Complainant

Respondent

Parties

Jaroslaw  Sikorski

Prl Group Unlimited Company

Representatives

  Independent Workers Union (IWU)

IBEC

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-00049235-001

16/03/2022

The Complainant is employed by the Respondent company as a professional driver, and has been, since 2012.

This case centres on the payment of €60 for a ‘Certificate of Professional Competence’ (CPC) course, in October 2021, the completion of which is a legal requirement for professional drivers since 2009.

It is the Complainant’s case that the Respondent employer should pay for the course, and that, in the past, did pay for the course. It is the Complainant’s position that the Respondent company sought to unilaterally alter a term and condition of his employment, that he did not consent to the proposed change and that its implementation therefore constitutes an unlawful deduction from his wages. The Complainant, in response to this proposed change, raised a grievance and exercised his right to appeal, exhausting all internal remedies, prior to instituting Workplace Relations Commission (WRC) proceedings.

The Respondent’s position is that the Complainant has no entitlement to the employer covering that cost contractually or otherwise, and further, that the €60 constitutes an ‘expense’ within the meaning of the Payment of Wages Act 1991 and is therefore expressly excluded from the definition of wages, and consequently could not constitute ‘wages properly payable’ within the meaning of the Payment of Wages Act 1991. The Respondent’s position is that it sought to implement a change in policy, which did not form part of the Complainant’s contractual terms of employment and that it notified the employee of the upcoming change orally – and that, therefore, no outstanding monies are owed.

The Complainant’s representative opened his case by saying that this case was about the principle, rather than the specific economic amount of €60 which represents the cost of the CPC training course the Complainant had to undertake.

He also raised the issue of the cost of attending the WRC hearing for the Complainant – that he had to take a day off/unpaid holidays in order to attend the WRC hearing. The Adjudication Officer clarified at the hearing that the WRC has no jurisdiction with respect to costs.

The Complainant gave evidence that the CPC course was a legal requirement for professional drivers. He said that he had previously worked doing the same job for another company, in Ireland. He stated that the CPC course came in as a legal requirement in Ireland in 2009; and that when he initially joined the Respondent, the Respondent company had paid for the course by directly paying the company providing the course. He said the last time this happened was February 8th, 2015.

He said that this then changed to a system whereby he was asked to pay for the course himself by his employer, and that on the production of a receipt, he would be paid by his manager out of petty cash, which occurred.

He explained that he needed the CPC certification in order to do his job and he likened it to other things paid for by his employer in order to do his job – fuel, tolls, manual handling training, pallet truck training, fire safety training. He emphasised that the cost had been paid each time in the past.

On cross-examination, it was put to the Complainant that his contract – the 2012 contract which was in force, at the time – was silent on the issue of paying for the CPC course, which he accepted.

It was put to him that he was told the practice of paying for the course was ceasing, which he accepted. He said that there was a new manager who brought in changes and ‘nobody wanted those changes’ as it ‘cost our pockets.’

He was asked whether he accepted that it was an ‘expense.’ He agreed that he did. (However, I am mindful that English is the witness’s second language).

He was asked about the fire safety and manual handling courses and whether he understood the distinction in those instances, i.e., that the employer is legally obligated to provide and pay for them. The Complainant in response emphasised the cost of living and the principle of the matter. He said that the CPC course had been paid for by the employer, from the very beginning.

In response to some requests for clarification from the Adjudication Officer at the hearing, the Complainant said that 2019 was the last time the course had been funded by the company. In 2020, he was not required to undertake a course. In 2021, he was informed approximately one (1) month before undertaking the course, by Mr. Higgins, his manager in response to a query from the Complainant, that the course would not be funded by the Respondent company. He said Mr. Higgins did not know the answer to his question when he asked it, and had to check with the company, and subsequently came back to him with a response.

He was asked, on cross-examination whether he accepted that he had no contractual right to have the CPC course paid by his employer. The Complainant said ‘yes.’

‘The qualification allows you to be a (professional) driver?’ He said ‘Yes.’

He was asked whether he had submitted a grievance. He said ‘Yes.’

