ADJUDICATION OFFICER DECISION

Adjudication Reference:  ADJ-00044419

Parties:

Complaint:

Date of Adjudication Hearing:  22/11/2023

Workplace Relations Commission Adjudication Officer:  Gaye Cunningham

Procedure:

In accordance with Section 41 of the Workplace Relations Act, 2015 following the referral of the complaint to me by the Director General, I inquired into the complaint and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint.

Background:

The complaint is that the Respondent withheld payment of a bonus when the Complainant resigned his employment.  A preliminary issue was raised regarding the submission of the complaint and time limits.   The representative of the Respondent stated that the complaint in this instant case was referred to the WRC on 09/02/2023 and was clearly out of time.

Summary of Complainant’s Case:

The Complainant submitted a form to the WRC on 24/08/2022 in which he ticked a box in error requesting the matter be referred to the Inspectorate Division of the WRC.  It was only in February 2023 he realised the error when he enquired of the WRC when his complaint would be heard.  The Complainant’s representative requests that the ‘slip rule’ should apply where a minor or administrative error occurs, the Adjudication Officer has discretion and that the matter be heard. 

The Complainant’s original complaint was submitted to the WRC on 24 August 2022 and an acknowledgement was received under reference CA-00052384.  This form had a ‘ticked box’ in which a tick was made seeking redress option as inspection by a WRC Inspector.  This was incorrectly placed rather than the box which refers the complaint to the Adjudications Services.  When the Complainant’s solicitor became aware that the matter could not be transferred to Adjudication, it was requested that another application form be lodged.  This form was lodged on 9th February 2023 without prejudice to the fact that the first application form was valid and was lodged on time.  It is submitted that the inadvertent lodgement should not deprive the employee of a remedy.  It is argued that it would be fundamentally damaging if the Complainant is not permitted to seek properly earned remuneration and the Respondent would not be prejudiced.

In relation to the substantive case, it is submitted:

The Complainant’s contract of employment contains a clause which relates to “Bonus”.  This requires the employee to meet or exceed targets set on an ongoing basis, which the Complainant has achieved.  Nowhere throughout the contract does it state that payment of the bonus is dependent upon the employee being an employee on the date of the payment of the bonus.

No element of the bonus is described as discretionary.  It is a fundamental element of the contractual terms that once an employee meets or exceeds the targets then they are absolutely entitled to be paid the remuneration. 

At its most straightforward, the Complainant asks the Adjudicator as a matter of interpretation, to decide if the wording of the contract confirms that once the targets agreed with the employee are reached, does the remuneration thus earned as part of the incentive remuneration automatically become payable to the employee.  There is no disagreement as to whether the employee was an employee.  There is no disagreement as to whether there was a bonus payable for the year.  The only disagreement is whether the bonus was discretionary. 

Summary of Respondent’s Case:

In his claim form to the WRC, the Complainant is alleging that the Respondent did not pay him monies owed for sales made in the calendar year ending 2021. The Complainant also references CA – 00052384, which does not form part of the Complaint before the Adjudication Officer.

A preliminary issue arises regarding the time limits provided for filing claims at the WRC in the relevant legislation. This complaint was submitted to the WRC on 09 February 2023 and therefore the cognizable time period for this complaint, as provided in the Payment of Wages Act, 1997 is between 10 August 2022 and 09 February 2023. Furthermore, it must be acknowledged that the Complainant has legal representation, who would have been adequately equipped with the knowledge of the dispute resolution mechanisms provided by the Workplace Relations Commission and the relevant time limits as provided for in each separate Act.

The Payment of Wages Act, 1991.

Section 6 provides:

 - 4) A rights commissioner shall not entertain a complaint under this section unless it is presented to him within the period of 6 months beginning on the date of the contravention to which the complaint relates or (in a case where the rights commissioner is satisfied that exceptional circumstances prevented the presentation of the complaint within the period aforesaid) such further period not exceeding 6 months as the rights commissioner considers reasonable.

As outlined in the Complainant’s complaint form, he alleges that he was expecting the payment to be made in March 2022 meaning that this complaint has been submitted approximately 5 months out of time and the Respondent submits that any justification afforded does not meet the exceptional circumstances as established in relevant case law.

