Complainant

Respondent

Parties

Ashling  Kempton

Work Web Mayo Limited T/A Employability Mayo

Representatives

Martina Weir SIPTU - Works Rights Centre

 Greg Barry -Employer

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-00047624-001

13/12/2021

This case is concerned with a reduction in the Complainants wages commencing in October 2021 which has continued since then. The complaint was submitted to the WRC on 13 December 2021. The period covered by that complaint (the cognisable period) is therefore any deductions made between 14 June and 13 December 2021. The complainant representative did write to the WRC prior to the hearing stating that a separate complaint was submitted to the WRC covering a further and later cognisable period. Following a search on behalf of the AO, that second referral could not be located within the WRC-as advised to the representative at the hearing.

The amount of the deduction considered in this decision is €30.57 per week for twenty-six weeks or €794.82 net.

The employment operates in what is broadly known as the Community Employment Sector whose budget is funded by the Department of Social Protection.

The Complainant commenced employment as an employment facilitator with the Respondent in October 2016 on a rate of pay of €26210 per annum. In the years which followed, including 2020, she received an annual increment. By February 2021 her gross annual rate of pay had increased to reach point five of the salary scale or €669.12 gross per week (x 52 = €34794 gross per annum). She had moved to point five in October 2020. In February 2021 and without her agreement, the employer reduced her pay back to point four of the pay scale. The only discussion with her prior to the deduction was on 4 February 2021 when she received a phone call from the Respondents witness when he advised of concerns around the budget allocation from the DEASP. That call initially advised her that there may be a difficulty in paying the next increment due in October 2021. Then the possible effects on her increment the previous October was also mentioned. The Complainant had a further conversation on the issue on February 5th and then found the deduction had been made from her payslip on February 11th. When she complained about the deduction, she was told that the full budget sought was not allocated to the Respondent by the DEASP. The complainant complained to the Respondent witness about the cut and noted that she was the only member of staff to experience a cut in her wages.

The terms of Section 5(1) of the Payment of Wages Act 1991 were cited in support of the complaint on the basis that none of the terms of subsections (a) (b) (c) of that Section were in place in February 2021 when the deductions commenced. In addition to the deductions from February 2021, payment of the annual increment which fell due in October 2021 was withheld.

Reference was made to ADJ-00024477 where a similar complaint was upheld by the Adjudication Officer.

The Union in their submission suggested that as the Respondent had made a second budgetary submission to try to achieve approval for the funding, the Respondent must have made an error in their first application for funding.

Mr Greg Barry witness for the Respondent and manager of the employment. In October 2020, the Respondent paid the annual increment which brought the Complainant to point five of the agreed pay scale. That scale was in place since 2008 when it was approved by FAS who were then the funding body and wo the budgetary allocation to the Respondent (and others in the same area of operation entirely depending on such funding). For all years until 2019 following the transfer of the local employment schemes to the DEASP in 2011, the application for funding of staff salaries was based on the rates approved by FAS and this continued. The Complainant would have been informed in person that her pay would increase by increments in accordance with a salary scale. However, as time passed, they began to experience some difficulties in their dealings with the DEASP in achieving the necessary funding for staff salaries. In 2020 they had moved the Complainant to point four of the scale believing that the funding for 2021 would cover the payment of that increment (and the move to the next incremental point due in October 2021). The budget allocation for 2021 did not provide the funds either for the increment paid from October 2020 or the one due in 2021. Representations to the Department officials resulted in a response ’the terms and conditions of staff including remuneration are a matter for the contracting organisation that employs them.’ The Respondent rejigged their budget submission to move elements around from non-pay to be able to continue to pay the agreed rate of pay. It was not a case that the first budget application contained a mistake in relation to the funding sought to pay the salary of the Complainant in full. However, the revised application was rejected which suggests to them that the Department was directly interfering with the budget allocation in relation to the pay to employees-in this case their approval for a budget which would have allowed the increment/s to be paid was rejected-and contrary to their assertion in the email of December 30, 2020, that terms and conditions are (solely) a matter for the employer.

