FULL RECOMMENDATION
SECTION 7(1), PAYMENT OF WAGES ACT, 1991 PARTIES : BIDVEST NOONAN (ROI) LIMITED (REPRESENTED BY MANAGEMENT SUPPORT SERVICES (IRELAND) LIMITED) - AND - AIJA LAPSA (REPRESENTED BY MR. DONAL O'RIORDAN BL INSTRUCTED BY W & E BRADSHAW, SOLICITORS) DIVISION :
SUBJECT: 1.Appeal of Adjudication Officer Decision No(s) ADJ-00014764 CA-00018935-001. Ms. Lapsa, ‘the Complainant’, was an employee of ISS Facilities Ltd. in 2010 when a transfer of undertakings arose and, as a result, she became an employee of Bidvest Noonan Ltd., ‘the Respondent’. At the time of transfer, the Complainant was in receipt of an hourly rate of pay in excess of the rate provided for in the industry Employment Regulation Order, (ERO). The Complainant contends that her rights under the Payment of Wages Act, 1991 have been breached by the failure of the Respondent to increase her pay in line with increases in the ERO rate. This complaint was upheld by an Adjudication Officer, (AO), who directed that the Respondent pay hourly increases from 5 November 2017 to 4 May 2018 and further increases from 1 December 2017 to 4 May 2018. The Respondent appealed to this Court. Summary of Respondent arguments. The facts of this case are identical to a number of cases heard by the Court already. In Determination No. PWD218 the Court determined, on identical facts, that the Complainant’s rights had not been breached and an identical outcome is sought. The Complainant transferred to the employment in 2010 while in receipt of an hourly rate of €10.98 per hour, which was in excess of the ERO rate of €9.50 per hour. The rate of pay was not linked to the ERO rate and there is no contractual entitlement for the Complainant’s rate of pay to be increased in line with the ERO rate. Her pay was maintained above the ERO rate until such time as that rate applied to her, at which time she became entitled to have ERO rate increases applied to her pay. She had no entitlement to the ERO increases prior to that. In the alternative, if there ever was a contractual link to ERO rates, which is not accepted, this was severed when Joint Labour Committees were declared to be unconstitutional . The fact that twice, in a period of employment in which there have been six EROs, the previous employer increased rates in line with the ERO increases, does not create a contractual entitlement. Memos sent by payroll administration and a site manager do not constitute agreement to increases the Complainant’s rate of pay in line with ERO increases. The employment is unionised and, if it was intended that this would be agreed, this agreement would have been effected through collective bargaining. In PWD218, the Court held, on identical facts, that the two memos did not create an entitlement to the application of ERO increases. The facts of this case are identical, the claim forms submitted are identical and the law must apply in the same manner. Summary of Complainant arguments. The Respondent made unlawful deductions from the Complainant’s pay in failing to pay what she was owed in the application of ERO increases in 2015 and 2016. Her claim was submitted on 4 May 2018 and the cognisable period is 5 November 2017 to 4 May 2018. In accordance with HSE v John McDermott (2014) IEHC 331, the complaint relates to every distinct and separate breach in this period. Unlawful deductions were made on or about 1 December 2017. Therefore, the complaint was submitted in time. In 2004 and 2007, the then employer wrote to staff to advise that their rates of pay were being increased in line with increases in ERO rates. There is, therefore, a relativity and contractual nexus between increases in the Complainant’s pay and ERO increases, notwithstanding that her rate was above the base ERO rate. Further, the custom and practice established by ISS amounts to the creation of an implied contractual term. In Albion Automotive Ltd. v. Walker (2002) EWCA Civ 946, the Court of Appeal of England and Wales listed the relevant factors for determining if a term is an implied term, as follows; 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 employers intended to be contractually bound f) Whether the policy was adopted by agreement g) Whether the 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 previous employer adopted a policy of applying ERO increases, this policy was drawn to the Complainant’s attention, was followed without exception for a period, was communicated to the Complainant in a manner that suggested an intention to be bound and the policy was applied consistently. The payment of ERO increases was an implied term of the Complainant’s contract. Witness Evidence Ms. Aija Lapsa. Ms. Lapsa is the Complainant. The witness gave evidence that she commenced working for ISS Facilities Ltd in 2005. Between then and 2010, her pay was increased a number of times, reaching €10.98 per hour. Increases were applied to all her colleagues and herself. At the end of April 2010, at a general meeting, staff were promised that, when ownership of the company changed, their terms and conditions would not be affected. However, the Respondent had not applied increases to her or to some other colleagues, as a result of which her pay did not increase for 10 years, despite increases in the cost of living. Other colleagues who joined the employment later received pay increases. The witness told the Court that she believed this to be unfair and this had prompted her to make the complaint. In cross examination, it was clarified that the meeting concerned had been with the previous employer. The applicable law. Payment of Wages Act, 1991. 1. Interpretation “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, and (b) any sum payable to the employee upon the termination by the employer of his contract of employment 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: Regulation of certain deductions made and payments received by employers. 