Complainant

Respondent

Parties

Pawel  Lachiewicz

Cork Automania Ltd

Representatives

Olga Shevchenko, Immigrant Advice Bureau Ltd

Eoin McDonald, Foley Turnbull Solicitors

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-00041816-001

06/01/2021

On 22 October 2020 and 6 January 2021, the Complainant, A Mechanic represented by the Immigration Advice Bureau ltd, submitted a total of three complaints under the Payment of Wages Act, 1991 in respect of an employment which spanned 30 October 2018 to 18 December 2020.

The Respondent, represented by Foley Turnbull Solicitors, has refuted the claims, and submitted an outline submission in defence on 15 February 2021.

The Complainant submitted an outline submission 0n 15 March 2022.

The hearing in March 2023 is a de novo hearing as an earlier hearing under a different Adjudicator was subject to a reported systems failure.

At hearing on March 20, 2023, the Complainants representative withdrew the older claims:

CA-40587-001

CA-40587-002

Leaving the instant claim intact and subject to inquiry.

On 22 March 2023, I wrote to the Complainant in follow up from hearing. I identified   to identify the documents I requested at hearing.

I confirmed that the earlier complaints were now closed and sought the following documents on a formal footing.

1 contract of employment

2 an email referred to as a correspondence between the complainant and the respondent on 29 December 2020

3 PRSI records for the complainant, inclusive of records of PUP payment

Once received, on March 24, 2023, the response was shared with the Respondent for comment. This response was received on March 29, 2023.

On January 6, 2021, the Immigrant Advice Bureau ltd submitted a complaint in accordance with the Payment of Wages Act, 1991, that their client, a senior Mechanic had been subject of an unlawful deduction of €3,825.71 in wages on 22 December 2020.

His weekly gross wage was €660.00.

The amount was deducted from the final pay slip and was not accompanied by the Complainants consent.

The amount arose from a Suspend Advice document strongly rejected by the Complainant and arose in the context of a final payment following his dismissal.

At hearing, the Complainants representative outlined that the complainant had been suspended from his job pending an investigation from 23 June 2020. He faced allegations that he had failed in his duties as a mechanic. A disciplinary process followed, which concluded in dismissal.

The complainant side exhibited a pay slip dated January 1, 2021, which demonstrated that €3,825.71 was removed from the take home pay. the deduction was not delineated on the pay slip. The Respondent issued a letter dated 30 December 2020 which outlined a final payment of

€4956.02 - €3825.71 = €1,130.31 on the same date.

The deduction described in a “Suspend Advice “were contested by the Complainants representative as having been applied contrary to conclusions which arose on the completed investigation, where Graphite HRM had found that the complainant was not responsible for some of the costings recorded. The Suspend advice also contained costings associated with charges not integral to the investigation and an overestimate on both labour and parts.

The Complainant sought to recover the entire deduction of €3, 825.71 in respect of the contravention of the Payment of Wages Act, 1991.

Evidence of the complainant by oath.

The Complainant outlined that he had worked with trucks and had wanted to work in a garage. A number of mistakes had occurred, and he was suspended without pay in June 2020.

He received the covid support payment PUP, without applying for it and sought advice.

His employment ended in dismissal, and he was left short €3825 in pay, notified in a letter dated 30 December 2020. His final date of employment was 18 December 2020.

During cross examination, the complainant denied that the context of the investigation covered 20 issues.

The Complainant denied making application for PUP. He raised this issue with DSP, but he had not received a response. He did not have any remnant documentation surrounding PUP.

He confirmed that he had received PUP from May 2020.

In answer to the Respondent representative on the signed pay agreement, the complainant said that he did not remember signing the document. He agreed to follow through with the email to the respondent dated 29 December 2020.

The Complainant confirmed that he had not been found negligent in the investigation and had requested to get back to work.

In response to clarifications, the complainant re-affirmed that he had received the PUP without canvassing by application and he had retained the sums. He did not re-act when faced with the variation in BIC/ IBAN numbers.

He confirmed that he had raised the issue of PUP with DSP in December 2020 and had been informed that it was being referred to another Dept.

