Employee

Employer

Anonymised Parties

A Driver

A Facilities Services Company

Representatives

SIPTU

 Dundon Callanan Solicitors

Act

Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 13 of the Industrial Relations Act, 1969

CA-00043373-002

01/04/2021

In 2018, the complainant transferred to the respondent in accordance with the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (Statutory Instrument 131 / 2003).  When he worked with his previous employer, he was paid weekly.  At some point after the transfer, the respondent changed his pay frequency to fortnightly.

On December 15th 2020, the complainant and his colleagues were informed that, in January 2021, the respondent intended to change their pay frequency to monthly.  This was confirmed in a letter on December 23rd.  The complainant and his colleagues objected to the change and a second meeting took place on January 7th 2021.  No agreement was reached and, on February 26th 2021, the respondent wrote to the complainant to confirm that he would be paid monthly with effect from March 17th.  Since that date, the complainant has been paid on the 17th of each month.  On April 1st 2021, the complainant and nine other employees submitted this dispute to the WRC for investigation under section 13 of the Industrial Relations Act 1967.

This investigation was put on hold when, on April 19th, on behalf of the complainants, Mr Dorda wrote to the WRC to inform us that the respondent wanted to attempt to resolve the dispute locally.  Meetings took place in May and June 2021 in accordance with the company’s grievance procedure.  Towards the end of 2021, some of the complainant’s colleagues were informed that their grievance was not upheld.  They appealed this outcome, but in early 2022, they were informed that the decision to move to monthly pay would not be overturned.

The respondent’s position is that the outcome of the grievance in respect of one employee is the determination of the matter in relation to all the aggrieved employees.  They referred to the explicit term in the employee’s contract that he will give reasonable co-operation to his employer.  They argue that it was reasonable for the employer to change the frequency of the payment of wages and that reasonable notice was given to the employee that this would occur.

In his submission, Mr Dorda set out the chronology of meetings from December 2020 to February 2022, when the employees were informed that their appeal of the employer’s decision to change their pay frequency to monthly was not upheld.  He said that he expects the respondent to provide a justification for the failure to bring the process to an end.

Mr Dorda submitted that it is a basic principle of contract law that terms of a contract cannot be varied, except with the agreement of the parties.  Even where there is a provision that an employer reserves the right to vary certain terms, this right cannot be exercised in an unfettered way.  The payment of wages on a weekly basis was a written, express clause in the employee’s contract. 

While the respondent might argue that it is an implied term of the employee’s contract that he will give reasonable co-operation to his employer, Mr Dorda submitted that an implied term cannot contradict or be inconsistent with an express term unless the change is imposed by parliament or a relevant court.  He referred to the 1980 decision of the Supreme Court in Siney v Dublin Corporation[1], where it was held that there was an implied warranty in the agreement between Mr Siney, a tenant of what was then Dublin Corporation, and the Corporation, regarding his entitlement to accommodation that was fit for habitation.  Mr Dorda said that, in the employee’s case, there is an express term related to the frequency of the payment of his wages.  An implied term in a contract does not mean that an employer can change an express term, particularly when this express term relates to the frequency of pay.

Mr Dorda submitted that the employer changed the frequency of pay for reasons of efficiency.  In so doing, they have achieved a financial benefit to the detriment of their employees, as, their lives have become more difficult.

Referring to the long delay dealing with the employee’s grievance, Mr Dorda said that the overall objective of the grievance procedure is to bring matters to a conclusion as soon as reasonably possible.  The employee’s position is that the employer blatantly and unreasonably delayed bringing the grievance to a conclusion.  The process began in December 2020, and, it was only in April 2021, when the employee referred the issue to the WRC, that the employer responded and offered to conduct a grievance investigation.  While initial meetings were held between April and the end of June 2021, the employer delayed up to nine months in some instances, before reaching a conclusion.  There were delays arranging appeal hearings, which only concluded in February 2022.

The employee and his colleagues hoped that the employer would reverse their decision to move their pay to monthly.  It was on this basis that they “parked” their proceedings at the WRC.  However, the employer then delayed reaching a conclusion “as soon as reasonably possible,” as set out in their grievance procedure.