Regarding payments to other members of staff without any cuts, other staff were either already at the top point of the pay scale approved in 2008 and therefor incremental payments did not arise, or one person who had been on a career break was returned to work on her rate of pay before that career break.

Political representations were made to the Minister concerned but to no avail. The response from the relevant Minister on 31 March 2021 was introduced as evidence of their efforts being rejected. That correspondence repeated the position of the Department Officials.

The first aspect to be considered is the contractual one which, among other terms, contains the agreed terms of payment. The wording of that contract in relation to pay is:

‘Your salary will be €26210 per annum (pro Rata) paid weekly……...Pay increases and increments are depending on finding allocation and will be reviewed as necessary.’

As can be seen, there is no salary scale and no absolute commitment to annual increments in the written terms. However, a contract can be written as well as unwritten. And the evidence of the respondent to the hearing is that there was a verbal commitment to the Complainant to pay annual increments. This might be regarded as foolish or reckless given the Respondent is wholly reliant on a third party to provide the finding for their service. However, in making such a commitment, it is evident that the Respondent was not making a contractual commitment which they plucked out of thin air-but one which was based on the document issued to them and those employers providing the same service on FAS headed paper which set out in detail the salary scales to apply to those on the supported employment programme effective 01/03/2008. One of the posts comprehended by that circular was that of Job Coach-the one to which the Complainant was appointed in 2016. The Respondent agreed that the notification in question had almost certainly emerged from a collective agreement discussion with FAS at national level at the time. However, the circular is the only evidence which they could provide to that effect. A conclusion that the Respondent in this instance was neither reckless nor foolish in making a verbal contractual commitment to the Complainant is supported by the first note in the FAS circular:

‘These are the maximum FAS contributions for the above posts.’

That same set of notes contains conditions for appointment on the salary scale, pensions and PRSI. All that has occurred in the interim is that responsibility for payments to those on the supported employment schemes and the rates of funding passed to a Government Department. And that Department in this instance at least is reneging on the commitment to funding not only implied by the FAS circular but which any reasonable person would take from that circular letter. FAS set the rate of pay for the job and they committed to finding up to that level and not beyond. And this one unfortunate Complainant is caught in the middle of the funding shortfall caused directly by the Government Department refusing to recognise the commitment given by their predecessor funding body, FAS. Given the paltry sums involved (except to the Complainant) one really must wonder why a government department finds it necessary to reach down into the salary of one individual to such an extent that they would deny the respondent the funding necessary to comply with the commitments given in 2008 and which operated for many years undisturbed thereafter. The only alternative it would seem open to the Respondent would have been to cut the wages of other staff-and the same matter of contractual breaches and obligations would apply there. The Ministers letter of 31 March 2021 suggesting that the terms of employment are exclusively a matter for the service provider does not sit easily with the reality where all funding is provided by and must be approved by the Ministers Department and that those terms were set by the predecessor organisation at national level some thirteen years prior to the refusal to fund the amount in question.

Notwithstanding any sympathy for the respondent’s predicament, the reduction of wages in February 2021 represents a deduction or payment withheld. The increase paid in October 2020 was in line with the verbal contract with the Complainant, was implemented in line with the FAS circular of 2008 and was therefore properly payable. That deduction was not authorised by any agreement to vary the contracted terms. As such it was unlawful in accordance with section 5 of the Payment of Wages Act 1991 as follows:

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.

The Union is correct in asserting that none of the above terms applied or can be claimed to apply such that they could justify the(unlawful) deduction from the wages of the Complainant commencing in February 2021.

The complaint is well founded. The calculation below is based on the cognisable period as referenced earlier in this text.

‘

Payment of Wages Act 1991 -CA-00047624-001 The complaint made by Ashling Kempton against Work Mayo Ltd. T/A Employability Mayo of unlawful deductions from her wages during the cognisable period is well-founded. The respondent is to pay Ashling Kempton €794.82 nett in respect of those deductions.

Deductions/Reduction in pay without agreement.