The Complainant was unable to articulate the conclusions of the investigation. He had no awareness of any culture of repayment at the business and stated that it was not material to him but “others business “. He was unsure when he received the Investigation report.

In redirect, the complainant told the hearing that he had been assured of full pay during the disciplinary process, but this had not followed. He had not secured any rebate in tax as he had not applied.

In closing, the complainant’s representative concluded that the December 2020 deduction was unlawful. She confirmed that submission of the 29 December email would confirm that the deduction was challenged. She also confirmed that BIC/ IBAN had changed in the bank account. 

The Respondent operates an Auto business and confirms that the complainant commenced work on 30 October 2018.

The Respondent has disputed the claim made.

The Respondent representative outlined that the complainant had been involved in a number of contentious behaviours in the workplace and named these behaviours as “stealing and aggressive behaviour “On 23 June 2020, the complainant was suspended with pay from 23 June 2023. A delay followed in completion of the investigation, which issued to the Respondent on 26 October 2020.

This resulted in termination in the complainant’s employment.

The issue in the instant case arises from the final payment made to the complainant. The Complainant has not contested his dismissal through appeal.

It was the respondent case that the complainant had given insufficient weighting the scope carried by the respondent under the Company Deduction from Pay Agreement, signed by him on 7 November 2018 which bound the complainant to the clause:

“Liable to pay the full or part of the cost of repair or replacement “for the damage to vehicles, stock, property as a result of the complainant’s carelessness and negligence or deliberate vandalism.

The Respondent outlined that on 14 December 2020, the Respondent had issued the complainant with a “suspend advice “which explained the deductions made. This involved reference to 14 vehicles and was dated in submission as 11 February 2021 with total value €6162.98.

“All of the above is due to loss of income. No physical parts were invoiced, these losses were carried by the company due to the time spent on faulty workmanship bring corrected and charged at an hourly rate.

Evidence of Ms Roytenko, Proprietor on oath:

Ms Roytenko outlined that the complainant had been provided with a contract, the deduction agreement, and the staff handbook (54 pages) which were signed by him, on commencement of his employment and filed.

She told the hearing that every employee was aware of the deduction policy.

Ms Roytenko submitted that over the first 12 months of the complainant’s employment, he had been a “really good worker “After this, he asked for and was given three pay rises.

After this, the complainant went “downhill” and behavioural issues arose surrounding stolen coolant and CC TV footage.

On Professional advice, she was advised to suspend the complainant as a health and safety risk. A follow-on investigation due to take 3 weeks to conclude ended up taking 27 weeks. The business was unable to meet the complainant’s payment of salary outside of the first three weeks of his suspension.

The Respondent confirmed that the business had no power to apply for PUP and had not done so.

She reflected on the enormity of the mistakes associated with the complainant and said that the business was not pursuing that full amount.

The Investigation report issued in October 2020 and the disciplinary hearing followed on 14 December 2020, where the complainant admitted “it was him”.

On 20 December 2020, the complainant was dismissed for theft and permitted an appeal within 5 days.

Ms Roytenko contended that during the disciplinary procedure, he had been presented with details of bills and advice and these formed the deductions made on December 24, 2020.

Ms Roytenko clarified that she had not communicated with the complainant in the aftermath of the three weeks full pay. She advised that the final payment was comprised of a top up payment on the PUP to reach the base line salary from which the deduction was then made.

The Business had received EWSS / TWSS as state covid support payments.

During cross examination, Ms Roytenko accepted that the complainant had a clean disciplinary record up to 2020. The occurrences of concern went from end of March to end of May 2020.

In answer to the Complainants representative question on whether the complainant had contacted her after the three weeks pay ceased? The Respondent replied “you contacted me “.

The Complainant put to the witness that deduction of monies had not emerged as a finding in the Investigation process and pointed to one such sum. The respondent replied that this was not to replace parts but labour costs.

In response to clarifications, Ms Roytenko said that the complainant had not responded when met with the bill advice during the disciplinary procedure. He had not challenged the amounts or raised a grievance.

Ms Roytenko said that she had been threatened by the complainant and his representative to be reported to DSP in the December 29 communique. This letter addressed holidays but did not constitute a challenge on the deductions.

