Complainant

Respondent

Anonymised Parties

Employee

Employer

Representatives

Shonagh Byrne SIPTU

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-00037881-001

19/06/2020

The Complainant is seeking adjudication by the Workplace Relations Commission under Section 6 of the Payment of Wages Act, 1991, and has submitted the that the Respondent has not paid them or pad them less than the amount due to them but in particular has not paid them commission due  for eight and a half months.

The Complainant, who was represented by a member of SIPTU, commenced employment with the Respondent on the 19th January 2019. The Complainant was employed as a senior barber and creative stylist and her gross pay was €2,666.00 (€2,034.00 net) for 36 hours worked per month.

The Complainants contact of employment stated, inter alia, in relation to the provision for salary that “.. your salary will be €32,000 per annum and … you will also receive 10% commission for all valid paid services under your name, made payable in line with your salary payment.”

Effectively, this equated to €300.00 per month and in November 2019, the Complainant received a commission payment of €247.00 which covered the period in June 2019 but did not receive any commission payments from July 2019 to the 15th March 2020 wherein the Respondents premises closed due to the COVID-19 pandemic. The Complainant was not in work from the 15th March 2020 onwards due to the impact of the COVID-19 pandemic.

The Complainant relied on a letter from the Respondent dated the 18th July 2019 that “ ..as part of the Complainants contract of employment, she receives a monthly cash commission of €300.00 for performance related activities .. the Complainant has received these payments in the month of February, March, April, May and June to date and will continue to receive these payments for the remainder of her employment..“

The Complainant continued to engage with the Respondent in relation to outstanding commission payments and was informed by email, dated the 4th June 2020, “regarding commissions, the company has no cash reserves or working capital and as such we are working on securing that before the end of June in line with re-opening towards the end of July – once there is a position to begin organising additional payments I will let u know ..”

The Complainant voluntarily resigned their employment with the Respondent effective on the 29th June 2020 informing the Respondent by letter dated the 22nd June 2020 that because their contract had been breached and their commission and health care plan were not paid for many months they were left with no alternative but to resign their position.

It was submitted on behalf of the Complainant, commission is covered as wages under the Payment of Wages Act, 1991, and the Complainant raised the issue of unpaid commission with the Respondent on several occasions but did not receive the monies. The Complainant is seeking the payment of unpaid commission for the period July 2019 until March 2020.

This Complaint was received by the Workplace Relations Commission on the 19th of June 2020.

The Respondent, who was represented by the Director of the Respondent Company, accepts the background facts and timeline in relation to the Complainants employment. The Respondent was represented by the Director of the Respondent Company.

The Respondent submitted that the Complainant joined their company as one of their first employees and confirmed that she was a valued member of the team. The Respondent submitted that the Complainant had voluntary decided to leave on the 29th June 2020 and they had endeavoured to facilitate the Complainants needs and requirements throughout her tenure.

There is a grievance/dispute procedure in place but the Respondent submitted that the Complainant did not request a meeting to discuss her payment issues and instead chose to leave the company with less than one weeks’ notice and with no working notice served.

The Respondent forwarded an email to their employees, on the 15th June 2019, with the subject “Commissions moving forward, June 2019” and it stated that from a commission standpoint there would be a scale for payments. Following this email a team meeting was held on this specific topic and no issue was raised within the one month notice objection period as per the terms of employment contract or raised with the Workplace Relations Commission within the requisite six months.

The Respondent submitted that this change in commission pay had no bearing on the minimum wage and the Complainant was still being give her base salary and reasonable targets were set for commission payments. The Respondent submitted that the entirety of outstanding payments for commissions, totalling €118.36 were made to the Complainant.

The Respondent forwarded an email to their employees, on the 22nd June 2020, with the subject “Return to Work” outlining how they were trying to do everything to facilitate a safe return to work following the first lockdown in 2020. This email also stated they would rectify commissions within a month of returning so the Respondent believed there was neither any reason to leave nor that they had an unwillingness to settle amounts due.

The Respondent submitted that, at this very difficult time, that it was near impossible to generate revenue during lockdown and a level of understanding was required employees in these circumstances. However, the Respondent submitted that in response to their aforementioned return to work email the Complainant sent an letter of resignation (amended)  dated the 22nd June 2020  that she would not be returning to work the following week. The Respondent also indicated in the course of their evidence that the Complainant had already applied for Job Seekers Allowance to come off the Pandemic Unemployment Payment in advance of submitting their notice of resignation. Further, the Respondent believed that the Complainant had been performing haircuts in her home on the Respondents customers although she had expressed concerns about being in close contact with those outside of her family.