He was asked whether he had exhausted all internal remedies. He said ‘Yes.’

Concluding remarks for the Complainant

The Complainant’s representative said that the question was: ‘Is it an expense or a discretionary payment?’; that ‘it was for a training course, and reasonable to view it as a wage.’; that while there was no written mention of it anywhere, ‘really, it was paying or covering some payment’ and therefore, it was ‘reasonable to view it as an agreement.’ It was ‘a verbal agreement’; that in the past the company had paid it directly, then (due to some payment issues with the third-party company providing the course) employees had been asked to pay it themselves and then to be re-imbursed if they produced the receipt. He requested that the WRC issue a decision viewing the payment as part of wages. He asserted there were many WRC cases where this had been done.

The Respondent’s representative opened his case by saying that the claim submitted for adjudication by the Complainant was that a deduction had been made from wages, within the meaning of s. 6 of the Payment of Wages Act. However, no deduction had occurred. The €60 represents an expense within the meaning of the legislation, and, as such, is not ‘properly payable.’

The Respondent called one witness - Mr Gordon Higgins, the Operations Manager for the Respondent company, and the Complainant’s most recent line manager.

The witness gave evidence that the Complainant had been informed of the change on a number of occasions by the Respondent company, and in fact, the change pre-dated the witness taking up his post as operations manager. He highlighted a contemporaneous note of a grievance meeting from February 7th, 2022, which reflected that the Complainant had acknowledged that he had been informed of the incoming change, by his previous manager (PC), which had been submitted to the WRC.

The witness said that in his view, it was ‘not wages’, it was ‘an expense’ and that he, himself, had ‘never carried out that practice’ [of paying the workers out of petty cash to re-imburse them for the price of the CPC course.]

Under cross-examination, the witness distinguished the other types of courses (manual handling, fire safety etc.) on the basis that the company was legally obliged to provide those courses as a matter of health and safety, from the instant case.

It was put to the witness, on cross-examination, that written notification should have been provided and the consent of the employee should have been obtained. The witness stated that he felt that notice had been given. He said it was a change that had ‘already happened’ before his time, in the role, and that it was ‘not his place to issue written notification.’

Concluding remarks for the Respondent

The Respondent’s representative stated that the claim was submitted under s. 6 of the Payment of Wages Act 1991 but that the sixty (60) euro is an expense; that on cross-examination, the Complainant accepted that it was an expense. He also emphasised the evidence of the Respondent’s witness. He concluded by stating that ‘any payment in respect of expenses is not deemed to be properly payable wages.’

The burden of proof is on the Complainant, and it is on the balance of probabilities.

Contract

Under s. 1(1) of the Payment of Wages Act 1991, a ‘contract of employment’ is interpreted to include:  a contract ‘whether the contract is express or implied and if express, whether it is oral or in writing.’ (emphasis added)

Wages

Under s. 1(1) of the Payment of Wages Act 1991, ‘wages’ is defined as follows: “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 employmentor otherwise.’ (emphasis added)

Thereafter, follow five exclusions from the definition of wages under the Act, the relevant one for the purposes of this case being: ‘any payment in respect of expenses incurred by the employee in carrying out his employment.’ (emphasis added)

Simply put, a term of a contract of employment for the purposes of the Payment of Wages Act 1991 can be express or implied; and an express term of a contract of employment can be verbal or written. Wages – sums payable to the employee on foot of his employment, as defined under the Act – can arise under a contract of employment, or otherwise. Payments made to an employee by an employer to cover expenses incurred by the employee in the course of his work do not constitute wages for the purposes of the Payment of Wages Act 1991.

The Respondent has sought to rely upon two things – the written terms of the 2012 contract of employment which is silent in respect of the payment, as meaning that the Complainant has no contractual entitlement to the payment; and secondly, the characterisation of the payment for CPC training as an ‘expense’ and thus an exclusion from ‘wages’, as defined, and therefore from wages ‘properly payable’ under the s. 5 of the Payment of Wages Act 1991.

