Complainant

Respondent

Parties

Éamon Ryan

Carlow County Council

Act

Complaint Reference No.

Date of Receipt

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

CA-00042934-001

08/03/2021

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

CA-00042934-002

08/03/2021

The two complaints which have been submitted under section 27 of the Organisation of Working Time Act (the “OWT Act”) concern the calculation of the complainant’s holiday pay and public holiday pay.  His claim is that he is entitled to have his regular and rostered overtime, an on-call allowance and an eating on site allowance included in the calculation of his holiday pay and public holiday pay.

In July 2018, in response to a query from another employee, an officer in the Council’s HR Department confirmed that regular and rostered overtime should be included in holiday pay.  The change in approach affected around 30 SIPTU members and the issue of retrospection was considered at conciliation meetings at the WRC.  The Council’s proposal on retrospection was rejected and in March 2021, SIPTU submitted individual complaints to the WRC under the OWT Act.  

At this hearing on February 16th 2022, I was informed that regular and rostered overtime is included in holiday pay since October 2021.  The complaints that remain for adjudication concern the number of years for which the unpaid element of holiday pay should be paid retrospectively and the complaint about how pay for public holidays is calculated.

The parties at the hearing also informed me that my colleague, Brian Dalton issued a decision on August 10th 2021, in respect of the same complaints brought by another of the Council’s employees, Mr Eamonn Coughlan[1].  On the date of the hearing of the instant complaint, that decision was under appeal to the Labour Court.  I am now in possession of the determination of the Labour Court, which was issued on July 12th 2022[2].

It is the complainant’s case that the Council is in breach of section 21 of the OWT Act in relation to holiday pay and section 22 in relation to public holiday pay.

In her submission at the hearing, Ms Malone set out the complainant’s history with the Council since he joined in February 2004, his pattern of working regular and rostered overtime and his entitlement to allowances.  Since 2012, the complainant has been working as a driver.  His basic weekly pay is €663.39.  He has an on-call allowance of €80.00 every fifth week and he is paid an eating on site allowance of €1.90 per day.  He receives €148.98 every week in overtime pay.  Calculated on a weekly basis, the complainant’s allowances and overtime amount to €174.60.

In accordance with his contract of employment, the complainant is entitled to 25 days’ annual holidays.  He claims that his holiday pay and public holiday pay should include his overtime and allowances and that he is entitled to retrospection from the date that he commenced with the Council in 2004. 

CA-00042934-001:  Complaint Regarding Pay for Annual Leave

In support of the union’s position, Ms Malone referred to the decision of the Court of Appeal in Northern Ireland in Chief Constable of the Police Service of Northern Ireland and Another v Agnew[3].  Ms Malone said that the outcome of this decision is based on EU law and is applicable here.  She referred to the Court of Appeal’s citation in that decision of Levez v TH Jennings (Harlow Pools) Limited[4], where the Court of Justice of the European Union (CJEU) held that it is for the legal system of the member states of the EU to determine the conditions to ensure the protection of rights conferred on individuals by virtue of the direct effect of EU law.

Statutory Instrument 475 of 1997, the Organisation of Working Time (Determination of Pay for Holidays) Regulations 1997, provides for the calculation of pay for annual leave and public holidays.  Regulation 3, under the heading of “Normal weekly rate of pay,” provides as follows:

(1)  The normal weekly rate of an employee's pay, for the purposes of sections 20 and 23 of the Act (hereafter in this Regulation referred to as the "relevant sections"), shall be determined in accordance with the following provisions of this Regulation.

(2)  If the employee concerned's pay is calculated wholly by reference to a time rate or a fixed rate or salary or any other rate that does not vary in relation to the work done by him or her, the normal weekly rate of his or her pay, for the purposes of the relevant sections, shall be the sum (including any regular bonus or allowance the amount of which does not vary in relation to the work done by the employee but excluding any pay for overtime) that is paid in respect of the normal weekly working hours last worked by the employee before the annual leave (or the portion thereof concerned) commences or, as the case may be, the cesser of employment occurs.

