Complainant

Respondent

Parties

Michele  Hanley

Board Of Management,  Scoil Mhuire gan Smál

Representatives

Mr. Colin Hanley,  Employee Representative

Mr. L Maule, Solicitor of Mason Hayes & Curran

Act

Complaint/Dispute Reference No.

Date of Receipt

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

CA-00046570-001

06/10/2021

The issuein contention concerns a Primary School Secretary, employed since January 2004, and her rate of pay or more directly the correct basis of her rate. At the time of the hearing, she was paid      € 551.91 for a 28-hour week. She remains in employment with the Respondent School.

It is important to note that she is a direct employee of the School and not an employee of the Department of Education and Skills.

The Complainant made a written submission and gave Oral evidence.

In summary her case was that she had worked without any issues and very happily for the school in question for many years. In September 2018 she negotiated a wage increase of 2.5% with the Board and again a further increase of 7.5% in October 2018.

In September 2020 she became aware of Department of Education circulars increasing the rates of pay of School Secretaries. This followed a National level Arbitration award. The Dept Circulars granted 4 pay increases of 2.5% beginning from 1st January 2016, 1st April 2017, 1st April 2018 and 1st January 2019. She applied to have these increases applied to her rates of pay.

The Board of Management declined and referred to the Departmental rates of pay which they applied retrospectively to her salary and there by effectively negating the two local increases.

The Complainant maintained strongly that she had agreed a rate of pay with the Board. This was legally binding. Any Departmental sanctioned increases had to be applied to her rates post the local rate increases.

Various local initiatives seeking to resolve the matters in dispute were attempted but failed to achieve any result. The Complainant had made numerous efforts to meet the entire Board to plead her case but had been unsuccessful. 

The Board had a number of opportunities to seek additional funding from the Department of Ed & S to cover her increases via the Ancillary Services Grant but had declined to do so.

The entire process became protracted, and the health and general wellbeing of the Complainant has been negatively impacted upon by the lengthy process.

In summary her claim was to have the Departmental increases applied to her negotiated and agreed Salary at the date of Circular implementation.

The Respondent made a detailed written Submission and gave Oral evidence from Mr. L, the Chairperson and Ms. G, the Treasurer. Both were available for cross examination.

The Respondent School is funded by the Department of Education. As regards Secretarial staff and Caretaker staff the School receives an Ancillary Services Grant out of which salaries are paid.

The former Principal, Ms. M, unfortunately not available for direct evidence, quite possible misinterpreted Department Circular 75/2015 – (granting an increase of 2.5% in Secretary Salaries) – as not being applicable to the Complainant. The Complainant’s Salary at the time was comfortably in advance of the National Minimum Wage. The then Principal, Ms. M, it is believed, considered that the Circular only applied to staff on the minimum wage.

As set out by the Complainant local increases of 2.5% and 7.5% were agreed by the Board in April 2018 and September 2018.

In December 2020 the Board became aware of the Department of Education circulars covering the period in question back to 2016 and applied the Departmental rates of pay. This resulted in an arrears adjustment of €3,015 (paid December 2020). The rate of pay on the 1st January 2021 was €551.91 (Dept Rates applied) as opposed to the by then hypothetical “Local” rate of €550.00.

It was also pointed out that there is no statutory or Dept Circular provision to seek funding for any increases as suggested by the Complainant.

In detailed Legal arguments the Respondent Solicitor argued that what was at issue was Section 5 of the Payment of Wages Act. 1991. Section 5 provides for “Deductionsin Wages”. No deductions arose in this case. The Act does not provide for situations where a Complainant is arguing, as in this case, for the application of a new, effectively, higher rate of pay. 

The key legal issue is the rate of pay “Properly Payable” as per Section 5 of the Act. The rate of pay in this case was always the rate “properly payable”. Local misunderstandings may have arisen over dates of implementations and confusions with Departmental Circulars, but the final bottom line was that the correct rate was eventually paid with arrears. The Complainant cannot seek to have her local arrangements treated as some form of special case to create an exceptional Rate of Pay to which the Departmental increases should apply in addition to the Local increases.

Extensive reference was made to the High Court cases of Mark Balans v Tesco [2020] IEHC 55 and Babianskas v Firstglass Ltd [2016] IEHC 598 where the issue of Sections 4 & 5 of the Payment of Wages Act,1991 were extensively discussed.

The Oral evidence from the Chairman of the Board of Management, Mr. L, was clear cut. The School relied on the Ancillary Services Grant to pay Secretarial wages. The Complainant’s Salary effectively represented some 46% of the grant. The Board had always and still do value the major contribution of the Complainant but can only operate within existing funding and Departmental regulations. A misunderstanding by the former Principal and the subsequent local increases were all done in absolute good faith by the Board. The situation was immediately regularised when new Departmental information came to hand.

The Boards Legal representative, in closing again pointed to the Time Limits issue as limiting the jurisdiction of the Adjudication Officer.

3:1         Applicable Law – Payment of Wages Act,1991 -Section Five

The key issues in this case are covered by Section 5 (6) of the Act quoted below.

(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.

(Highlight/Undeline by Adjudication Officer)

Firstly and in simple terms what were the “Properly Payable” wages -the rates agreed privately by the Complainant with the Board on the of April 2018 & September 2018 or the  Departmental Rates issue by Circular ?.

