FULL RECOMMENDATION
SECTION 7(1), PAYMENT OF WAGES ACT, 1991 PARTIES: AER LINGUS (REPRESENTED BY TOM MALLON B.L., INSTRUCTED BY ARTHUR COX SOLICITORS) - AND - MS ELIZABETH BARRY (REPRESENTED BY LEANORA FRAWLEY B.L., INSTRUCTED BY KOD LYONS SOLICITORS) DIVISION:
SUBJECT: 1.Appeal of Adjudication Officer Decision No(S). ADJ-00029679 CA-00040189-001
DETERMINATION: Background. The Complainant, according to her submission to the Court, commenced her employment in 1991. It is common case that a global pandemic affected the operation of the Respondent throughout the cognisable period for the within complaint which is 1stApril 2020 to 30th September 2020; which latter date was the date the complaint was received by the Workplace Relations Commission. It is not disputed that the effect of the pandemic on the business of the Respondent was to reduce operational activity by more than 80% in the period which is material to the within complaint. It is also common case that in response to the impact of the global pandemic on its business the Respondent implemented hours and salary changes in March 2020, not only upon the Complainant but upon the entire workforce at every grade and level of the Respondent. It is common case that the Complainant was paid in respect of every hour she worked throughout the cognisable period for the within complaint. It is also common case that the effect upon the Complainant during the cognisable period for the within complaint of her reduced pay which reflected her reduced working hours was that she was paid €21,668 less than she would have been paid had the Respondent not reduced her working hours and her pay. It is common case that the reduction in working hours at the material time was such as to correspond with the definition of ‘short time’ working contained in the Redundancy Payments Act, 1967 in that her working hours were reduced to less than 50% of her contracted working hours. The Law The Act at Section 5(1) provides as follows:
(6) Where
Lay-off and short-time.
The Complainant submitted that she suffered a loss of €21,668 in the six-month period to the date of making her complaint. She submitted that her contract of employment does not make provision for the Respondent to reduce her working hours or to reduce her pay. Other employees who were employed after her had contracts of employment which do provide for ‘lay-off’. No effort was made by the Respondent to lay off those who had a ‘lay-off’ provision in their contract and to maintain the Complainant in her employment in accordance with her contract of employment. Under section 6 of the Act a deduction can only be consented to by an employee by giving consent in writing which she did not do. She submitted that there is no statutory document made or any instrument made under statute which would have allowed the Respondent to make any deduction and therefore in those circumstances the deduction was an unlawful deduction from her wages. Summary position of Respondent The Respondent submitted that, as a direct response to COVID 19, it was compelled to implement hours and salary changes in March 2020 not only to the Complainant or cabin crew generally, but across the board, impacting everyone in Aer Lingus at every grade and level in the organisation. The COVID 19 pandemic had an unprecedented global impact on air travel. The pandemic and resulting travel restrictions reduced the Respondent’s operations to a level at or below 20% of normal levels throughout the cognisable period for the within compliant. The Respondent’s revenues, including those accruing from forward bookings, were similarly affected throughout the period. It was the Respondent’s policy during this unprecedented period to avoid implementing redundancies and extended lay-offs with a view to maintaining employees on the payroll, albeit with reduced working hours and pay. The existence of a pandemic with huge adverse effects on air travel leads to an implied term entitling the airline to reduce hours of work consistent with its very limited demand. The implied term facilitated the reduction in a need for lay-offs and involuntary redundancies. The Complainant’s pay was consistently more than what she would have received had it been directly aligned to the number of hours she actually worked over the relevant roster period. While operational staff were notionally rostered and paid at 50% of their underlying contract, the reality of the work requirement upon the Complainant was significantly less than that. With effect from June 2020, operational employees, including the Complainant, had their work requirements reduced to 30% of their underlying contract. The Respondent communicated throughout from April 2020 to the Complainant and all employees to the effect that their working hours and pay would be reduced. The Respondent was open and transparent with staff and engaged continually with internal stakeholders throughout, including with trade unions representing staff. The Respondent had an implied right to reduce hours and pay and/or to lay employees off without pay as an alternative to redundancy in circumstances of economic downturn or financial hardship for example. The collapse in air travel brought about by the existence of the pandemic and multi-Government interventions both in respect of those leaving countries and arriving in countries must lead to a reasonable interpretation that the contract of employment can either be temporarily suspended or reduced. The implied term does not just arrive in custom and practice because there is of course no custom in which one can have for a comparable set of factors. The Respondent referred to the decision of an Adjudication Officer inAn employee v an Employer PW674/2012where the AO noted
The Respondent submitted that the change in the Complainant’s pay throughout the cognisable period was a reduction rather than a deduction within the meaning of the Act. At the hearing however, the Respondent did not contend that this was a ground for disposal of the appeal. The Respondent submitted however that the decision of the Adjudication Officer in the within complaint that an acceptance of a reduction in pay and working hours by 99.95% of all staff of the Respondent at the material time for the within compliant amounted to custom and practice for pandemic circumstances. Discussion and conclusions The High Court inMarek Balans v Tesco Ireland Limited [2020] IEHC 55,made clear that this Court, when considering a complaint under the Act, must first establish the wages which were properly payable to the employee on the occasion before considering whether a deduction had been made. That matter having been addressed; it is for the Court to determine whether the wages actually paid on the occasion were less than the wages