In Correspondence to the WRC, the Complainant’s representative discusses CA – 00052384 and the WRC has confirmed that the redress sought for that Complaint was WRC Inspection and as such, it was forwarded to the inspectorate division at the request of the Complainant.

The Respondent wishes the draw the Adjudication Officers attention to the position outlined by the High Court in Minister for Finance V CPSU and others, 2007 which found that ‘’The Court is of the view that it is a fundamental principle that ignorance of one’s legal rights and responsibilities does not provide a justifiable excuse for a failure to bring a claim in time or to the appropriate body’’. The Respondent submits that in this instance, the Adjudication Services of the WRC, are the appropriate body and as outlined in the aforementioned WRC correspondence, CA – 00052384 was addressed to the WRC Inspectorate services once it had been received. The Respondent requests that the Adjudicator deal with the preliminary matter first and foremost and reach a conclusion on same before deciding whether the substantive complaint under the Payment of Wages Act, 1991 should be heard. There is jurisprudence which suggests that the Adjudicator is precluded by law from holding a substantive hearing until a decision on the preliminary matter is reached.

The Respondent would respectfully request that the Adjudicator reach a determination, first and foremost, on this preliminary issue. In the case of Bus Eireann v SIPTU PTD048/2004, the Labour Court indicated that a preliminary point should be determined separately from other issues arising in a case ‘where it could lead to considerable savings in both time and expense’ and where the point was ‘a question of pure law where no evidence was needed and where no further information was required referencing the judgement of O’Higgins J. in Tara Exploration & Development Company Limited v Minister for Industry & Commerce [1975] IR 242. In the case of Employee v Employer UD969/2009, the Employment Appeals Tribunal was asked to decide on a preliminary matter first before moving to hearing the substantive case.  Given the significant preliminary points raised, the Tribunal moved to hear the preliminary matter first and reach a decision on same.

Background

In August 2007, the Complainant commenced his employment with the Respondent. He was then promoted to a role of a Fresh Food Supervisor on 30.03.2015 and subsequently, was successful at securing a role of Business Development Manager on 13 August 2018. The Complainant commenced his role as a Business Development Manager with the Respondent on 13 August 2018 and resigned effective from 10 January 2022. A copy of his Contract of Employment and Resignation Letter have been provided.

After the Complainant submitted his resignation, he queried if he would be eligible for the bonus with his Line Manager Mr. F verbally, who contacted Ms. H to confirm that the Complainant would not be eligible for any bonus paid post the cessation of his employment as per the bonus rules.

On 14 January 2022, the Complainant emailed Ms. H a query regarding a bonus payment. This email substantiates that although the Complainant did not agree with the methodology or eligibility criteria used by the Respondent, prior to the cessation of his employment with the Respondent he was explicitly aware that he would not be eligible for any bonus payment made following his resignation date. On 21 January 2022, Ms H replied to confirm that ‘’ a bonus is a discretionary payment awarded to colleagues who are still on the payroll when the bonus is determined and paid, which usually happens in April’’.

Section 5 (6) of the Payment of Wages Act, 1991 provides:

- “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, […] then […] the amount of the deficiency […] shall be treated as a deduction made by the employer from the wages of the employee on the occasion”.

Thus, the important element to establish is what were the wages “properly payable” to the employee on “that occasion”. The Respondent contends that the wages “properly payable” to the Complainant have been paid and that the Complainant was explicitly aware that he would not be paid any bonus prior to his resignation as outlined in his correspondence of 14 January 2022 when he describes it as an ‘’annual bonus that I will not be paid’’.

Without prejudice to the Respondent’s position that this complaint is out of time, upon tendering his resignation, the Complainant was advised by Mr. F, the Complainant’s Line Manager and Ms. H, Head of HR, advised him that he wouldn’t be eligible for the bonus payment as he would no longer be an employee at the time of bonus payment. Additionally, as it was a discretionary payment and as provided for in the Complainant’s contract of employment subject to ‘’change in line with the needs of the business each year’’, the Respondent was contractually entitled to change the scheme based on the needs of the business and submits that any sanctioned bonus has only ever been paid to employees still in employment on the date of the bonus payment. The Respondent wishes to rely on the Labour Court determination in Bord Gáis Energy Ltd - v- Thomas (PWD1729) which found that an employee was not entitled to be paid a bonus because the company bonus rules required employees to be employed at the time the bonus was due to be paid, whereas as the employee had already left the company before the due payment date. Albeit the precondition of employment at the payment date of the bonus is an implied term rather than an express term, that has always been the way the Respondent has determined eligibility for any bonus payment which the Respondent submits that the Complainant was explicitly aware of as outlined above.