Secondly and referencing the entire Payment of Wages Act ,1991 does the Act make any provision for circumstances where a Complainant is seeking to have a rate of pay determined that is in excess of what is actually being paid i.e., effectively seeking a Wage increase.

3:1:1           The “Proper” rate of Pay

Much reliance was placed by the Respondents on High Court cases Mark Balans v Tesco [2020] IEHC 55 and Babianskas v Firstglass Ltd [2016] IEHC 598.

In the Babianskas case the Complainant had a contractual written rate of pay in excess of what he was actually paid and in the Balans case the question of the applicability of the rate to certain Unsocial hours on Saturday mornings was at issue -what was the rate Properly Payable in both cases.

The present case is somewhat complicated by the fact that the Complainant was a direct employee of the Board of Management as opposed to a “civil servant”, (as some of her colleagues in other Schools were,) employed directly by the Department of Education and Science.

In theory it can be argued, as was argued by the Complainant, that the rates agreed in April and September 2018 were a contractual obligation on the Board of Management. They were, it was argued, the Properly Payable rates to which the % increases should have applied.

This then gives rise to the question as to how the Departmental salary increase circulars were to be treated. In theory they could have been ignored as the Complainant had a “private contractual” arrangement.  This would have given rise to a quite ambiguous situation of an employment position, a School Secretary, being financed by Public Funds -the Ancillary Services Grant but outside of Departmental governance as regards the rate of pay.  Accordingly ignoring the % increases was not an option for the Board.

Closely reading both Mark Balans v Tesco [2020] IEHC 55 and Babianskas v Firstglass Ltd [2016] IEHC 598 it wasclear that the learned Justices were not oblivious in their discussions and findings to actual practicalities on the ground. The same has to apply here.

For good Public Policy reasons, the Rates of Pay of School Secretaries are determined in collective Bargaining at Central level. Secretaries, not directly employed by the Department, whose renumeration is financed by the Department via the Ancillary Services Grant, inevitably follow the Departmental Salaries schedules. In this case the synchronisation may have got out of step by the well-intentioned local increases allowed in April and September 2018. The actions of the Board of Management in re-establishing what could be called the “synchronisation” including paying arrears of pay were proper. It clearly established that the Properly Payable rate as regards Section 5 of the Act was the Departmental sanctioned rate.

In addition, it would have been completely anomalous to apply the Departmental increases in addition to the local increases in a situation where the only source of funding was the Ancillary Services Grant. In theory the Board could have done this, but it would have required the Board raising supplementary funding, for example, extra Parental contributions etc outside of the AS Grant. This was clearly not possible.

As regards the arguments that the Board could have applied to the Department for additional funding to cover the Complainant close reading of Departmental Circulars over a number  of years  indicates that supplemental funding  is designed to cover Schools were the Secretaries are below the current minimum wages -clearly not the case in this situation.

Accordingly, the Adjudication conclusion has to be that the rate “Properly Payable” has to be the Departmental Rate and in this case the argument for using the private rate as the basis for the Departmental increases has not got a proper legal or pragmatic foundation.

3:1:2         The Payment of Wages Act ,1991 – “Deductions” as opposed to claims for Wage Rates allegedly Properly Payable but higher than the actual rate being paid.

Legal precedent and learned opinion is that the Payment of Wages Act, 1991 is designed to address situations where an employee has been left short – i.e., suffered a deduction not a situation where an employee fell that they are being left short by the failure of an employer to pay a wage increase.

This point was discussed, obliquely, in Mark Balans v Tesco [2020] IEHC 55.  There the Complainant sought premium hours for a Saturday morning shift. The Court did not agree with this interpretation.

On balance and from a careful reading of the Act the argument has to be made that this argument regarding deductions, only ,from wages has merit.

If an argument is made that “Wages promised in excess of what is, at the time deemed to be Properly payable” and is commonly accepted then the Act would have a remit that is not seen in actual practice. Wage increases beyond what is Properly Payable are an Industrial Relations matter not a Payment of Wages Act,1991 matter.

3:1:3        Time limits

The essence of this complaint covers a period from 2016 to 2020. The complaint was lodged on the 16th October 2021. The Complainant alleges that the Departmental increases should have been paid on the 18th December 2020. This requires the Adjudication Officer to grant a six-month extension to the original six-month reckonable period beginning on the 18th December 2021.  The Complainant argued that due to Covid and a generally dilatory approach from the Board to requested meetings she had sound cause for an extension. On balance the extension sought can be granted.

3:2           Overall Adjudication conclusion

As set out above the view has to be that the rate of increases for the purposes of the Act was that determined by the Department of Education. Applying these % increases determined the rate Properly Payable. The actions of the Board in this case, effectively adjusting the rates of pay to synchronise with the Departmental % increase circulars was correct

If the School wished to base further % increases, (the claim from the Complainant) in addition, to the Departmental % rates this would be outside the Ancillary Services Grant.

From all the submission and oral evidence this was a financially impossible task for the Board.

Accordingly, having reviewed the Evidence, the Written Submissions and the High Court case law referenced , the “Properly Payable” rate in this case was the Department Rate and Departmental % increases.

Furthermore as stated above the Payment of Wages Act, 1991, Section 5 , is for Deductions and is not a means to secure increases.

On all these grounds the complaint under the Payment of Wages Act,1991 has to fail.

Payment of Wages Act, 1991, Properly Payable -definition of. School Secretary rates of pay.