Complainant

Respondent

Anonymised Parties

An Employee

A Development Company

Representatives

  N/A

A Managing Director and Company Secretary and A Director

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-00052395-001

24/08/2022

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

CA-00052395-002

24/08/2022

The complaints concern alleged failures on the part of the Respondent to pay to the Complainant outstanding wages comprising of one months’ pay, notice pay and holiday pay following his resignation contrary to the Payment of Wages Act 1991. The Respondent disputed and rejected the complaints on the basis of the Complainant’s conduct and maintained that it acted in accordance with the Complainant’s contract of employment.

CA-00052395-001 and CA-00052395-002

The Complainant stated that he commenced employment with the Respondent on the 23rd July 2018, that he resigned on the 28th February 2022 and that his employment ended on the 28th March 2022. The Complainant stated that his net monthly pay was €3,784.00, that he was paid monthly and that he worked 40 hours per week.

The Complainant gave evidence that in November 2021 examiners were appointed to the Respondent by the Circuit Court. The Complainant understood that a scheme of arrangement was put into place whereby the creditors of the Respondent represented by the Director and the Managing Director took control of the company. The outgoing directors, which included the Complainant as a non-shareholding director, were removed and a new Board of Directors was appointed. The Complainant stated that he was informed by one of the Court appointed examiners that his employment with the Respondent would not be affected, including his entitlement to annual leave.

The Complainant gave evidence that on the 15th February 2022, prior to the scheme of arrangement being put in place, he met with the Director to discuss his future with the Respondent. The Complainant stated that from the outset it was uncomfortable meeting and that he felt very unsure of his future with the Respondent. At the meeting the Complainant advised the Director that he would be taking two weeks annual leave from the three weeks which he was owed from 2021 and that he would be commencing annual leave on the 21st February 2022. The Complainant gave evidence that the annual leave he was taking was notified to the Court appointed examiner during the examinership process. On the same day the Complainant met with the Managing Director. The Complainant gave evidence that this too was a hostile meeting and the Managing Director demanded that the Complainant return on the 18th February 2022 with hard copy files which the Complainant duly did.

The Complainant stated that on the 18th February 2022 he attended the office of the Managing Director with the requested files and that he agreed to meet with the Managing Director again that day. The meeting lasted over two hours and was hostile and adversarial. The Complainant gave evidence that at one point the Managing Director asked him what role he foresaw for himself with the Respondent and that the Managing Director advised him if he wanted to move to another job there would be no impediment from the Respondent and that the Managing Director would provide the Complainant with a reference. The Complainant stated that he felt threatened and uncomfortable and that he was unable to speak at ease throughout the meeting. The Complainant gave evidence that at this meeting his salary and the date of payment each month of his salary was discussed and that the Managing Director requested that the Complainant send his details, including his bank details, to the Respondent’s Chief Financial Officer which he duly did on the 20th February 2022. On the 24th February 2022 the Complainant contacted the Respondent’s Chief Financial Officer to confirm that she had received his bank details and to query when his February 2022 salary payment would be made. The Respondent’s Chief Financial Officer advised the Complainant to contact the Managing Director.

The Complainant gave evidence that on the 24th February 2022 he spoke with the Managing Director who advised the Complainant that he had only just received the Court mandate to allow him to take control of the Respondent’s bank accounts and that he did not foresee the Complainant’s salary payment for February 2022 being made that day nor the following day but that it would be made the following week. The Complainant gave evidence that the Managing Director queried with him what provision he had left for salaries and wages as a director of the Respondent and that he informed the Managing Director that it was not his role or responsibility within the company. The Complainant gave evidence that the Managing Director informed him during the course of this telephone conversation that if he did not get paid it was his own fault. On the 25th February 2022 the Complainant received an e-mail with his pay slip for the month ending the 28th February 2022 indicating that the payment would be made on the 28th February 2022 by credit transfer however this payment was never made by the Respondent to the Complainant.

The Complainant gave evidence that while he was advised on a number of occasions by one of the Court appointed examiners that his employment with the Respondent was guaranteed under the scheme of arrangement, from the meetings and conversations with the Director and the Managing Director it was clear to him he was not part of the future plans of the Respondent. On the 28th  February 2022 the Complainant tendered his resignation in writing to the Director and in accordance with his contract of employment he gave the Respondent the required four weeks’ notice. The Director responded to the Complainant accepting his resignation and noting the four weeks’ notice. The Complainant gave evidence that the Director requested that the Complainant attend a meeting at his office upon the Complainant's return from annual leave on the 7th March 2022 and that he responded to the Director via Whatsapp message asking if an arrangement could be made for the payment of his February 2022 salary prior to the meeting on the 7th March 2022. The Director responded via Whatsapp message on the 3rd March 2022 and committed to making the payment of the Complainant’s February salary prior to the 7th March 2022 but advised that he did not have the Complainant’s bank details. The Complainant responded by stating that he had previously furnished his bank details but he would do so again which he duly did. Despite assurances from the Respondent that his February 2022 salary would be paid the Complainant stated that he never received his salary.