It falls to me to determine: 1. Is the payment covered by the terms of the employee’s contract of employment or otherwise and 2. If it is encompassed in the employee’s contract of employment, does it constitute ‘wages’ ‘properly payable’ within the terms of the Payment of Wages Act 1991.

1.       Is the payment included in the terms of the Complainant’s contract of employment?

The Respondent company is seeking to rely upon the written 2012 contract as accurately representing, reduced to writing, the totality of the contractual terms and conditions of the Complainant’s employment. However, having considered the 2012 contract which was submitted as being in force at the time, I note that it does not accurately capture the Complainant’s terms and conditions of employment. In particular, I note that the 2012 contract incorrectly cites a piece of legislation from which the Complainant’s employment is specifically exempt as it is subject to a stricter form of specific regulation (the Organisation of Working Time Act 1997 V. the applicable Mobile Worker Regulations). Thus, the 2012 contract cannot be said to accurately describe the terms and conditions of the Complainant’s employment.

I also note that the 2012 contract is silent with respect to the funding of CPC training despite the fact that it is common case that the Respondent company funded the mandatory CPC training, as a matter of course, over a period of several years; and it is common case that for many years this was done by re-imbursing the Complainant out of petty cash for the cost of the course on production of a receipt, up until the point in time when the Respondent company sought to alter the practice.

As an aside, at the adjudication hearing, the Complainant gave uncontested oral evidence that the Respondent company funded the CPC course directly for a period of time. This is in conflict with the company’s note of the grievance meeting of February 7th, 2022, in which it has written: JS [the Complainant] believes at one point there was discussion that PRL would pay directly for this course but that never came to fruition. JS refers to a conversation he had with IOC [previous manager] where IOC advises, PRL (the Respondent company) will no longer reimburse for the CPC course “as it is too much work and too expensive for them to continue paying.” In any event, it is common case that for many years the Respondent company consistently funded the cost of the course, by way of re-imbursement on the production of a receipt.

I am guided by the approach taken by the Supreme Court in McKelvey V Iarnrod Éireann/Irish Rail [2019] IESC 69 and the approach taken by the Court of Appeal in O’Donovan V Over-C Technology Ltd & Anor [2021] IECA 37 in relation to the interpretation of employment contracts. I am cognisant of the power imbalance between the employee and the employer, and mindful that employment contracts should be strictly construed as against the commissioning party, i.e. the employer, in this instance.

I have carefully examined both the evidence and the submissions made by the parties and have directed my mind to the relevant law in this area. It falls to me to determine whether the funding of the mandatory CPC course, whether by re-imbursement or otherwise, became an implied term of the employee’s contract, by virtue of the creation of ‘a reasonable expectation’ on the part of the employee on foot of a ‘custom and practice’ instituted by the consistent behaviour of the employer, over a period of years. I find that it did.

2.       Does the payment constitute ‘wages’ or an ‘expense’ as defined within the Payment of Wages Act 1991?

Secondly, in light of the fact that I find that the funding of the mandatory CPC course, whether by re-imbursement or otherwise, became an implied term of the employee’s contract, it falls to me to determine whether that term constitutes ‘wages’ ‘properly payable’ or an ‘expense’ (which is an exclusion), within the meaning of the Payment of Wages Act 1991.

I find that it constitutes an expense ‘incurred by the employee in carrying out his employment’, such as fuel or tolls, which may be funded directly by an employer or for which an employee may be re-imbursed by an employer, that re-imbursement not being subject to income tax.

I therefore find that the sum of €60 (the cost of the CPC course) constitutes an ‘expense’ under the Payment of Wages Act 1991 and not ‘wages’ and thus is excluded from wages ‘properly payable’ within the meaning of the Payment of Wages Act 1991.

CA-00049235-001: I find that this claim is not well-founded.

I find that the funding of the cost of the mandatory CPC course by the Respondent, through re-imbursement or otherwise, is an implied term of the Complainant’s contract of employment.

I find that the term constitutes an ‘expense’ within the meaning of the Payment of Wages Act 1991 and therefore does not constitute ‘wages’ ‘properly payable’ under the Payment of Wages Act 1991.

Payment of wages; implied term; contract of employment; wages; properly payable; expense;