Mr Dorda said that the complainant and his colleagues want the respondent to reinstate their pay to fortnightly and to compensate them for the delay processing their grievance.

In his submission, Mr St John Dundon said that employer engaged with the employees in good faith in relation to the change of their pay frequency from fortnightly to monthly.  He said that this is shown by the fact that another aspect of their grievance, the payment of lunch allowances, was resolved satisfactorily. 

Mr St John Dundon accepted that there was some delay reaching a conclusion regarding the issue of the pay frequency; however, he said that this is excused because of the very challenging issues arising for the employer during the Covid-19 pandemic.  He said that the respondent’s personnel were stretched in terms of managing their business as an essential service. 

Mr St John Dundon said that the timeline set out in the grievance procedure is only indicative and the employee’s claims were comprised of a number of components which were time-consuming to address.

The employee’s contract of employment from the date of his commencement with his previous employer was included in the documents submitted by the employee.  This provides that he will be paid weekly.  The employer was faced with a situation where wages were being paid on various days of the month, imposing a significant administrative burden.  The employer decided to streamline payroll processes and to pay employees on just two days a month.

Mr St John Dundon asserted that there was extensive consultation with the employee before the change was implemented in March 2021.  He referred to the implied and the express terms in his contract which provides that he will give reasonable co-operation to his employer.  Mr St John Dundon argued that it was reasonable for the employer to change the frequency of the employee’s wages and for the employee to co-operate with this change as he had done previously.  Having been advised that the change would come into effect in January 2021, to give the employee as much time as possible to prepare for the change, the date of implementation was extended to March.

Mr St John Dundon concluded by saying that, in the circumstances, changes can be made and there was significant communication with the employee beforehand.  The need for the changes was explained and support was offered to employees if it was needed.  In the case of this employee, he declined the offer of support.

Apart from the public sector, almost all employers pay their employees monthly, even part-time and low-paid employees.  For an employer with a variety of pay frequencies, it is not unreasonable to put in place an efficient payroll process and to pay everyone monthly.  The benefits are significant, with administrative costs saved and the risk of errors and discrepancies reduced.  For employees who are used to being paid weekly or, in the case of this employee, fortnightly, the change is significant.  The difference between being paid 26 times a year compared to being paid 12 times a year takes some adjustment, although the amount earned is the same.  While I accept that employees are expected to co-operate with their employer regarding change, for many, the change to monthly pay is very challenging.  It is my view that an employer has some responsibility to recognise this inconvenience and to attempt to address it.

Previous disputes regarding this matter which have been considered by the Labour Court have recognised this reality and have recommended that the employer shares some of the benefit of the efficiency by compensating employees.  See for example, Bidvest Noonan (ROI) Limited and 25 Security Personnel[2] and Citizens Information Service and 326 Clerical / Admin Staff[3].

In January and February 2021, this dispute could have been resolved if the employer had engaged in a practical way to encourage the affected employees to accept the change.  The only realistic way of doing this was to offer compensation.  In April 2021, when the employees agreed to suspend the investigation of this grievance by the WRC, it would have been reasonable for them to expect that an offer of compensation would be made.  Instead, the matter dragged on.  While the change occurred during the Covid-19 restrictions, it seems to me that the delay benefited the employer, because the nature of the grievance was such that, the longer the delay in reaching a conclusion, the more time would elapse for the employees to become accustomed to the change.

In recommending a resolution of this matter, I must be guided by the previous decisions of the Labour Court in the cases to which I have referred.  I also recognise that, in addition to the change from fortnightly to monthly pay, which is significant for the employee, the employer’s delay investigating the grievance compounded the employee’s sense that the change was imposed unilaterally.  With some creative problem-solving on the part of the employer, this could have been avoided. 

To bring this dispute to a conclusion, I recommend that the employer pay compensation in the form of a voucher to the value of €500, which is within the Revenue regulations for a one-off payment to an employee without a liability for tax.

Change in frequency of payment of wages.