Complainant

Respondent

Parties

David  O'Shaughnessy

Emex Software Limited

Representatives

Hamilton Turner solicitors

 None in attendance

Act

Complaint Reference No.

Date of Receipt

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

CA-00056946-001

31/05/2023

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

CA-00056946-002

31/05/2023

The complainant was employed with the respondent from 1 November 2020 until he resigned on 31 May 2023.

The complaints referred under the Payment of Wages Act 1991 relate to salary, health insurance payments and pension contributions.

The complainant commenced employment with the respondent as vice president of product innovation on 1 November 2020.  His terms and conditions of employment were set out in a written agreement dated 3 June 2021. 

The pay and benefits attached to the complainant’s role were provided for in the written agreement; and included a basic salary of €150,000.00 gross per annum, reimbursement of healthcare cover for the complainant and his family, and an employer’s pension contribution of 5% of gross salary.

From July 2022, the complainant’s salary has been paid in an ad hoc manner and the respondent’s pension contributions in respect of the complainant also ceased in or around this time.

The complaints concern the respondent’s failure to pay salary, pension contributions and to reimburse healthcare cover costs, which were properly payable to the complainant in respect of the period from December 2022 to May 2023, inclusive. 

Summary of complainant’s sworn evidence

The complainant’s gross monthly pay was €12,500.00.  He was not paid his salary for January and May 2023, and he was paid part of his salary for December 2022, February 2023, March 2023 and April 2023.     The respondent did not make the agreed monthly pension contribution of €625.14 in respect of the complainant for each of the months December 2022 to May 2023.  The respondent did not pay the healthcare cover cost of €264.52 for each of the months December 2022 to May 2023.

There was no attendance by or on behalf of the respondent. 

CA-00056946-001 (Payment of Wages Act 1991

This complaint was withdrawn by or on behalf of the complainant at the hearing on 12 October 2023.

CA-00056946-002 (Payment of Wages Act 1991)

The relevant law

Section 1 of the Payment of Wages Act 1991 (the “1991 Act”) defines wages in relation to an employee as meaning:-

“…. 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: Provided however that the following payments shall not be regarded as wages for the purposes of this definition:

(i) any payment in respect of expenses incurred by the employee in carrying out his employment,

(ii) any payment by way of a pension, allowance or gratuity in connection with the death, or the retirement or resignation from his employment, of the employee or as compensation for loss of office,

(iii) any payment referable to the employee's redundancy,

(iv) any payment to the employee otherwise than in his capacity as an employee,

(v) any payment in kind or benefit in kind,

(vi) any payment by way of tips and gratuities.”

Section 5 of the 1991 Act prohibits the making of deductions from wages save in certain circumstances. 

Section 5(6) of the 1991 Act 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 (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. “

In the first instance, I must establish the wages properly payable to the complainant within the meaning of the 1991 Act and within the cognisable period of the complaint referred, namely the period from 1 December 2022 to 31 May 2023, before considering the question of a deduction.

Basic monthly salary

The monthly salary to which the complainant was entitled is evidenced in the employment agreement between the parties dated 3 June 2021 and the payslips provided at the hearing. 

Based on the uncontested evidence of the complainant, I am satisfied that the basic monthly salary properly payable to the complainant on the last working day of the month was €12,500.00 gross.

On review of the documentation before me, the complainant received two payments from the respondent for different amounts, neither equating to the net amount of his gross monthly salary, at the beginning of December 2022 and the end of January 2023.  I accept the uncontested evidence of the complainant that the respondent was not providing payslips at this time and that these amounts were in respect of unpaid August and October 2022 salary and part-payment of December salary. 

The complainant received €5,000.00 net on 27 February 2023, 30 March 2023 and 28 April 2023.  Having regard to payslips from 2022, and acknowledging the lawful deductions made from the gross monthly pay figure, the net payment of €5,000.00 in February, March and April 2023 was less than the total amount of net wages of €6,800.35, properly payable to the complainant in respect of those pay periods.

I note the complainant’s resignation date from employment of 31 May 2023 and find that the complainant was not paid any of the wages properly payable to him in May 2023. 

I find that the complainant was paid less, or none of the net wages properly payable to him in respect of pay periods during the cognisable period, as follows:-

December 2022:  €2,689.35

January 2023:  €6,800.35

February 2023:  €1,800.35

March 2023:  €1,800.35

April 2023:  €1,800.35

May 2023:  €6,800.35  

and that such deductions were in contravention of section 5 of the 1991 Act.

Healthcare cover

The complainant was entitled to be reimbursed by the respondent for healthcare cover for him and his family.  This is provided for in the employment agreement dated 3 June 2021.  The complainant’s evidence was of a monthly VHI health insurance payment of €264.52, made in respect of each of the months December 2022 to May 2023, which he was not reimbursed by the respondent.

The definition of “wages” under the 1991 Act includes “any other emolument, referable to his employment, whether payable under his contract of employment or otherwise”.  I am satisfied that the entitlement of the complainant to reimbursement of the cost of VHI healthcare cover constitutes an emolument referable to the complainant’s employment and payable under his contract of employment. 

I find that the wages not paid in this regard and deducted in contravention of section 5 of the 1991 Act amount to €1,587.12.

Pension contributions

While section 1(b)(ii) of the 1991 Act excludes from the definition of wages “any payment by way of a pension”, I am satisfied that a contribution towards pension is not a payment by way of pension within the meaning of section 1(b)(ii) of the 1991 Act.   I note in this regard the Labour Court’s determination in Tourism Ireland v Farrelly (PWD 1643) on this matter where it held:-

“The Court finds that a pension deduction is not a payment by way of a pension within the meaning of the Act and accordingly finds no merit in the Respondent’s submission that the matter is outside the scope of the Court’s jurisdiction. The Court finds that the impugned deduction is a matter that falls to be dealt with under section 5 of the Act and is therefore properly before it for decision.”

The employment agreement dated 3 June 2021 provides that the respondent will make an annual contribution to the complainant’s nominated pension of 5% of the complainant’s gross salary.  The complainant’s uncontested evidence was that the respondent ceased making pension contributions in respect of the complainant in or around July 2022. 

I am satisfied that it was a condition of employment that the respondent would make a pension contribution of 5% of the complainant’s gross salary.  The evidence before me established that the respondent made payments by way of pension contribution in respect of the complainant in 2022.  I accept that the respondent did not make the pension contribution in respect of the complainant for each of the months during the cognisable period and find that this constitutes an unlawful deduction amounting to €3,750.00.    

Conclusion

I find that wages properly payable to the complainant in the period 1 December 2022 to 31 May 2023 were not paid and that the deductions made were contrary to the 1991 Act.

Accordingly, my decision is that the complaint is well founded and I direct the respondent pay to the complainant compensation of €27,028.22. 

Wages – Properly Payable – Salary – Healthcare cover – Pension contributions