In conclusion, the Respondent representative placed significant weighting on the signed pay agreement, which permitted the deduction made.

The Complainant had not appealed his dismissal or challenged the deduction internally. The Respondent had complied with the provisions of the Payment of Wages Act, 1991 by giving two weeks’ notice of intention to deduct on 24 December 2020.

The Respondents Representative submitted that the case be dismissed.

I have been requested to inquire into the facts of this case. In the process of making a decision in the case in accordance with Section 5 of the Payment of Wages Act, 1991, I have read and reviewed both of the parties’ written submissions. I have also listened carefully as evidence was adduced by both parties. I have also had regard for the submitted post hearing documentation and comments arising.

The claim here is for recovery of €3, 825.71. The claim is disputed by the respondent who has relied on the parameters of Section 8 of the payment agreement signed by the complainant on 7 November 2018. While the Complainant has no recall or recollection of signage, the Respondent is standing over their record of signature held on file.

For my part, in light of the centrality of this clause to the case, I have thought it relevant and illustrative that I record the central section 8 for the purposes of my decision making.

Any damage to vehicles, stock or property that is the result of your carelessness, negligence or deliberate vandalism will render you liable to pay the full or part of the cost of repair or replacement.

Any loss to us that is the result of your failure to observe rules, procedures or instructions or is the result of your negligent behaviour or your unsatisfactory standards of work will render you liable to reimburse to us the full or part of the cost of the loss.

In the event of failure to pay, such costs will be deducted from your -pay.

The Parties have both approached this case in the aftermath of a protracted suspension and investigation into cause for concern for the complainant’s work.

This investigation led to a disciplinary hearing on December 14, 2020, and a dismissal some 4 days later. Both parties accept that while there appears to have been a squabble on pay at conclusion, the complainant neither appealed the decision to dismiss or challenged the deduction through the company procedures.

For me, I would have preferred if the complainant had engaged with his former employer in a more meaningful manner prior to referring this case the WRC on 6 January 2021. It is not ok to flaunt internal procedures by placing the respondent on notice of an intention to refer the nonpayment of wages straight to WRC.I disagree with the Complainant representative when she contended that the complainant could not be expected to remember anything .

Section 5(1) of the Act is prescriptive on the narrowly defined permissible grounds for deduction of wages under the Act.

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.

Statute, Contract or Consent are the three windows.

The Complainant has submitted that the Respondent acted unlawfully when pay was deducted in December 2020.

The Respondent countered this by reliance on the submitted enabling Section 8 clause of the Pay Agreement. The Respondent has drawn permission from Section 5(1) (b) and (c).

It is important that I draw on the Investigation Report outcome which served as a feeder into the disciplinary process, which culminated with the complainant’s dismissal. There were 7 allegations set out between April 2019 and June 30, 2020 (one week after the suspension)

The Investigator was not present at hearing. The Complainant submitted a heavily redacted version of the findings at hearing.

At the conclusion of the investigation, the heavily redacted findings were recorded as commencing on page 12 with numerous omissions of pages before page 31 on conclusions, where the complainant was found:

“Mr Lachiewicz does have a further case to answer in relation to allegations “……4 grouping of allegations were cited.

The matter was then referred to Ms Roytenko. Dismissal followed. I accept Ms Roytenkos evidence that she presented extracts of the costings before the complainant during the disciplinary hearing, and he did not comment.

I also accept that there was some ambiguity surrounding the quoted dates for the suspend advice in the respondent booklet.

Neither party placed documents from the disciplinary hearing before the   hearing in this case.  Therefore, all I have to go on in terms of findings against the complainant which are the heavily redacted findings of the Investigation. In short, the complainant redacted the findings in allegations, where the complainant was found to have a case to answer and exhibited those where he was found not to have a case to answer. That amounted to 4 out of 7 charges.

I fully accept that the Complainant signed the Deduction Pay Agreement on 7 November 2018. The Statement of Terms signed by the respondent and presented by the complainant post hearing contains a permissive clause directly linked to that Agreement.