The Complainant gave evidence that he attended a meeting on the 7th March 2022 and that only the Managing Director was present. At this meeting the Complainant queried the payment of his salary and he gave evidence that the Managing Director refused to discuss his outstanding wages. The Complainant stated that at the conclusion of the meeting the Managing Director asked the Complainant to write a note detailing alleged wrongdoings and that in exchange for this note the Managing Director indicated he would make the payment of the monies due and owing to the Complainant.

On the 10th and 11th March 2022 the Complainant emailed the Director to advise that he would meet with himself and the Managing Director once he was paid in.

The Complainant received no further communication and no payments were made to the Complainant. In summary the Complainant submitted that his claims were for unpaid salary for February 2022, 5 days holiday pay and his unpaid salary for the four weeks’ notice or payment in lieu of notice.

Cross Examination of the Complainant

Under cross examination the Complainant confirmed that he did not attend work between the 18th February 2022 and the 28th February 2022 however he stated that that was because he was  on annual leave during that period. In response to a query regarding previous holidays the Complainant confirmed that he had Covid-19 over the Christmas period and that the Respondent consented to the Complainant carrying over 15 days annual leave from 2021 to 2022  and that he did not take any annual leave prior to the 21st February 2022.

It was put to the Complainant that as a director of the Respondent he had authority to make payments however this was denied by the Complainant who confirmed that he was not responsible for making payments.

During the cross examination of the Complainant the Respondent confirmed that monies due and owing to the Complainant were withheld because of wrongdoing on the part of the Complainant. In response the Complainant gave evidence that he did not understand the accusations of wrongdoing or that there was an allegation of fraud as against him and that the Managing Director and the Director never said to him that they were not paying him because he had committed any wrongdoing.

In response to a query raised by the Adjudication Officer the Complainant confirmed that he was never subjected to the Respondent’s disciplinary procedures and that he never received any written communication from the Respondent regarding any alleged wrongdoings or any alleged act or omission on his part as an employee of the Respondent.

CA-00052395-001 and CA-00052395-002

Evidence of the Director

The Director gave evidence that his position as set out in his written statement dated the 2nd February 2023. He stated that joint examiners were pointed by the Circuit Court in November 2021 for the Respondent and that the said joint examiners were instructed to carry out a special investigation. He stated that the terms and conditions of the Complainant’s employment were not altered while the Respondent was in examinership and he made reference to the Complainant’s contract of employment dated June 2018. The Director stated that a meeting was held on the morning of the 15th February 2022 between himself and the Complainant whereby the Complainant’s future with the Respondent was discussed. The Director stated that he was surprised the Complainant felt that his future with the Respondent was unsure as the Complainant knew the full internal workings of the Respondent and this included all the material facts which resulted in the Respondent being put in an examinership. He stated that during the meeting, in circumstances where the Director and the Managing Director were uncertain as to the financial condition of the Respondent, he confirmed to the Complainant that his employment was secure with the Respondent for the next two to four months at least. The Director stated that the Complainant expressed that he would have to consider his options and that he would be taking two weeks’ annual leave commencing on the 21st February 2022 to which there was no objection.

The Director stated that a scheme of arrangement was approved by the Circuit Court on the 18th February 2022 and the Respondent exited examinership. New management assumed control of the Respondent on the 18th February 2022 and the Complainant was no longer a director of the Respondent but remained an employee.

The Director stated that on the 28th February 2022 the Complainant resigned in writing providing four weeks’ notice which he accepted. Upon his acceptance of the Complainant’s resignation the Director requested that the Complainant attend a meeting on his return from annual leave on the 7th March 2022. The Director stated that he texted the Complainant via WhatsApp on the 3rd March 2022 and requested the keys to the company van be returned to the Respondent at the scheduled meeting on the 7th March 2022. The Complainant responded and asked that his salary be paid prior to the meeting and the Director stated that he agreed and advised the Complainant that he did not have his bank details.