(3)  If the employee concerned's pay is not calculated wholly by reference to any of the matters referred to in paragraph (2) of this Regulation, the normal weekly rate of his or her pay, for the purposes of the relevant sections, shall be the sum that is equal to the average weekly pay (excluding any pay for overtime) of the employee calculated over—

(a) the period of 13 weeks ending immediately before the annual leave (or the portion thereof concerned) commences or, as the case may be, the cesser of employment occurs,

 or

(b) if no time was worked by the employee during that period, over the period of 13 weeks ending on the day on which time was last worked by the employee before the annual leave (or the portion thereof concerned) commences or, as the case may be, the cesser of employment occurs.

Ms Malone claims that Regulation 3(2) applies to the complainant because he is paid at a rate that does not vary in relation to the work that he does.  She argued that the exclusion of any pay for overtime is incompatible with the jurisprudence of the CJEU, which, in Lock v British Gas Trading Limited[5], held that the Regulations of the member states on the calculation of holiday pay cannot impinge on a workers’ right to enjoy economic conditions while on holidays that are comparable to those enjoyed while at work.

Ms Malone argued that overtime is a contractual requirement of the complainant’s working life and that the payment for overtime must be included in the calculation of his holiday and public holiday pay.  She said that the same applies to the eating on site allowance, which is a permanent feature of his contract.  She referred to the decision on the CJEU in Hein v Albert Holzman Gmbh[6] that, “for the duration of the annual leave, remuneration must be maintained and that workers receive their normal remuneration for that period of rest.” 

Ms Malone submitted that the Council accepts that they have under-calculated the complainant’s holiday pay, and that they now argue that retrospection should be limited to two years of the loss.  Referring to the findings in the decision regarding the Police Service of Northern Ireland, she claims that this amounts to me, as the adjudicator being asked “to validate their conduct to unjustly enrich the Council to the detriment of the very purpose of the Directive.”

Ms Malone referred to section 20(3) of the OWT Act, and the provision that,

“Nothing in this section shall prevent an employee and employee from entering into arrangements that are mor favourable to the employee with regard to the times of and the pay in respect of his or her annual leave.”

She argued that the complainant is entitled to 25 days’ holidays and that he is entitled to be paid “normal pay” for all 25 days.  As he claims that he has been underpaid for 25 days every year since the commencement of his employment, to avoid “validating conduct that unjustly enriches the offender,” she said that compensation should include his losses for all 25 days.

CA-00042934-002:  Complaint Regarding Pay for Public Holidays

In her submission, Ms Malone noted that the Council has acknowledged that the way that pay for public holidays was calculated is incorrect and that, in the future, pay for public holidays will be based on one fifth of the complainant’s normal weekly pay, which is €847.49.

Conclusion

It is the complainant’s case that his claim for pay for annual leave and public holidays to be based on his normal weekly pay is that his overtime is intrinsically linked to his tasks and has a degree of permanence.  Ms Malone referred to a decision of the Labour Court in 2019 in Stablefield Limited v Ana Lacramioara Manciu[7] where the Court awarded Ms Manciu €20,000 in response to a finding that, in the full knowledge of her employer, she worked more than the maximum working week.  Ms Malone said that this demonstrates that the Court is prepared to award significant compensation “where there is a conscious breach of an employee’s rights.”  In this regard, she drew my attention to the decision of the CJEU in Von Colson and Karman v Land Nordrhein - Westfalen[8] where the Court held that where a right grounded in European law has been infringed, the redress must not only compensate for economic loss, but must be a deterrent against future infractions.

In his submission, Mr Hunt of the LGMA referred to the efforts made by the Council to resolve the dispute regarding retrospection and the terms offered which were rejected by the union.  He said that, as a statutory claim has been submitted under the OWT Act, the offer of retrospection which was made under the Industrial Relations Act 1969 is withdrawn.

