Complainant

Respondent

Parties

Lorcan  Mulvin

Ballymaley Stores Ltd Homesavers

Representatives

Owen Roche ACCHL Limited

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-00043388-001

02/04/2021

The complaint concerns alleged failure on the part of the Respondent to pay the Complainant outstanding wages and annual leave following his resignation contrary to the provisions of the Payment of Wages Act [1991-2017]. The Respondent disputes and rejects the complaint on the basis of the Complainant’s conduct and maintains that it acted in accordance with the Complainant’s contract and terms of employment.

The Complainant stated that he commenced employment with the Respondent on 27 November 2020 and that he resigned on 9 March 2021. The Complainant stated that his gross pay per month was €2583.33, that he was paid monthly and that he worked 45 hours/week. The Complainant stated that following his resignation, on 11 March 2021, he emailed the Respondent’s HR requesting his outstanding pay but received no reply. He stated that when his wages were not paid on 31 March 2021 he sent a further email to his line manager but again there was no reply.

The Complainant stated that his last pay date was 28th of February 2021. The Complainant submitted that he was owed for 6.25 days he had worked and for four days annual leave - for which he was seeking the sum of €1222.49.

The Respondent cross-examined the Complainant. In reply the Complainant confirmed that he had received and was familiar with his contracts of employment and the employee handbook. In answer to questions, the Complainant accepted the right of his employer/the Respondent to deduct wages in accordance with his contractual terms and to recoup the value of stolen goods. He denied that he took any goods off the shelf including any out of date stock. He clarified that he had dumped a box of out of date disinfectant wipes in a local hospital waste bin. In reply to a question as to why he had resigned, the Complainant cited a number of issues with his employment including travelling to work and staffing. When asked why he had not initiated the Grievance Procedure – prior to his resignation - to deal with these issues, the Complainant stated that he acted “in the heat of the moment”.

The Complainant submitted that it was grossly unfair to withhold his wages of €1222.49, that he did not misappropriate any items, that any goods he took were out of date and would not have exceeded the value of €150. In this regard, the Complainant strongly disputed that all of the alleged 448 items of stolen stock could be attributed to him and that he submitted there was no evidence or CCTV to support this proposition. The Complainant further stated that he was never afforded an opportunity to address the total loss figure of in excess of €1700 submitted by the Respondent.

The Respondent stated that the Complainant was employed as an Assistant Manager on 27 November 2020 and subsequently promoted to the position of Store Manager under a fixed term contract which was due to expire on 27 May 2021. The Respondent stated that in the course of his employment, the Complainant had stolen goods from its shop “which amount to an excess of €1700” and that consequently, his wages – which “actually amount to €1,222.49” were “being held on account pending the outcome of An Garda Síochána’s investigation”. The Respondent stated that its intention was to deduct from the Complainant’s wages for the month of March 2021 the value of the stolen goods in accordance with the Complainant’s contract of employment and after a full investigation was completed.

The Respondent outlined that on 9 March 2021, its Area Manager and Loss Prevention Manager had a meeting with the Complainant following receipt of an anonymous phone call regarding theft of goods from its store. In this meeting, the Respondent stated that it raised concerns over three incidents where the Complainant took stock from the store without paying for same. The Respondent outlined these three incidents and stated that at the meeting, the managers showed the Complainant CCTV footage of these recorded incidents and asked the Complainant if he could provide an explanation for his actions.

In relation to the three incidents the Respondent outlined as follows:

·       That the first incident showed the Complainant taking stock from the floor and placing it in the boot of his vehicle. According to the Respondent, the Complainant first stated that the boxes were empty but that he later contradicted this statement and stated that the stock was damaged and out of date. The Respondent stated that at the meeting the Complainant was asked if he was aware of the company’s policy in relation to damage stock and he confirmed that he was and that he also accepted that the policy did not involve “putting damage stock in the boot of a vehicle without payment…”;

·       The Respondent stated that the second incident showed the Complainant taking a box of liquorice into the warehouse from the shop floor and subsequently leaving the warehouse with the box of liquorice and a box of disinfected wipes. The Respondent stated that it asked the Complainant if he had paid for these products and that “he responded in the negative and stated once again that the stock was out of date”;

·       That the third incident showed the Complainant putting items into a Homesavers carrier bag in the office. According to the Respondent the Complainant stated that he had paid for the products but on further investigation, “it turned out that he had not paid for a full case of paracetamol”.

The Respondent stated that it advised the Complainant at the meeting on 9 March 2021 that the incidents were being reported to An Garda Síochána and that an internal investigation would also be conducted. The Respondent stated that at the meeting it was seeking the Complainant’s “reasonable explanation” for the incidents. The Respondent stated that it showed the Complainant CCTV footage of the recorded incidents and that the Complainant replied that it “had what it had” and that the managers did not want him in the company. The Respondent stated that the Complainant queried his outstanding wages, offered back his shop keys and stated that he was resigning his job with immediate effect. The Respondent stated that other than this verbal statement, “the Complainant never formally resigned from his position”.