The Director did not attend the meeting on the 7th March 2022 however he confirmed that he was fully aware of the matters which were discussed at that meeting between the Complainant and the Managing Director. The Director stated that he received email communication from the Complainant on the 10th and 11th March 2022 advising that the Complainant would have another meeting with the Director and the Managing Director upon receipt of his wages in full.  

Evidence of the Managing Director

The Managing Director gave evidence that his position was set out in his written statement dated the 2nd February 2023. He stated that he had a meeting with the Complainant in the afternoon on the 15th February 2022 whereby he requested that the Complainant deliver hard copy files of the Respondent to him on the 18th February 2022. Upon the Complainant’s return on the 18th February 2022 with the requested files the Managing Director requested another meeting with the Complainant stating that he would be accompanied by the Respondent’s Director of Projects at that meeting. The Managing Director stated that it became clear to him during the second meeting that the Complainant was very uncomfortable dealing with him and he felt that this was due to the new management taking over the Respondent. He accepted that he queried whether the Complainant would like to look for employment elsewhere and that he offered to provide a reference letter if he wished to do so. The Managing Director accepted that the Complainant's salary was discussed at this meeting and he requested that the Complainant forward his bank details to the Respondent’s Chief Financial Officer to facilitate future salary payments.

The Managing Director gave evidence that he returned the Complainant’s telephone call on the 24th February 2022 when the Complainant inquired about his next salary payment and that he advised the Complainant that the Respondent had only just received the Court mandate to allow the Managing Director to have access to the Respondent’s bank accounts. He confirmed to the Complainant that no one in the Respondent was paid their salary that week and that he anticipated the payments to be made the following week. The Managing Director gave evidence that during the takeover of the Respondent’s accounts he noticed that the bank accounts were cleared out and that there were insufficient funds in the accounts to pay any salaries. He therefore questioned the Complainant as to what provisions he had arranged for salaries as a former director and he gave evidence that the Complainant argued that this was not his responsibility. The Managing Director stated that the Complainant had a fiduciary duty as a director and he believed that the Complainant failed to acknowledge the consequences of his actions which resulted in the examinership of the Respondent. The Managing Director stated that he advised the Complainant that the delay in payment was connected to his breach of his fiduciary duty as a director of the Respondent however he stressed that he never informed the Complainant that he would not be paid.

The Managing Director gave evidence that he was aware that the Complainant had resigned on the 28th February 2022 by writing and that he had provided four weeks’ notice and that the Director had accepted the resignation and requested the Complainant attend a meeting on the 7th March 2022. The Managing Director stated that he attended the meeting with the Complainant in the absence of the Director on the 7th March 2022 and that he discussed with the Complainant one of the Respondent’s projects. He alleged that the Complainant confirmed that he falsified receipts and stated that he immediately informed the Complainant that this amounted to fraudulent behavior and a deliberate breach and gross misconduct in accordance with Section 18.5 of his contract of employment. The Managing Director stated that he discussed other financial discrepancies with the Complainant at this meeting and that after the Complainant’s admittance of falsifying receipts he requested that the Complainant detail his wrongdoing in a letter format. He stated that the Complainant agreed to a further meeting to be set up on the 9th March 2022 whereby he would produce a letter detailing his wrongdoing as requested by the Managing Director. The Managing Director stated that the meeting on the 9th March 2022 was subsequently postponed by the Complainant due to a family emergency and thereafter postponed again on the basis of the Complainant would not meet until his wages were paid.

The Managing Director gave evidence that he was prepared to pay the Complainant on the 28th February 2022 and remained prepared to pay him until the 7th March 2022 but that after the Complainant gave him the salient information on the 7th March 2022 the Complainant’s wages were withheld because of wrongdoing on his part.

The Managing Director confirmed that in circumstances where the Complainant had resigned and given his four weeks’ notice the Respondent deemed the contractual relationship to be at an end and therefore it never invoked the disciplinary procedure. He stated that even if the Complainant had not resigned the Respondent would have been entitled to terminate the Complainant’s employment on foot of the Complainant’s disclosures and therefore the Complainant was not entitled to any payments for the notice period.

Concluding Submissions on behalf of the Respondent

The Respondent’s representatives confirmed that the Complainant’s wages were withheld because of wrongdoings on the part of the Complainant. They stated that they were relying on Sections 9, 18.3 and 18.5 of the Complainant’s contract of employment in defending of the complaints.