The Respondent respectfully requests the Adjudication Officer finds that this claim is without merit and therefore must fail, and to find in favour of the Respondent.

Findings and Conclusions:

A complaint was submitted by the Complainant on 24 August 2022 seeking it to be considered by the Inspectorate division of the WRC.  The Complainant’s representative in the first instance, sought for this complaint to be validly considered for adjudication.  The first issue to be decided by me is whether that complaint can be considered as a valid complaint and in time in accordance with the Workplace Relations Act. 

The issues for consideration involve:

‘Ticking the wrong box’ and Time Limits.

‘Ticking the wrong box’

The Complainant’s representative argued that the original complaint form, which sought that the complaint be referred to the Inspectorate division of the WRC be regarded as a valid complaint for adjudication.

Essentially, the crux of the question is whether a matter that has been explicitly referred only for inspection to a Workplace Relations Commission (‘WRC’) inspector, through the WRC complaint form, in this case, on 24 August 2022, could also be accepted as a complaint presented to the Director General for adjudication under section 41 of the Workplace Relations Act 2015.

In submitting a ‘complaint’ by ticking only the inspection box in the WRC complaint form, an employee actually submits information to the Inspection Services of the WRC which directly, automatically triggers the jurisdiction of an inspector to start the first phase of an investigation process.  This is in contrast to the procedure for presenting complaints to the DG and referral of cases to Adjudication Officers under section 41 of the 2015 Act, specifically as the employer / respondent must be put on notice of a complaint by the employee / complainant of the alleged contravention of the Act.

The relevant part of section 41 of the 2015 Act states as follows:

“Presentation of complaints and referral of disputes

41. (1) An employee (in this Act referred to as a “complainant”) or, where the employee so consents, a specified person may present a complaint to the Director General that the employee’s employer has contravened a provision specified in Part 1or 2of Schedule 5in relation to the employee and, where a complaint is so presented, the Director General shall, subject to section 39, refer the complaint for adjudication by an adjudication officer.”

…

(9) (a) A complaint to which this section applies shall be presented to the Director General under subsection (1) by giving notice thereof in writing to the Director General and the notice shall contain such particulars and be in such form as may be specified from time to time by the Minister.

…

(c) The Director General shall cause a copy of the notice under paragraph (a) or (b) to be given to the other party to the complaint or dispute concerned.”

There are a number of matters to be considered on foot of this section:

First, Section 41 explicitly confers a power to the Director General to refer a case to an Adjudication Officer only ‘where a complaint is so presented’. Therefore, if a complaint is not ‘so presented’ to the Director General, the latter has no power to refer a case to an Adjudication Officer. Second, the complaint must be presented to the Director General by giving a notice in writing.   Third, when such a complaint is so presented, the DG is under an obligation to ‘cause a copy of the notice…to be given to the other party to the complaint or dispute concerned’. The latter being a strict procedural requirement under the well-established principles of constitutional justice and fair procedures. There are no such requirements in relation to an information (‘complaint’) referred for inspection.

The diametrically opposing nature of the function of inspection and the function of adjudication is clear and the argument ‘ticking the wrong box’ being a minor ‘slip’ or inadvertence on the part of the employee / complainant does not stand up.   The primary task of inspection is to ‘promote and encourage compliance with relevant enactments’, as per the explicit function under section 11(1)(b) of the 2015 Act.  A WRC inspector is also empowered by the legislation to do everything and anything under sections 27 and 28 and in addition to that to issue ‘fixed payment notices’ for commission of relevant criminal offences under section 36 of the 2015 Act. It is worth noting that all these powers to act under the legislation are strictly directed to actions or omissions of employers.