which were properly payable on the occasion. If the wages actually paid were less than the amount properly payable, then the difference could be concluded to be a deduction within the meaning of the Act. If it is established that a deduction within the meaning of the Act had been made from the wages properly payable on the occasion, the Court would then consider whether that deduction was lawful. It is common case that the contract of employment of the Complainant comprises a written contract and whatever collective agreements are concluded from time to time between the Complainant’s Trade Union and the Respondent. The contract of employment so comprised specifies the working hours and rate of pay of the Complainant. The Court therefore concludes that the contract of employment in place, including the terms of relevant collective agreements, establish the rate of pay which were properly payable to the Complainant in any week during the material time for the within complaint. It is common case that, during the cognisable period for the within complaint, the Complainant was paid €21,668 less than the amount provided for in her contract of employment. The Act, at Section 5(6), provides that where 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 to the employee on that occasion, 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. There is no submission before the Court contending that the difference between wages actually paid to the Complainant and the wages which were properly payable to her on the occasion was attributable to an error of computation. The Court therefore concludes that the difference was a deduction within the meaning of the Act. The Act at Section 5 prohibits an employer from making a deduction from the wages of an employee unless the deduction (a) is required or authorised to be made by virtue of any statute, (b) is required or authorised to be made by virtue of a term of the employee's contract of employment or (c) the employee has given his prior consent in writing to it. There is no contention before the Court that the deduction made from the wages of the Complainant on the occasion was required or authorised by statute or that the Complainant had given her prior consent in writing to the deduction. The Respondent however contends that the deduction was authorised by an implied term of the contract of employment which permitted the Respondent to unilaterally reduce the working hours and / or pay of the Complainant in a circumstance of economic downturn or financial hardship for example. In support of that contention the Respondent asked the Court to rely upon a decision of an Adjudication Officer inAn employee v an Employer PW674/2012whichadopted the ratio of the decision inBrowning and Others v Crumlin Valley Collieries (1926) 1 KB 698. This Court should normally follow its own decisions and must follow the decisions of higher Courts. Decisions of Adjudication Officers however are not normally authority upon which this Court can rely. Notwithstanding that the Court should not normally rely upon the first instance decisions of an Adjudication Officer, the Court is compelled to state that the decision in Browning, which was that the contract of employment of miners contained an implied clause to the effect that a mine owner could lay off miners without pay while effecting repairs which did not arise as a result of a fault on the part of the mine owner, is not, in the view of the Court, authority for the proposition that the protections afforded to workers by the Act can be unilaterally set aside by the employer in certain circumstances. The Act sets out the specific circumstances where a deduction from the wages of an employee can be lawful. It is the Court’s view, having regard to the fact that the pay of an employee is a fundamental element of the contract of employment, that it cannot have been the intention of the Oireachtas that a power would be afforded to an employer, who is party to the detailed terms of a written contract of employment and, as in this case, to relevant collective agreements, can be understood to be empowered to avail of an unwritten implied term which would undermine key aspects of the written contract itself. The Court, while noting that it is short time working and not lay off which occurred in the within matter, notes the ratio of the decision of the EAT inStefan Chmiel and others v Concast Precast Limited [PW 725 / 2012] where it was held that
In summary therefore, the Court does not accept that the contract of employment of the Complainant, at the material time, contained an implied right on the part of the Respondent to reduce her pay below that set out in her contract. In the view of the Court, any such contractual provision would require to be explicitly expressed and clear in meaning and intent in order for it to be taken as removing from the Complainant the protections afforded by the Act at Section 5(1). The Court therefore concludes that the impugned deduction from the wages properly payable to the Complainant was, within the meaning of Section 5 of the Act, not required or authorised to be made by virtue of a term of her contract of employment. The Court concludes therefore that a deduction within the meaning of the Act occurred as contended for by the Complainant and that this deduction from the wages properly payable to her on the occasion was unlawful and that, consequently, the within Complaint is well founded. Decision The Act at Section 6 in relevant part provides as follows:
The relevant undisputed circumstances set out to the Court in the within matter include:
It is clear and undisputed that the global health pandemic resulted in an unprecedented impact on the conduct of business and normal social and economic life in this jurisdiction and across the globe. Similarly, the impact of the pandemic was unprecedented in terms of its severe negative impact upon the business of the Respondent and upon the workers employed by the Respondent. It is clear and undisputed that the Respondent took considerable steps to protect its business while avoiding involuntary redundancies. It is also clear and undisputed that the steps taken by the employer were applied evenly across the workforce and were, in the unprecedented circumstances which prevailed, acceptable to the vast majority of the entire workforce. The Court therefore concludes in line with an earlier decision inCaitriona Jones v Aer LingusPWD2248, that the amount of compensation which is reasonable in the combination of all of the circumstances present and giving rise to this complaint is nil. The decision of the Adjudication Officer is set aside. The Court so decides.
NOTE Enquiries concerning this Determination should be addressed to Ceola Cronin, Court Secretary. |