In relation to the Complainant’s wages for the month ending the 28th February 2022 the Respondent’s representatives submitted that it took a significant period of time to get the correct documents in order to allow them to be made signatories on the Respondent’s bank accounts. According to the Respondent’s representatives the Respondent’s bank accounts were not functional or operational in order to allow the new directors to remit monies. Up until the 7th March 2022 the Respondent’s representatives were prepared to pay the Complainant his wages however on the 7th March 2022 the fraud allegation came to light and therefore they stated the monies were not paid.

In relation to the holiday pay the Respondent’s representatives referred to Section 9 of the Complainant’s contract of employment and submitted that holidays must be taken in the year in which they accrued and that there were no exceptional circumstances permitting the Complainant to carry days over from 2021 to 2022 and even if there were exceptional circumstances, pursuant to Section 9.6 of the contract of employment, the number of days was capped at 5 days.

According to the Respondent’s representatives there was no communication, whether oral or writing, between the parties after the 10th March 2022 because all parties knew that the employment relationship was at an end as a result of the misconduct on the part the Complainant and therefore pursuant to Section 18.3 of the Complainant’s contract of employment he was not entitled to notice pay.

In making these findings, I have considered the documentation submitted by the parties, the oral evidence adduced at the hearing summarised above and the oral and written submissions made by and on behalf of the parties at the hearing.

Relevant Law:

Payment of Wages Act 1991

In considering whether the Complainant’s wages were the subject of an unlawful deduction as alleged, it is necessary to examine the relevant provisions of the Payment of Wages Act 1991 as amended (hereinafter referred to as “the 1991 Act”).

Section 1 of the 1991 provides the following definition of wages:

"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 above definition includes the pay, holiday pay and pay in lieu of notice.  The Complainant claims he is due is salary for the month ending the 28th February 2022, 5 days holiday pay, and payment for working four weeks after giving notice of his resignation or in the alternative pay in lieu of notice.

Section 5 of the 1991 Act serves to regulate certain deductions made and payments received by employers.  

Section 5(1) of the 1991 Act provides as follows:

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.

Section 5(2) of the 1991 provides that:

5(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.

Section 5(6) of the 1991 Act addresses the circumstances in which wages which are properly payable are not paid:

5(6) 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.

The non-payment of wages that are properly payable to an employee is therefore an unlawful deduction by the employer.  The question to be decided is whether the wages claimed were properly payable.

The Complaints

CA-00052395-001

This complaint related to the alleged non-payment of wages for the month ending on the 28th February 2022 and for the non-payment of 5 days’ holiday pay.

Wages for the month ending on the 28th February 2022

The Complainant gave  evidence that he commenced employment with the Respondent on the 23rd July 2018 as a Construction Project Manager. It was accepted that he was paid on a monthly basis and that his net monthly pay was €3,784.00.   

It was common case that in November 2021 joint examiners were appointed to the Respondent by Order of the Circuit Court. The Complainant gave evidence that on the 15th February 2022, prior to the scheme of arrangement being put in place, he met with the Director to discuss his future with the Respondent. The Complainant stated that from the outset it was a very uncomfortable meeting and that he felt unsure of his future with the Respondent. The Director gave evidence that he was surprised that the Complainant felt his future with the Respondent was unsure particularly given the Complainant knew the full internal workings of the Respondent and that he advised the Complainant that his employment with the Respondent was secure for two to four months at least. The Complainant also met with the Managing Director on the 15th February 2022 who the Complainant believed would be running the operations of the Respondent. The Complainant described the meeting as being hostile and that during the course of the meeting the Managing Director requested that the Complainant return to his office on the 18th February 2022 with hard copy file of the Respondent.

On the 18th February 2022 a scheme of arrangement was approved by the Circuit Court and the Respondent exited Examinership and new management assumed control over the Respondent. It was common case that the outgoing directors, which included the Complainant as a non-shareholding director, were removed and a new Board of Directors was appointed which included the Director and the Managing Director.

The Complainant stated that on the 18th February 2022 he attended the Managing Director’s office with the requested files and that he agreed to meet with the Managing Director again that day. The Complainant and the Managing Director discussed the Complainant’s salary and the date of payment each month of  his salary and  the Managing Director requested that the Complainant forward his personal details, including his bank details, to the Respondent’s Chief Financial Officer, in order to facilitate future salary payments which the Complainant duly did by email dated the 20th February 2022.

The Complainant gave evidence that on the 24th February 2022 he contacted the Respondent’s Chief Financial Officer to confirm that she had received his bank details and to query when his February 2022 salary payment would be paid. He stated that the Chief Financial Officer advised him that he needed to contact the Managing Director regarding his salary payment.