CA-00042934-001:  Complaint Regarding Pay for Annual Leave

Mr Hunt referred to Article 7 of EU Directive 2003/88 concerning certain aspects of the organisation of working time, which provides for an entitlement to four weeks’ annual leave.  He also referred to section 19(1) of the OWT Act which, contingent on an employee having worked for at least 1,365 hours in a leave year, provides for an entitlement to annual leave of four working weeks.  Section 20(2) of the OWT Act provides that, in respect of annual leave, an employee must be paid “at the normal weekly rate.”  We know from the complainant’s submission that the normal weekly rate of pay is determined by SI 475/1997, the Organisation of Working Time (Determination of Pay for Holidays) Regulations, repeated at page 3 above.  Referring to the decision of the CJEU in British Airways Plc v Williams and Others[9], Mr Hunt argued that it is for the Council to assess the performance of the tasks that the complainant is required to carry out under his contract of employment.  While the Council accepts that the payment in question is made regularly, the overtime is not rostered or compulsory and the onus is on the complainant to prove the contrary.

Regarding the claim for retrospection, Mr Hunt argued that the time limit is set out at section 27(4) of the OWT Act and section 41(6) of the Workplace Relations Act and that I, as the adjudicator of this matter, cannot entertain a complaint that has been submitted more than six months after the contravention which is complained about.

Considering the calculation of holiday pay, Mr Hunt submitted that Article 7 of the Directive 2003/88 on working time leaves it to the legislature in each member state to determine the conditions of entitlement to paid holidays, the basis on which payment is calculated and the level of payment.  In Ireland, the 1997 Regulations address these matters.  There is no ambiguity in the language of the Regulations which specifically exclude overtime from holiday pay.

Mr Hunt referred to nine decisions of the Labour Court regarding holiday pay and the inclusion of pay for overtime[10].  He said that all of these cases were submitted under the Industrial Relations Act and it is open to the parties in each case to accept or reject the Court’s recommendations.  He also said that the outcomes comprise a recommendation on the principle issue and do not address the issue of retrospection.  Referring to the only case which was considered under the OWT Act, that of MCM Security Limited and Tom Power[11], the Labour Court determined in that case that the failure to include regular and rostered overtime in the calculation of holiday pay cannot give rise to a complaint under the OWT Act.

In his submission, Mr Hunt referred to the objective of the CJEU case law which was cited by the union which he said has the specific objective of ensuring that there is no serious risk that a worker will not take his or her holidays.  He said that the complainant has always availed of his leave and that what is being sought is compensation by paying him for an opportunity that he has not missed.

Mr Hunt argued that, while the case law of the CJEU represents a settled view expressed by that Court regarding the meaning of Article 7, the decisions themselves are limited to the facts of individual cases and do not support the proposition that the complainant should be compensated for every period of leave he has taken since he joined the Council in 2004.  He said that each case is predicated on the national law of the member state as it relates to the implementation of the Directive and that must be the starting point in this instance.  

CA-00042934-002:  Complaint Regarding Pay for Public Holidays

Section 21 of the OWT sets out the entitlement to public holidays:

(1) Subject to the provisions of this section, an employee shall, in respect of a public holiday, be entitled to whichever one of the following his or her employer determines, namely -

(a) a paid day off on that day,

(b) a paid day off within a month of that day,

(c) an additional day of annual leave,

(d) an additional day’s pay[.]

The relevant provision regarding pay for public holidays is set out at Regulation 5(1) of SI 475/1997:

(1)   If the employee concerned works or is normally required to work during any part of the day which is a public holiday, then—

(a)  in case the employee's pay is calculated wholly by reference to any of the matters referred to in Regulation 3(2) of these Regulations, the relevant rate in respect of that public holiday shall be the sum that is equal to the sum (including any regular bonus or allowance the amount of which does not vary in relation to the work done by the employee but excluding any pay for overtime) paid to the employee in respect of the normal Daily hours last worked by him or her before that public holiday,

(b)  in any other case, the relevant rate in respect of that public holiday shall be the sum that is equal to the average Daily pay (excluding any pay for overtime) of the employee calculated over—

(i)  the period of 13 weeks ending immediately before that public holiday, or

(ii)  if no time was worked by the employee during that period, the period of 13 weeks ending on the day on which time was last worked by the employee before that public holiday.

