant for a period of in excess of ten years, and in total twenty-one years, it became a custom and practice and as such an implied term of the contract of employment between the Complainant and the Respondent. The Complainant opened O’Neill v Dunnes Stores PW 44/2005, a Labour Court case where the employer paid an annual bonus to the employees in question for a period of in excess of seven years. The employer then unilaterally removed the said bonus payment. The Court, referring to the practice of paying the bonus which had developed over seven years, noted: “The respondent’s assertion that the bonus ‘was always subject to variation’ is disingenuous and has no merit; it was varied twice, once in 1997 when it was increased, and once in 2004 when the form of payment was unilaterally changed and replaced with the vouchers. But in between it became an established part of the complainants’ contracts of employment as part of their remuneration and protected by the Payment of Wages Act.” The ‘custom and practice’ test was adopted in this jurisdiction by Maguire P in O'Reilly v Irish Press [1937] 71 I.L.T.R 194. Here it was held that the practice must be: - “…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…it is necessary in order to establish a custom of the kind claimed that it be shown that it was so generally known that anyone concerned should have known of it or easily become aware of it.” This definition was re-iterated by the Supreme Court in Noreside Construction Limited v Irish Asphalt Limited [2014] IESC, which was opened by the Complainant. The Complainant gave cogent evidence that a manager, at the time of his promotion to the Quality Assurance team, had agreed with him that instead of extra pay, he could retain his shift premium even though he worked days only. Furthermore, in the exhibited emails between management colleagues in the summer of 2020, it was obvious that, although the Complainant’s receipt of shift premium was an undesirable anomaly, nevertheless there was a recognition that his situation was unique and somewhat problematic to them. There was no suggestion then that he was not contractually entitled to the premium at the time. An implied term is widely established as a term in a contract which has not been expressly stated but which must be implied to give effect to the law or to the presumed intention of the parties. I find as a fact, based on the balance of probabilities, that a senior member of management had agreed the continuation of the shift premium for the Complainant and that this became re-enforced by custom and practice over a period of 20 years with the effect that the payment of shift premium became an implied term in the Complainant’s contract of employment. The Respondent asserted that if it is found that an implied contract term existed prior to September 2021, it was reasonably open to the Respondent to vary such a term and the Respondent did in fact vary such a term by notice in writing to the Complainant issued in June 2021. After this date, the employee did not work shift, nor was accordingly eligible to receive shift rate. The Respondent submitted that as an employee, whose terms and conditions of employment benefited from collective agreements, it is reasonable to expect that any implied conditions could be reasonably varied to bring them in line with the generally understood rules attaching to collective conditions of employment, namely that to be eligible for shift pay, one must be prepared to work shift. Collective agreements ordinarily involve a group of workers whose terms and conditions of employment are collectively bargained for between a trade union and a company, as was the case in this employment for those who were described as ‘direct employees’. However, the evidence strongly suggests that the worker was not a ‘direct’ employee but more an ‘indirect’ employee where he held a rather hybrid unique position where his shift premium payment arrangement was patently not covered by collective agreement. Furthermore, no evidence was given that the Complainant’s position became a matter of issue between the trade union and the Respondent company. Having heard the evidence and submissions on this complaint I am satisfied that no variation clause existed to unilaterally allow the Respondent to alter the Complainant’s implied term to entitlement to shift premium nor did the Respondent give sufficient countervailing evidence to rebut the custom and practice test, as set out in Reilly. I conclude that no implied term existed, nor can be construed, in the Complainant’s contract of employment, or otherwise, to allow the Respondent to authorise the deduction of his shift pay premium, a premium which was properly payable to him. I find that the complaint was well founded. I direct the Respondent to pay the Complainant compensation equivalent to the unlawfully deducted shift premium payment , as calculated on a weekly basis, and backdated from the date of receipt of the Complaint by the Workplace Relations Commission on 25 February 2022 to the first date of deduction of 10 September 2021, after the making of any lawful deductions therefrom. |
Decision:
Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaints in accordance with the relevant redress provisions under Schedule 6 of that Act.
CA-00048865-001 to -009 Transfer of Undertakings Complaints: I find that the complaints were not well founded for the reasons outlined above. CA-00048865-011 - No notification in writing of a change to terms of employment (Term of Employment {Information) Act 1994 (the 1994 Act). I find that the complaint was not well founded for the reasons outlined above. CA-00048865-12 Payment of Wages Complaint: I find that the complaint was well founded. I direct the Respondent to pay the Complainant compensation equivalent to the unlawfully deducted shift premium payment , as calculated on a weekly basis, and backdated from the date of receipt of the Complaint by the Workplace Relations Commission on 25 February 2022 to the first date of deduction of 10 September 2021, after the making of any lawful deductions therefrom. |
Dated: 25th November 2022
Workplace Relations Commission Adjudication Officer: Thomas O'Driscoll
Key Words:
Transfer of Undertakings, Payment of Wages Act 1991, Variation Clause, section 5 of the Terms of Employment (Information) Act 1994. |