The Loss Prevention Manager gave evidence in relation to the complaint including his involvement at the meeting on the 9th March 2021 and the investigation conducted by the Respondent. In that regard, the Loss Prevention Manager outlined how he had shown the Complainant the CCTV footage of “multiple incidents of alleged theft” and that “at no point was any payment made for the goods” taken. In relation to his investigation, the Loss Prevention Manager explained how he had used the CCTV footage, the internal stock records, inventory lists and “goods in” reports to determine that the value of the loss to the Respondent was €1738.76 consisting of 448 units of stock. He explained the various CCTV screen shots in detail.

Following this meeting and the Complainant’s resignation, an investigation was conducted by the Loss Prevention Manager which concluded as follows on the 24th August 2021:

“After a full investigation of this incident was concluded, I have found by means of perusing internal reports and reviewing CCTV footage that Mr Lorcan Mulvin had done the following-

§  Removed goods from the shop floor, warehouse and store, making no attempt to pay for same; and

§  Deliberately placed items into bags and into brown boxes to conceal them from the view of other managers & staff; and

§  Placed these goods into his car’s boot and onto the back seat of his car onother occasions.

I have also performed stock counts in the store to verify the actual amount of stock missing. I did this by gathering data on stock in the building between set periods, reviewed sales data to show how much stock should have left the store through the correct means and then performed a stock count at the end which gave me the total amount of stock missing.

I confirm that the total value of goods taken by Mr Lorcan Mulvin is of €1,738.76”.

The Complainant cross examined the Loss Prevention Manager on his evidence and put it to him that there was no record of the missing liquorice boxes or the paracetamol on the list of lost items and nor was there any evidence in relation to crisp and dry oil. In relation to other items the Complainant put it to the Loss Prevention Manager that there was no evidence of goods in the boxes seen on the CCTV footage and that the Respondent had only highlighted three particular incidents of missing stock and not the alleged total of 448 items. In reply, the Loss Prevention Manager clarified that he did not conduct a physical stock take. The Loss Prevention Manager also clarified that the paracetamol had not been included in the overall loss value, that the liquorice had been de-listed from the 448 list and that two bottles of crisp and dry oil were also not included. He maintained however, that there were ringed lights in the boxes taken by the Complainant. The Loss Prevention Manager stated that the retail value of the goods was relied upon and that based on the stock counts he was satisfied that each of the 448 units was on the list of missing stock and that his calculations were “substantially backed up by CCTV”. The Loss Prevention Manager also stated that because of IT issues he had not been able to retrieve footage/data for the full 448 items.

The Respondent’s HR Director gave evidence in relation to her dealings with the Complainant including as regards his requests for payment of his outstanding wages and his P45. The HR Director outlined her letters to the Complainant of 23 March 2021 and 10 August 2021. On 23 March 2021 the HR Director stated that she wrote to the Complainant with a Notice of Deduction which informed him that his wages for the month of March 2021 would be deducted as per his contract of employment. This letter stated:

“The company deems that this is fair and reasonable having regard to the circumstances where the initial investigation by our Loss Prevention Department has shown that goods in the excess of €1700.00 were removed by you from the store”.

The HR Director stated that she wrote again to the Complainant on 10 August 2021 and advised that pending the outcome of the investigation by An Garda Síochána and its internal investigation, his payment of 6.25 days and 4 holidays days were being held on account and that the Respondent was reserving its position pending the outcome of these investigations. In that letter the Respondent drew the Complainant’s attention to his contract of employment and the employee handbook.

The Complainant questioned the HR Director on her evidence and sought to establish that he had no role in the internal investigation and that the only contact he received from the Respondent was the two letters of 23 March and 10 August 2021. The Complainant put it to the HR Director that he had received no communication between 23 March and his final pay date of 31 March 2021 which was not disputed. The Complainant also put it to the HR Director that he had not been subjected to any disciplinary proceedings nor had he been provided with any right of appeal in relation to the withholding of his wages. He also put it to the HR Director that he only received the list of 448 units of purported stolen items after his wages were withheld. In reply the HR Director stated that she was supplied with the loss amount of €1700 from the Loss Prevention Department and she agreed that this figure was never put to the Complainant for explanation.