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. (2) An employer shall not make a deduction from the wages of an employee in respect of— (a) any act or omission of the employee, or (b) any goods or services supplied to or provided for the employee by the employer the supply or provision of which is necessary to the employment, unless— (i) the deduction is required or authorised to be made by virtue of a term (whether express or implied and, if express, whether oral or in writing) of the contract of employment made between the employer and the employee, and (ii) the deduction is of an amount that is fair and reasonable having regard to all the circumstances (including the amount of the wages of the employee), and (iii) before the time of the act or omission or the provision of the goods or services, the employee has been furnished with— (I) in case the term referred to in subparagraph (i) is in writing, a copy thereof, (II) in any other case, notice in writing of the existence and effect of the term, and (iv) in case the deduction is in respect of an act or omission of the employee, the employee has been furnished, at least one week before the making of the deduction, with particulars in writing of the act or omission and the amount of the deduction, and (v) in case the deduction is in respect of compensation for loss or damage sustained by the employer as a result of an act or omission of the employee, the deduction is of an amount not exceeding the amount of the loss or the cost of the damage, and (vi) in case the deduction is in respect of goods or services supplied or provided as aforesaid, the deduction is ofan amount not exceeding the cost to the employer of the goods or services, and (vii) the deduction or, if the total amount payable to the employer by the employee in respect of the act or omission or the goods or services is to be so paid by means of more than one deduction from the wages of the employee, the first such deduction is made not later than 6 months after the act or omission becomes known to the employer or, as the case may be, after the provision of the goods or services. Deliberation. The Complainant is one of a number of complainants who have made identical complaints against the Respondent under the Act. The Court has issued a number of determinations based on the same facts, none of which upheld the complaint that there was a contractual entitlement for ERO increases to be applied. As the Respondent noted, the Court set out its reasoning in detail, in particular in Determination PWD218. In the instant case, the Complainant has drawn the attention of the Court to the tests that were determined in a case in the UK to be applicable in assessing whether a term is an implied term of contract. These are set out in the summary above of the Complainant’s arguments This case was not argued as relevant to the Court in any of the previous cases on which the Court has issued determinations on these same facts and it is, therefore, necessary for the Court to consider the relevance of that case to the facts of the instant case, in order to determine if the instant case should be distinguished from previous determinations on these matters. In this regard, the Court notes that the Complainant is in this employment since 2005. In the intervening period, there have been six EROs. On two occasions, when EROs were introduced, the Complainant’s rate of pay was increased in line with the ERO increases. On four occasions, the ERO increases were not applied. In looking at the criteria suggested in ‘Albion Automotive Ltd.’, it is clear to the Court that it could not be said that the policy of applying ERO increases was followed for a substantial period, that it could not be argued logically that a contractual right was acquired due to the number of occasions on which the policy was followed, (two out of a potential six occasions), that payments were not automatic or that the policy was consistently applied. It is highly arguable that the nature of the relevant communications could be taken to suggest any intention of the employer to be bound. There is no written agreement to the policy, which is notable in an employment in which there is collective bargaining and there is no indication that the policy was ever agreed. If anything, therefore, the application of these criteria strengthen the Court in its view that there was no contractual obligation on the Respondent to apply ERO increases to the Complainant, in circumstances where her pay exceeded the appropriate ERO rate. There is no contractual term, implied or otherwise, that entitles the Complainant to make a valid complaint under the Act. In the case of Sullivan v. Department of Education (1998) 9ELR217, it was determined that ‘payable’ as set out in s.1 of the Act, see above, means ‘properly payable’ and that the prohibition on deductions set out in s.5, see above, arises only in respect of deductions from what is properly payable. As the Court determines that there is no obligation under the Act for the Respondent to apply the ERO increases then, consistent with the reasoning set out in PWD218 and other cases determined on the same facts, the Respondent cannot be held to have made an unlawful deduction in making the choice not to apply those increases and, accordingly, no breach of the Act has occurred. The argument made by the Complainant herself, about what she perceives as the unfairness of a situation in which she received no pay increases for some time, is not a matter that can be rectified by an incorrect application of the Act and, as such, is not a matter on which it would be appropriate for the Court to comment. Determination The Decision of the Adjudication Officer is overturned.
NOTE Enquiries concerning this Determination should be addressed to Therese Hickey, Court Secretary. |