It was common case that on the 24th February 2022 the Complainant spoke with the Managing Director who advised the Complainant that he had only just received the Court mandate to allow him to take control of the Respondent’s bank accounts and that while he did not foresee the Complainant’s salary payment being made on the 24th or 25th February 2022, it would be paid by the following week. It was common case that the Managing Director queried what provision the Complainant had made for salaries as a former director of the Respondent and the Complainant stated that he informed the Managing Director that the payment of salaries was not his role or responsibility within the Respondent. While the Managing Director took issue with the Complainant’s assertion that salaries were not the Complainant’s role or responsibility, he confirmed in oral evidence the contents of his written statement dated the 2nd February 2023 wherein he stated that “I wish to make it clear that I never told the Complainant that he would not be paid”.

On the 25th February 2022 the Complainant received an e-mail with his pay slip for the month of ending the 28th February 2022 which stated that his salary would be paid by credit transfer on the 28th February 2022. It was accepted by the Respondent that the Complainant’s salary was not transferred to him on the 28th February 2022.

It was common case that the Complainant engaged in Whatsapp communication with the Director who informed the Complainant on the 3rd March 2022 that his salary payment for the period ending the 28th February 2022 would be paid by the following Monday.

It was accepted by the Respondent that despite assurances that the Complainant’s salary for the month ending the 28th February 2022 would be paid to him the payment was never made by the Respondent to the Complainant.

The Complainant submitted that the non-payment of his wages was an unlawful deduction and in breach of Section 5 of the 1991 Act.

In their written statements dated the 2nd February 2023 submitted to the WRC in advance of the hearing the Director and the Managing Director both stated that “[w]hen the new management assumed control of the Company, falsified receipts were discovered, and someone had to be confronted and be accounted for the fraudulent behaviour.” It was submitted by the Respondent that the Complainant was the “someone” confronted and that in circumstances where, according to the Respondent, he admitted on the 7th March 2023 to falsifying receipts he was the individual who accounted for the fraudulent behaviour and any wages due and owing to him were withheld by the Respondent. In their aforementioned written statements the Director and the Managing Director submitted, by way of defence to the Complainant’s complaint, that the non-payment of the Complainant’s wages was fair, reasonable and proportionate and that the non-payment of wages was a lawful deduction being made by way of compensation for damage suffered to the Respondent as a result of the actions of the Complainant and that  the deduction did not exceed the amount of loss suffered by the Respondent. However I note that the Respondent failed to produce any evidence of the alleged damage suffered by the Respondent as a result of the actions of the Complainant and failed to produce any evidence of the amount of loss allegedly suffered by the Respondent apart from an unsubstantiated statement in the written statements dated the 2nd February 2023.

The Complainant gave evidence that by email dated the 28th February 2022 the Director requested a meeting with the Complainant upon his return from annual leave on the 7th March 2022 stating that “there is a series of information that will be needed from you before your departure and there will also be some form to fill and documentation to be provided… During the meeting we will also go through the details regarding your termination.” I note that there was no reference in the email to any alleged wrongdoing on the part of the Complainant or that the purpose of the meeting was to investigate any alleged wrongdoings and/or acts or omissions on the part of the Complainant. 

The Complainant attended the meeting on the 7th March 2022 however instead of meeting with the Director as he understood would be the case the Complainant met with the Managing Director. According to the Complainant the meeting was hostile and he felt threatened. He gave evidence that he did not understand the accusations of wrongdoing levelled against him and he denied admitting at the meeting on the 7th March 2023 to falsifying receipts. The Managing Director accepted that it may have been a difficult meeting for the Complainant however he denied that he threatened the Complainant or that the Complainant did not understand the allegations of wrongdoing. The Managing Director gave evidence that he informed the Complainant that his fraudulent behaviour was considered a deliberate breach and gross misconduct in accordance with Section 18.5 of his contract of employment and at the hearing before the WRC the Respondent relied on the provisions of Section 18.5 in asserting that the non-payment of the Complainant’s wages was a lawful deduction arising from an act or omission on the part of the Complainant.

Given its brevity it is worth noting that the contents of Section 18.5 of the Complainant’s contract of employment which provides as follows:

“Section 18 Termination of Employment

18.5 Nothing this contract prevents us from terminating your employment summarily or otherwise in the event of any serious breach by you of the terms of your employment or in the event of any act or acts of gross misconduct by you.”

Notwithstanding the Respondent seeking to justify the non-payment of the Complainant’s wages on the basis of an alleged act or acts of gross misconduct, I find it noteworthy that no reference was made to the Respondent’s Disciplinary Rules and Procedure and the said procedure was not produced in evidence before the WRC.