Conversely, while because of the remedial nature of all the employment enactments i.e. all the employment enactments bestow rights on employees against their employers with the view of establishing a plain level field in the employment sphere, adjudication is concerned not just with upholding the rights of employees but also with the legitimate interests of employers; therefore, bringing justice for both parties and in some instances striking a balance between those rights and interests.

In the circumstances, where the powers of inspection and adjudication are clearly separated from each other and are deliberately kept apart, and that the Director General is not empowered to refer a complaint submitted for inspection to adjudication, I cannot hold with the Complainant’s view in this instant case that the complaint form received by the WRC on 24 August 2022, could also be accepted as a complaint presented to the Director General for adjudication under section 41 of the Workplace Relations Act 2015.

I therefore find that the complaint form received by the WRC on 9 February 2023 is the complaint I must consider under Section 41 of the 2015 Act.

Time Limits

The Complainant’s complaint is that the Respondent failed to pay him a bonus which he alleges was due to be paid on 31 March 2022.  The within complaint was received on 9 February 2023.

The complaint is clearly out of time under Section 41 (6) of the Workplace Relations Act 2015 which provides:

“Subject to subsection (8), an adjudication officer shall not entertain a complaint referred to him or her under this section if it has been presented to the Director General after the expiration of the period of 6 months beginning on the date of the contravention to which the complaint relates.

Section 41 (8) provides:

“an adjudication officer may entertain a complaint or dispute to which this section applies presented or referred to the Director General after the period referred to in subsection (6) or (7) (but not later than 6 months after such expiration), as the case may be, if he or she is satisfied that the failure to present the complaint or refer the dispute within that period was due to reasonable cause”.

In considering whether the failure to present the complaint within the six-month time period was due to reasonable cause, I have taken into consideration the fact that the original complaint was referred in error by the Complainant to the Inspectorate.  I note the Complainant had the benefit of legal advice.  In normal circumstances, the fact that a complainant had the benefit of legal advice would render an argument that allowance should be made for a late application to be null and void.   However, in this instant case, I note the error of referral to the wrong division of the WRC was an unusual one and was not brought to the Complainant’s solicitor’s attention until February 2023 and he made immediate amends to refer the complaint to the Adjudication division of the WRC.  I have taken into consideration whether the Respondent has suffered prejudice by such a delay.  I note the Respondent was on notice and co-operated with a labour inspection in quarter 4 of 2022 and I am satisfied that there was no prejudice suffered by the Respondent in affording an extension of time.     I have therefore decided to extend the time period for consideration of the complaint.

Substantive issue

The Complainant argues that he made and exceeded targets for the year ending December 2021 and his complaint is that the related bonus was not paid by the Respondent on the date which he submitted was in or around 31 March 2022.

The definition of wages in the Payment of Wages Act 1991 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, 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:

The definition includes any bonus payable under the Complainant’s contract of employment.

The Respondent argued that the bonus was a discretionary payment and as provided for in the Complainant’s contract of employment subject to ‘’change in line with the needs of the business each year’’.   the Respondent argued that it was contractually entitled to change the scheme based on the needs of the business and submitted that any sanctioned bonus has only ever been paid to employees still in employment on the date of the bonus payment.

Section 6 of the Act provides:

In considering whether the bonus payment was wages ‘properly payable’, I take into consideration the contractual situation, the practice of the Respondent regarding the date of payment and the Respondent’s contention that it was a requirement for the employee to be an employee at the date of payment.

The Complainant’s contract provides a requirement that he meet or exceed the targets on an ongoing basis.  The contract is silent on the matter of whether the bonus is discretionary.                  The practice of the Respondent as outlined in the email of 21 January 2022 from HR to the Complainant was that he was paid the bonus each year in April.  The Complainant was notified orally before his departure that the bonus was not payable to employees who were not in employment at the date of payment and he was notified in writing by the email of 21 January 2022.                                 In the circumstances, I find that despite the Complainant’s obvious disappointment, the bonus at a time when he was no longer an employee, was not wages ‘properly payable’ and I find his complaint to be not well founded.

Decision:

Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint  in accordance with the relevant redress provisions under Schedule 6 of that Act.

Based on the evidence and reasoning above I have decided that the complaint is not well founded.

Dated: 02/02/2024

Workplace Relations Commission Adjudication Officer:  Gaye Cunningham

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