The Respondent submitted that if the Complainant is looking to be bound by the terms of the original employment contract, and not the updated commission payments terms then the Complainant must be also bound by the terms of the same agreement and that point was made in relation to the Complainant not giving sufficient notice period.  

The Respondent submitted that although the Complainant did not fulfil her contractual obligation to serve the appropriate notice for terminating her employment or work any of her notice period the Respondent still paid all of the commissions due to the Complainant.

It is the Respondents position that the Complainant should not be entitled to succeed in relation to their complaint pursuant to the Payment of Wages Act.

In the circumstances of this matter, I have carefully listened to the evidence tendered in the course of the hearing by both parties.

It is necessary to examine the facts giving rise to this complaint in light of the relevant legislative provisions for the material time of this complaint.  Section 1(i) of the Payment of Wages Act 1991 defines ‘wages’ in relation to an employee as “…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” 

Section 5(1) of the Payment of Wages Act 1991 provides: “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 remainder of the Section 5 provides for other circumstances in which an employer can make a lawful deduction from an employee’s wages which are not applicable to the instant case.

In Marek Balans -v- Tesco Ireland Limited [2020] IEHC 55 approving Dunnes Stores (Cornels court) Limited -v- Lacey [2007] 1 1.R. 478, it was stated a decision-maker must firstly determine what wages are properly payable under the employment contract before determining whether there has been a deduction under the Payment of Wages Act 1991.  Each case will turn on its own particular facts and in the instant case, it will be necessary to ascertain (1) whether the commission constituted a terms of the Complainants contract and (2) were there accepted changes  to the commission structure and (3) has there been a contravention of Section 5 of the Act.

Turning to the first issue, it is well established law that “Terms can be implied into a contract of employment in a variety of ways - such as by statute, by law, by custom and practice and by the conduct of the parties.  Once a term is implied into a contract, it will have the same effect as if it was written down and expressed between the parties.” (Regan & Murphy Employment Law, Bloomsbury, 2nd Edition [2017], Paragraph 3.48) The Complainants contract of employment provided “your salary will be €…   per annum and it will be paid monthly  .. you will also receive 10% commissions, for all valid paid services under your name, made payable in line with your salary payment.” I am satisfied that the Complainant had an established contractual entitlement to the payment of a commission on a monthly basis.

The next issue to be determined between the parties is whether the change to the commission structure was accepted by the Complainant. The Respondent relied on the aforementioned email of the 15th June 2019 in relation to a change of the commission pay scales and stated that no issues were raised by any of the team and there was a proposal that a view would be taken into returning to the original commission structures when revenues stabilised. In the course of the hearing of this matter, the Respondent relied on the case of GAP Personnel Franchises Ltd -v- Robinson UK EAT/0342/07 which stated that where employees do not accept a variation by the employer, especially one that has an immediate impact they should make it clear, preferably in writing, that they do not accept the change and are working under protest otherwise the employee may eventually be held to have implicitly accepted the change.    

However, following the email of the 15th June 2109, the Respondent stated, inter alia,  in a letter dated the 18th July 2019  “To whom it may concern - that  as part of her contact of employment the Complainant received a monthly cash commission of  €300.00 for performance related activities .. the Complainant will continue to receive these payments for the remainder of her employment with the Respondent company.”

The Complainant disputes that she agreed to any changes in the commission structure either orally or in writing. In that respect, the Complainant relied on the case of  Cowey -v- Liberian Operations Ltd (1996) 2 LLR 45, which stated that what is contractual, and not merely a work practice, may not be varied unilaterally .. such variation must be agreed between the parties regardless of whether the term is express or implied.

I am therefore satisfied on the balance of probabilities that the Complainant has established contractual entitlement to payment of the commission as per the letter of the 18th July 2019. I am further satisfied that the failure to pay the Complainant the commission constituted a contravention of Section 5 of the Payment of Wages Act 1991 and an unlawful deduction from her wages.

Section 6 of the Act provides for the referral of complaints to the WRC and remedies.  In particular Section 6 (4) of the Act 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.”

This Complaint was received by the WRC on the 19th June 2020. Therefore, I am bound by Section 6(4) of the Payment of Wages Act, 1991 to only consider the six-month period prior to the 19th June 2020.  The Complainant was paid €100.00 in July 2020 for her March 2020 commission as this was a short month due to the impact of COVID. I find that the Complainant is entitled to the payment of €700.00 for the six-month period prior to the 19th June 2020.

I find that the Complaint (CA-00037881-001) made pursuant to Section 6 of the Payment of Wages Act, 1991 is well founded and award the Complainant the sum of €700.00.

Wages – Commission