In response to a query raised by the Adjudication Officer the Respondent accepted that it did not  invoke the Respondent’s Disciplinary Rules and Procedures, that the meeting on the 7th March 2022 was not a disciplinary meeting and that there was no finding of guilt for any act or omission or acts of gross misconduct on the part of the Complainant arising from any procedure. It was also accepted by the Respondent that it did not communicate with the Complainant in writing regarding the allegations of wrongdoing nor did the Respondent set out in writing particulars of the act or omissions on the part of the Complainant and the amount of loss and the amount of the deduction.

In circumstances where it was common case that the Complainant resigned from his employment on the 28th February 2022 with his four week’s notice commencing on that date as opposed to the Respondent terminating the Complainant’s employment, whether summarily or otherwise, and in circumstances where the Respondent confirmed that the alleged wrongdoing did not come to light until the 7th March 2022 being seven days after the Complainant’s wages were to be transferred by way of credit transfer into his account and that it did not invoke its disciplinary rules and procedure I find that Section 18.5 of the Complainant’s contract of employment does not afford the Respondent a defence to the non-payment of the Complainant’s wages.

Taking account of the evidence of the Complainant and the witnesses on behalf of the Respondent and the oral submissions and documentation presented on behalf the parties I find that there was no evidence before me that the deduction for the act or omission of the employee in this case was authorised by a term in the contract of employment nor was there evidence that a copy of the term or notice in writing of the existence and effect of the terms was furnished to the Complainant. Furthermore, there was no evidence before me that the Respondent furnished to the Complainant at least one week before the making of the deduction particulars in writing of the act or omissions and the amount of the deduction.

In all the circumstances I find that the Complainant’s complaint is well-founded and I find that the wages which were properly payable to the Complainant were unlawfully deducted from his wages in breach of Section 5 of the 1991 Act. This amounts to the net sum of €3,784.00 as an unlawful deduction of wages for which there was no consent.

Holiday Pay

The Complainant submitted that the Respondent failed to pay him his outstanding holiday pay of 5 days’ pay on the termination of his employment and that the non-payment of his wages was an unlawful deduction and in breach of Section 5 of the 1991 Act.

The Complainant gave evidence that as a result of the Covid-19 pandemic the Respondent consented to the Complainant carrying over 15 days holidays from 2021 to 2022. The Complainant stated that he advised the Court appointed examiner that he had an outstanding holiday entitlement of 15 days and that he intended taking 10 days holidays the commencing the week of the 21st February 2022. On the 18th February 2022 he advised the Director of his intention to take 10 days annual leave of the 15 days carried over from 2021 commencing on the 21st February 2022 and he stated there was no objection from the Director. The Complainant emailed the Respondent’s Chief Financial Officer on the 20th February 2022 to confirm that “I am carrying over 15 days annual leave from 2021 and I am taking 10 of those days over the next 2 weeks.” It was common case that the Complainant did not receive a reply to the said email and on the 21st February 2022 he commenced his 10 days’ annual leave. 

The Director confirmed that the Complainant informed him at the meeting on the 15th February 2022 that he would be taking 2 weeks’ annual leave commencing on the 21st February 2022 and he further confirmed that the annual leave was notified to the Court appointed examiner during the Examinership.

Having considered the evidence of the Complainant and the witnesses on behalf of the Respondent and the oral submissions and documentation presented on behalf of the parties I find that at all material times the Respondent was aware that the Complainant carried over 15 days holidays from 2021 to 2022 and that having taken 10 days holidays from the 21st February 2022 to the 4th March 2022 inclusive that the Complainant had 5 days holidays remaining.

In their written statements dated the 2nd February 2023 submitted to the WRC in advance of the hearing the Director and the Managing Director submitted that the non-payment of the Complainant’s wages was fair, reasonable and proportionate and that the non-payment of wages was a lawful deduction being made by way of compensation for damage suffered to the Respondent as a result of the actions of the Complainant and that  the deduction did not exceed the amount of loss suffered by the Respondent. However I note that the Respondent failed to produce any evidence of the alleged damage suffered by the Respondent as a result of the actions of the Complainant and failed to produce any evidence of the amount of loss allegedly suffered by the Respondent apart from an unsubstantiated statement in the Director and Managing Director’s written statements dated the 2nd February 2023.

It is noteworthy that this was not the defence advanced by the Respondent at the hearing before the WRC.