I do not accept the complainant’s evidence that he lacked organisational awareness of this Agreement. It is simply not credible that he distanced himself from   the Agreement in this manner. Dialogue on this Agreement should have prefaced referral of the case to the WRC, in my opinion.

However, have found that there is fault on both sides in relation to the baseline Deduction in Pay Agreement. I will return to this, shortly.

PRSI records:

A surprising fact in this case was the presence of the PUP payment during a period of suspension. I fully accept that the complainant was suspended on full pay and that this ceased without explanation some 3 weeks into the period of suspension, 16 July 2020, never to return.

I am struck that the Respondent retained liability for payment of wages from July 17 onwards at the conclusion of employment. This is now the origin of the claim for properly payable wages rather than   sequential with the period of employment.

From the PRSI/ PUP records submitted, I have observed that the Complainant has 56 full PRSI contributions in 2020 and based on the PUP payments made, inclusive of double payment in December 2020, these payments (€350/€300)   span a period in excess of the period of suspension.

On foot of these records, I began to wonder whether there was a parallel employment in this case? However, I am not able to confirm that outside of a resumed hearing now.

I did, however share my concerns at hearing with both parties, that they may have a vulnerability in the support payments received through covid pandemic era.

I also note that the Respondent had not concluded a statutory reconciliation exercise on EWSS/ TWSS. Neither had the Complainant concluded a Revenue reconciliation.

Section 5(2)(2) of the Act has a central application in this case.

2) An employer shall not make a deduction from the wages of an employee in respect of—

(a) any act or omission of the employee, or

(b) any goods or services supplied to or provided for the employee by the employer the supply or provision of which is necessary to the employment,

unless—

(i) the deduction is required or authorised to be made by virtue of a term (whether express or implied and, if express, whether oral or in writing) of the contract of employment made between the employer and the employee, and

(ii) the deduction is of an amount that is fair and reasonable having regard to all the circumstances (including the amount of the wages of the employee), and

(iii) before the time of the act or omission or the provision of the goods or services, the employee has been furnished with—

(I) in case the term referred to in subparagraph (i) is in writing, a copy thereof,

(II) in any other case, notice in writing of the existence and effect of the term,

and

(iv) in case the deduction is in respect of an act or omission of the employee, the employee has been furnished, at least one week before the making of the deduction, with particulars in writing of the act or omission and the amount of the deduction, and

(v) in case the deduction is in respect of compensation for loss or damage sustained by the employer as a result of an act or omission of the employee, the deduction is of an amount not exceeding the amount of the loss or the cost of the damage, and

(vi) in case the deduction is in respect of goods or services supplied or provided as aforesaid, the deduction is of an amount not exceeding the cost to the employer of the goods or services, and

(vii) the deduction or, if the total amount payable to the employer by the employee in respect of the act or omission or the goods or services is to be so paid by means of more than one deduction from the wages of the employee, the first such deduction is made not later than 6 months after the act or omission becomes known to the employer or, as the case may be, after the provision of the goods or services.

In this case, the Respondent has relied on the Pay Deduction Agreement to defend the deduction paid on the January 1, 2021, slip.

However, a careful reading of this clause 8, suggests at a very minimum a twostep approach to leading to a potential deduction in wages.

In the event of carelessness, negligence, deliberate vandalism, or failure to observe rules, procedures or instructions, full or part of the cost is owed to the employer. Crucially, the addendum clause of “in the event of failure to pay, such costs will be deducted from your pay “

Neither party exhibited the December 18, 2020, letter of dismissal when now appears to have contained the first statement of respondent loss.  There appears to have been another communication in December 2022. The sole contemporaneous records presented at hearing were the December 30 respondent document and the requested document from the complainant dated December 29,2020. The deduction was made consistent with the December 30 letter issued.

I am not satisfied that this complies with the direction in Section 5(2) (a) of the Act.

I accept that the respondent held a presiding agreement on pay deduction. However, this permits a “full or in part “capacity for the respondent to recover. The Respondent did not present a document requesting payment “in full or in part “outside of the December 30 letter. I could not find an exercise of discretion in that regard. I could not identify a notified period to facilitate   payment before moving to unilateral deduction on 31 December 2020.