The Respondent stated that its position was fair and reasonable and was supported by documentary evidence including CCTV footage. According to the Respondent the Complainant did not provide any reasonable explanation for his taking stock in the course of the three incidents described. The Respondent stated that the Complainant was on notice via his contract of employment and the employee handbook of its policies including in relation to out of date stock, which provided for a resulting deduction of wages for stolen goods. The Respondent stated that the Complainant accepted at the meeting on 9 March 2020 that he did not comply with the Respondent’s policies and procedures for handling out of date stock, that he resigned from his position with immediate effect thereby acting in an unreasonable manner and that in the circumstances, his complaint is not well founded. The Respondent maintained that it did not allow for a culture of discretion with regard to out of date stock, that when money is owed to the company it is entitled to deduct it and that where goods are not sold they belong to the company. Accordingly, the Respondent submitted that the Complainant should be precluded from advancing a claim under the Payment of Wages Act [1991-2017].

Section 1 of the Payment of Wages Act [1991-2017] sets out the definition of wages as “any fee, bonus or commission, or any holiday, sick and maternity pay, or any other emolument, referable to [the employee’s] employment, whether payable under [the] contract of employment or otherwise…”.

Section 5(1) of the Payment of Wages Act [1991-2017] sets out the parameters according to which deductions may be made from an employee’s wages:

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.

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 thesupply 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) addresses the circumstances in which wages which are properly payable are not paid as follows:

             “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”.

It is clear that the Act permits a deduction from an employee’s wages in order to comply with a statutory requirement, such as tax or PRSI or where such is explicitly provided for in the contract of employment. In this regard, having carefully considered the sworn oral evidence and submissions, I am satisfied that the Complainant’s original contract of employment signed by him on 3 December 2020 and his last contract signed on 12 February 2021 permitted deductions from his pay for any sums which may be owed to the company including any losses suffered by the company. Further, the Complainant received an employee handbook which provided that if an employee left the company owing money for any reason, it was a condition of employment that these funds can be deducted from his/her final pay.

However, the Act is also clear that deductions must not only be authorised by the employee’s contract of employment, but that in addition, in the case of deductions in respect of an act or omission of the employee, any such deductions must be fair and reasonable and cannot exceed the loss suffered by the employer. At the meeting of 9 March 2021 between the Complainant and his Area Manager and the Loss Prevention Manager, three incidents of alleged wrongly taking stock  were put to the Complainant. The meeting note documents the Complainant’s reply that the stock was damaged or out of date. The stock referred to boxes, a box of liquorice, a box of disinfectant wipes, items allegedly put in a Homesavers carrier bag and a case of paracetamol. The Complainant was shown CCTV footage of these recorded incidents and asked to explain his actions. On 23 March 2021 the HR Director sent the Complainant a Notice of Deduction which informed him that his wages for the month of March 2021 would be deducted as per his contract of employment. A letter in similar terms was sent on 10 August  2021 wherein the Complainant was advised that pending the outcome of the investigation by An Garda Síochána and the Respondent’s internal investigation, his wages of 6.25 days worked and 4 holidays days accrued were being held on account. Thereafter, on the 24th August 2021, the Loss Prevention Manager concluded the Respondent’s investigation and determined that the total value of goods taken by the Complainant was €1,738.76/in excess of €1700. In his conclusion statement the Loss Prevention Manager outlined his methodology - that he gathered data on stock between set periods, reviewed sales data to show how much stock should have left the store through the correct means and at the end performed a stock count which he stated gave him the total amount of stock missing.

I have now carefully considered all the the sworn evidence and submissions and on the balance of probabilities, I have come to the conclusion that the continued withholding of the Complainant’s wages and annual leave is neither fair nor reasonable and constitutes an unlawful deduction for the following reasons:

·       I am not satisfied that the Respondent’s process of determining the value of its purported stolen stock was sufficiently transparent – including in relation to purported out of date stock. Whilst it is not for me to determine the value of stock allegedly wrongly taken or to determine the methodology by which this is to be assessed, I am concerned about the various discrepancies that were highlighted in the course of the oral evidence – particularly in relation to the various items raised at the meeting on the 9th March 2021 – eg the liquorice and paracetamol – which were subsequently excluded from the 448 list of items. Accordingly, I cannot be satisfied that the deduction of €1222.49 fairly represents the purported loss purportedly attributable to the Complainant or that it does not exceed the cost to the Respondent of the various goods;

·       I am satisfied that the Complainant – notwithstanding his resignation – was not afforded any opportunity to challenge or respond to the Respondent’s loss valuation of €1700/€1,738.76 and nor was he furnished with any detailed particulars as regards how this figure was arrived at - prior to the deduction.

It is my view that on the 31st March 2021, the Complainant’s  wages were properly payable.  For the reasons outlined I find that the non-payment of these wages constituted an unlawful deduction contrary to the provisions of the Payment of Wages Act [1991-2017].  Accordingly, the complaint is well founded. In the circumstances, I order the Respondent to pay the Complainant the amount of €1,222.49 in respect of his outstanding wages and annual leave – subject to such statutory deductions as may apply.

Unlawful deduction of wages and annual leave