At the hearing before the WRC the Respondent submitted that pursuant to Section 9 of the Complainant’s contract of employment, at the date of the termination of his employment, there was no holiday entitlement due and owing to the Complainant. The Respondent submitted that in accordance with Sections 9.2 and 9.3 of the Complainant’s contract of employment the Complainant was only entitled to four days annual leave, being the annual leave which had accrued between the 1st January 2022 and the 28th February 2022, and that in circumstances where he had taken 10 days annual leave in February 2022 he had exceeded his holiday entitlement and there was no holiday pay due and owing to him.

Whilst I note that Section 9.6 of the Complainant’s contract of employment provides that holidays must be taken in the leave year in which they are accrued unless there are exceptional circumstances and that where exceptional circumstances arise only 5 days can be carried over and that the Respondent’s submission was that there were no such exceptional circumstances, I have had regard to the concession on the part of the Respondent’s representatives that they cannot confirm if there were in fact exceptional circumstances and their acceptance that they are not in a position to confirm the number of holidays taken by the Complainant in 2021 and 2022 or whether there was an agreement as alleged by the Complainant permitting the Complainant to carry over 15 days holidays from 2021 to 2022 as a result of the Covid-19 pandemic.  In any event, at no time prior to the hearing before the WRC was the Complainant informed by the Respondent that it was disputing the Complainant’s entitlement to carry over 15 days holidays from 2021 to 2022.

Taking account of the evidence of the Complainant and the witnesses on behalf of the Respondent and the oral submissions and documentation presented on behalf of the parties I find that the Complainant is entitled to 5 days’ holidays accrued and properly payable but not taken at the conclusion of his employment. This amounts to the net sum of €946 as an unlawful deduction of wages for which there was no consent.

Conclusion

In relation to the sums withheld from the Complainant for wages for the month ending the 28th February 2022 and payment of accrued but unused holidays I find that the following amounts were withheld as wages and are due to be paid to the Complainant:

The net sum of €3,783.00 for one month’s pay for the month ending the 28th February 2022

The net sum of €946.00  for 5 days holiday pay

I find the complaint to be well founded and I require the Respondent to pay to the Complainant the total net sum of €4,730.00.

CA-00052395-002

The Complainant claimed that he was due payment for working four weeks after giving notice of his resignation or payment in lieu of notice and that the non-payment of his wages was an unlawful deduction and in breach of Section 5 of the 1991 Act.

At the commencement of the hearing before the WRC the Complainant and the Respondent’s representatives confirmed the details set out in the Complainant’s WRC complaint form and in particular I note that the Respondent’s representatives agreed that the Complainant’s employment ended on the 28th March 2022.

By way of concluding submissions at the hearing before the WRC, while the Respondent accepted that the Complainant was on annual leave from the 21st February 2022 until the 7th March 2022 and that he attended work on the 7th March 2022 and engaged in communication with the Respondent following that meeting and that the Complainant’s four week’s wages were properly payable to him, the Respondent’s representatives submitted that the Respondent exercised the “absolute discretion” afforded to it pursuant to Section 18.3 of the Complainant’s contract of employment not to pay the Complainant in lieu of notice, that the Complainant’s employment therefore ended on the 28th February 2022 and that on that basis the non-payment of his four weeks’ notice pay was not an unlawful deduction.

Taking into consideration the documentation submitted by the Respondent in advance of the hearing, and in particular the written submissions of the Director and the Managing Director dated the 2nd February 2023 and the matters confirmed by the Respondent’s representatives at the outset of the hearing before WRC I find that the Respondent’s concluding submissions lacked credibility for the reasons set out hereunder.

It was common case that by email dated the 28th February 2022 the Complainant tendered his resignation in writing and that in accordance with his contract of employment he gave the Respondent the required four weeks’ notice, stating in writing “[i]n line with my contract of employment please accept this letter as commencing my four week notice period” and that by reply email dated the 28th February 2022 the Director, on behalf of the Respondent, accepted the Complainant’s resignation noting the Complainant’s four weeks’ notice and requesting that the Complainant attend a meeting with the Director upon his return from annual leave on the 7th March 2022.

It was also common case that that was the extent of the communication, whether oral or in writing, between the parties pertaining to the Complainant’s four weeks’ notice period.

At the hearing before the WRC the Respondent’s representatives relied on Section 18.3 of the Complainant’s contract of employment to justify the non-payment of the Complainant’s four weeks’ notice pay. Section 18.3 provides that:

“18.3 We reserve the right in our absolute discretion to pay you salary in lieu of notice.”