I cannot find that the sum deducted was either fair or reasonable, coming as it did following a long break in payment of wages to the complainant and it appeared to ignore the clear undertaking provided by the respondent that suspension was to be covered on full pay. Equally, I am satisfied that the complainant had 4 allegations upheld at investigation and 3 were not. There was no weighting allowed for this. The reference to a March 2019 omission has no place in this statement of loss. I note that the complainant was not provided with a receipt for the payment.

In Homebound Technical Services ltd and David Faulkner PWD 222, the Labour Court, in finding a contravention   in Section 5 of the Act in a case involving repayment of education fees made a very incisive finding when they said:

However, the Respondent relied on provisions in a handbook and in a contract, neither of which were specific enough to enable them to act as they did. As a result, the Complainant never agreed to the deductions concerned, had no way of knowing that the deductions would be made and entered into commitments without being in full possession of all facts. Ultimately, the Complainant is entitled to the protections of the Act because the Respondent failed to attain the authority necessary under the Act to make the deductions concerned.

Before presuming that this case is on all fours with the instant case, I must emphasise that I find that the complainant did have an organisational awareness that the Pay Deduction Agreement applied in his workplace.

In a recent Labour Court case of Irish Prison Service, PWD 2316, the Court drew on the current starting position in   assessing a claim for contravention of the Payment of Wages Act, 1991.

Marek Balans v Tesco Ireland Limited [2020] IEHC 55 Mac Grath J. said as follows:

• “The starting point is that the appellant was initially liable to be paid the amount stipulated in the written contract, and only became liable to be paid a lesser amount if there was some enforceable variation of that contract, whether by waiver, estoppel or agreement.”

I accept that the complainant had an entitlement to be paid his wages on leaving his employment. The Respondent had given an undertaking to pay during the period of suspension and had reneged on that commitment until they again accepted liability on December 18, 2020, the day of dismissal.

I must now consider whether the deduction of wages on 31 December 2020 contravened Section   5 of the Act?  

On a careful consideration of all the facts in this case, I accept that the Respondent held authority to move to seek a recoupment of wages paid in case of employee omission, but only where it notified the complainant of that amount “in full or in part “and allowed for a period of time before “failure to pay “was declared.

This is not what happened in this case and the complainant was advised to pay a full amount against an extended period of a nonpayment of wages through suspension. I found this to be a variance on the pay deduction agreement. The Agreement is silent on time specifics between notification of “in full or in part “loss and “declaration of failure to pay “

I found that the Respondent responded to a term of reference in the statement of employment and in their own deduction on pay agreement. However, I found that by applying a statement of loss to the omissions for which there was no finding of culpability, the respondent erred in their calculations and assumed an authority, the law did not permit them to have. Faulkner, applied.

I found that the respondent observed the one-week notification required but found that the respondent exceeded the amount of that loss and did not provide a receipt to the complainant.

The Respondent balanced the state payment of PUP to offset their liability to pay wages. I am not viewing the facts of the case through DSP eyes as I lack any jurisdiction there, but I am certain that the PUP payment was never meant to allow the respondent an opt out of an undertaking given on June 23, 2020, to pay wages during a suspension.

I find that the complaint is part well founded. I have identified a contravention of Section 5(2) (a) of the Act and have established a contravention in Section 5 of the Act.

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.

Section 6 of the Payment of Wages Act, 1991, requires that I make a decision in relation to the complaint in accordance with the provisions of section 5 of the Act.

I have identified that the complaint is part well founded. It is open to me to consider compensation as   reasonable in this case.

Given that the circumstances of this case encompassed the national pandemic of covid 19 era, I am aware that the State has paid the complainant for the entire period of his suspension to a figure in excess of €11,000. I must factor that into any consideration of compensation for deduction of wages.

Having considered all the circumstances of the case, the payment of PUP and associated top up payments to the complainant, by the respondent, prior to the deduction at hand.

I order the Respondent to pay the complainant €1,000 nett in compensation for the breach of Section 5(2) (a) of the Act.

Payment of Wages / Agreement to deduct wages