The Council’s position is that the complainant has been paid for public holidays in accordance with the provisions of the OWT Act and in accordance with the Regulations regarding public holiday pay in SI 475/1997.  No evidence has been presented to show that the legislation has been contravened.

Conclusion

It is the Council’s position that, in the absence of any operative date of complaint, the claim for the inclusion of overtime in public holiday pay is outside the time limit for submitting a complaint.  Also, no CJEU case law exists on the issue of public holidays and the Court has not determined that public holidays are comprehended by the Directive 2003/88 on the organisation of working time.

In my consideration of these complaints, I must take account of the determination of the Labour Court in respect of the appeal of Carlow County Council against the August 2021 decision of the adjudicator in Eamon Coughlan and Carlow Council (footnote 2).  The facts are the same in this case and the respondent is also Carlow County Council.

CA-00042934-001:  Complaint Regarding Pay for Annual Leave

The complainant is contractually entitled to 25 days’ annual leave.  The Court found that it had no jurisdiction regarding annual leave in excess of the statutory entitlement of 20 days provided for at section 19 of the OWT Act.

Considering the issue of pay for annual leave, the Court held that Regulation 3(2) of the Organisation of Working Time (Determination of Pay for Holidays) Regulations 1997 “expressly and unambiguously excludes overtime from the calculation of annual leave.”  The Court cited its previous findings in MCM Security Limited and Tom Power (footnote 11) where it was stated that,

“It is clear from the wording of Regulation 3(2) and Regulation 5(1) that payment in respect of overtime is not reckonable in the calculation of pay for either annual leave and public holidays.”

Accepting that Mr Power’s normal weekly pay comprised 39 hours at the standard rate and six hours of overtime, the Court determined that, in accordance with Regulation 3(2), the overtime element was not reckonable and his claim for the inclusion of overtime pay in his holiday pay could not succeed.

Considering the complaint of Mr Coughlan against Carlow County Council regarding the inclusion of the eating on site allowance and the on-call allowance in holiday pay, the Court noted that the eating on site allowance is not treated as pay for taxation purposes.  The on-call allowance is payable when the complainant is available for on-call duty for six pre-determined weeks per year.

Concluding its determination in respect of Mr Coughlan’s complaint, the Court found that his claim that regular and rostered overtime should be included in the calculation of his pay for annual leave had not been made out.

Taking my authority from the Labour Court’s decisions in MCM Security and in Coughlan and Carlow County Council, I must find that the complainant’s claim that his regular and rostered overtime and his allowances should be included in his holiday pay is not in accordance with the provisions of Regulation 3(2) of SI 475/1997 and cannot succeed.  It follows from this that his claim for a retrospective payment also cannot succeed.  

CA-00042934-002:  Complaint Regarding Pay for Public Holidays

Regulation 5 of SI 475/1997 addresses the calculation of pay for public holidays:

(1)   If the employee concerned works or is normally required to work during any part of the day which is a public holiday, then—

(a) in case the employee's pay is calculated wholly by reference to any of the matters referred to in Regulation 3(2) of these Regulations, the relevant rate in respect of that public holiday shall be the sum that is equal to the sum (including any regular bonus or allowance the amount of which does not vary in relation to the work done by the employee but excluding any pay for overtime) paid to the employee in respect of the normal Daily hours last worked by him or her before that public holiday[.]

Sub-section (b) is not relevant to the case under consideration here.

The findings in MCM Security are relevant with regard to the complainant’s claim that his pay for public holidays should be based on his “normal weekly pay” as the Court found that overtime is not reckonable in the calculation of pay for public holidays.

Based on the Court’s findings in Coughlan, I find that the eating on site allowance and the on-call allowance are also not reckonable in the calculation of public holiday pay.  It follows that the claim for retrospection cannot succeed.

CA-00042934-001:  Complaint Regarding Pay for Annual Leave

I decide that the complainant’s claim for inclusion of regular and rostered overtime and allowances in his holiday pay is not well founded.

CA-00042934-002:  Complaint Regarding Pay for Public Holidays

I decide that the complainant’s claim for inclusion of regular and rostered overtime and allowances in his public holiday pay is not well founded.

Overtime, allowances, holiday pay, public holiday pay