There was no evidence that the Respondent either agreed to waive the notice period or that the Respondent chose to exercise its rights under Section 18.3 of the Complainant’s contract of employment. Furthermore, there was no evidence that the Complainant’s contract of employment ended with immediate effect on the 28th February 2022. Therefore, I do not find it credible that the Respondent  did not pay the Complainant his four weeks wages because it was exercising rights under the Complainant’s contract of employment. In any event, I find the Respondent has incorrectly interpreted the meaning of Section 18.3 of the contract of employment. Section 18.3 of the Complainant’s contract of employment does not give the Respondent an absolute discretion to summarily dismiss the Complainant nor does it give the Respondent an absolute discretion to refuse to pay the Complainant during his notice period. I find that the “absolute discretion” provided in Section 18.3 is a discretion absolutely afforded to the Respondent as to whether to pay the Complainant his four weeks wages without requiring the Complainant to work out his notice or requiring the Complainant to work out his notice period.

An alternative defence was advanced by the Respondent prior to the hearing before the WRC which the Respondent also sought to rely on at the hearing. In their written statements dated the 2nd February 2023 submitted to the WRC in advance of the hearing the Director and the Managing Director both stated that “[w]hen the new management assumed control of the Company, falsified receipts were discovered, and someone had to be confronted and be accounted for the fraudulent behaviour.” It was submitted by the Respondent that the Complainant was the “someone” confronted and that in circumstances where, according to the Respondent, he admitted on the 7th March 2023 to falsifying receipts he was the individual who accounted for the fraudulent behaviour and any wages due and owing to him were withheld by the Respondent. In their aforementioned written statements the Director and the Managing Director submitted, by way of defence to the Complainant’s complaint, that the non-payment of the Complainant’s wages was fair, reasonable and proportionate and that the non-payment of wages was a lawful deduction being made by way of compensation for damage suffered to the Respondent as a result of the actions of the Complainant and that  the deduction did not exceed the amount of loss suffered by the Respondent. However I note that the Respondent failed to produce any evidence of the alleged damage suffered by the Respondent as a result of the actions of the Complainant and failed to produce any evidence of the amount of loss allegedly suffered by the Respondent apart from an unsubstantiated statement in the written statements dated the 2nd February 2023.

The Complainant gave evidence that he did not understand the accusations of wrongdoing being levelled against him and he denied that he agreed to the truth of the allegations.

Notwithstanding the Respondent seeking to justify the non-payment of the Complainant’s wages on the basis of an alleged act or acts of gross misconduct, I find it noteworthy that no reference was made to the Respondent’s Disciplinary Rules and Procedure and the said procedure was not produced in evidence before the WRC.

In response to a query raised by the Adjudication Officer the Respondent accepted that it did not  invoke the Respondent’s Disciplinary Rules and Procedures, that the meeting on the 7th March 2022 was not a disciplinary meeting and that there was no finding of guilt for any act or omission or acts of gross misconduct on the part of the Complainant arising from any procedure. It was also accepted by the Respondent that it did not communicate with the Complainant in writing regarding the allegations of wrongdoing nor did the Respondent set out in writing particulars of the act or omissions on the part of the Complainant and the amount of loss and the amount of the deduction.

Taking account of the evidence of the Complainant and the witnesses on behalf of the Respondent and the oral and written submissions presented on behalf the parties I find that there was no evidence before me that the deduction for the act or omission of the employee in this case was authorised by a term in the contract of employment nor was there evidence that a copy of the term or notice in writing of the existence and effect of the terms was furnished to the Complainant. Furthermore, there was no evidence before me that the Respondent furnished to the Complainant at least one week before the making of the deduction particulars in writing of the act or omissions and the amount of the deduction.

In all the circumstances I am satisfied that the Complainant did not receive his entitlement to four weeks notice or payment in lieu of noticed. I find that the Complainant’s complaint is well-founded and I find that the wages which were properly payable to the Complainant were unlawfully deducted from his wages in breach of Section 5 of the 1991 Act. This amounts to the net sum of €3,784.00 as an unlawful deduction of wages for which there was no consent.

CA-00052395-001

I decided that the complaints are well founded, for the reasons set out above, and I direct the Respondent to pay to the Complainant the net sum of €3,784 in respect of his salary for the month ending 28th February 2022 and the net sum of €946 in respect of outstanding holiday pay for the unlawful deduction of wages properly payable to the Complainant. The total net sum payable is €4,730.

CA-00052395-002

I decided that the complaint is well founded, for the reasons set out above, and I direct the Respondent to pay the net sum of €3,784.00 for the unlawful deduction of wages properly payable to the Complainant.