Complainant

Respondent

Parties

Maciej  Sosnowski

Lidl  Gmbh

Representatives

  Self

Anne Hennessy, Employee Relations Manager

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-00052574-001

02/09/2022

The Complainant worked as a Customer Assistant with the Respondent.  He worked for the Respondent for two separate periods, 09/08/2005 – 28/6/2007 and 24/01/2022 – 01/09/2022.  He was paid €12.30 per hour and worked 30 hours per week.  The Respondent made a deduction from his pay to recoup an overpayment. The Complainant believes that this was not correct, and he did not give his consent for the deduction.  The Respondent’s position is that all deductions were legal and in line with the provisions of the contract of employment.

The Complainant submitted that he worked for the Respondent in 2005 and again in 2022.  He resigned in February 2022 and took up employment again in July 2022 with the Respondent in another store. He resigned in August 2022  and went to the store and completed the resignation paperwork.  He was told that he would be paid the following month.  The Complainant gave evidence that he made many attempts to find out about his pay, but he did not receive any response.  After he sent an e mail to the Head Office in Germany, he received a letter to say that he was overpaid and that he owed the Respondent the sum of €345.24.  He received two further letters.  The Complainant submits that he was not paid and was never told that he would not receive any pay.  The Complainant also stated that he did not receive any pay slip to explain his wages.  He eventually received a copy of his payslip in September 2022 from the Respondent.

The Respondent is a leading discount retailer and operates across the island of Ireland.  All its stores are serviced from the Head Office in Tallaght, Dublin 24.  The Complainant worked for the Respondent from 09/08/2005 until 28/06/2007 as a customer service agent.  When this period of employment ended the Complainant owed the Respondent €452.00 as a result of an overpayment.  An overpayment can occur as employees are paid their contracted hours each month and adjusted the following month if an employee has not worked their contracted hours or where other changes such as leave occurs.

The Complainant worked again for the Respondent from 24/01/2022 until 01/08/2022.  The Complainant was on a period of unpaid absence from 15/02/2022 until 18/07/2022.  The Complainant was paid his full contracted hours in March 2022, and this was an overpayment of €1,780.20 as the Complainant was on a period of unpaid absence at that time.  The Complainant received no further pay until he returned to work on 19/07/2022.  The Complainant was paid for the 55.97 hours he worked in July in his August 2022 payslip.  On his final payslip in September 2022 deductions were made for the outstanding amount due from 2007 (€452.00) and a further deduction for the overpayment in March 2022 (€1,780.20).  The Complainant still owes the Respondent the sum of €345.24 as there was insufficient funds in his final payslip to cover all that was owed.

The Respondent believes that it acted lawfully in actioning the deductions due.  The Complainant’s contract of employment contains a section with a title of “Deductions”.  This states: “By signing this Contract of Employment you authorise the Company to deduct from your pay (including holiday pay, sick pay, enhanced maternity benefit or, bonus or commission, payment in lieu of all or part of the notice periods) any amounts, which are owed by the Employee to the Company (including any loans, overpayments, relocation policies, excess holiday/sickness, expenses etc.).  By signing this agreement, you consent to any such deduction for the purposes of the Payment of Wages Act, 1991”. 

The Complainant signed his contract of employment on 17/01/2022.

It is the Respondent’s position that any deductions made during the course of the Complainant’s employment were lawful and in line with his signed terms and conditions of employment. 

The Respondent’s payroll manager, Mr Pavo Javic, gave evidence of how the payroll system works.  This is a bespoke system and if an employee is rehired their employment history is activated on the payroll system.  It was for this reason that the sum of €452.00 due by the Complainant remained on the system.  Mr Javic also provided the hearing with copies of the Complainant’s payslips and provided a comprehensive explanation of the various computations.   Mr Javic also outlined that an employee retains access to their payslips on the Respondent’s employee portal.  The complainant had access to this when he was paid in August and September 2022.

This is a complaint seeking adjudication by the WRC under section 6 of the Payment of Wages Act, 1991.

The Respondent provided a written submission in advance of the hearing and provided copies of all relevant documents in relation to this case.

The Respondent’s representative clarified that the Complainant’s second period of employment from 24/01/2022 continued until 01/08/2022. The Complainant’s understanding was that he resigned in February 2022 and then took up employment again on 19/07/2022.  The Respondent’s representative confirmed that he did not resign and was placed on unpaid leave.  This worked to his advantage as he was paid for accrued annual leave. 

In his claim the Complainant submitted that the Respondent made an unlawful deduction from his wages. 

Section 1 of the Payment of Wages Act, 1991 defines wages as:

“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 this employment, whether payable under his contract of employment or otherwise,”

Deductions made by an employer from the wages of an employee are set out in Section 5 of the Act 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.”

Having carefully considered the circumstances involved in the within case I am satisfied that the deductions from the Complainant’s wages in September 2022 represents a deduction from his wages.

Taking into account the application of Section 5 (1) (a) as outlined above, I am satisfied that the deduction was not required or authorised by any statute or instrument under statute.

Taking into account the application of Section 5 (1) (b) as outlined above, I am satisfied that there is a term or clause in the Complainant’s contract of employment signed by the Complainant on 17/01/2022 which explicitly required or authorises a deduction from his wages and makes various references to the likely circumstances in which such a deduction might occur. This contract was in place for the period 24/01/2022 until 01/08/2022.  It does not give retrospective effect to the amount owed from 2007.

Taking into account the application of Section 5 (1) (c) I am satisfied that the Complainant did give his prior consent in writing to the deduction from his wages when he signed his contract of employment.

There is a particular difficulty in relation to the deduction of the amount of €425.00 which the Respondent states is due from 2007.  At the hearing the Complainant gave evidence that he was never contacted by the Respondent to seek this money.  The Respondent did not provide any evidence to confirm that this money was sought over a period of 14 years and 7 months since the Complainant’s initial employment ceased on 28/06/2007.  I am satisfied that there is no clause in the Complainant’s contract of employment that permits the Respondent to seek this repayment retrospectively.  The Statute of Limitations, 1957 as amended sets out a time limit for taking actions for breach of contract or for debt judgment is six years.

I find that this complaint is well founded in part.  Specifically, the amount of €425.00 should not have been deducted and the Respondent is ordered to repay this amount to the Complainant and offset this amount against the amount due to the Complainant. 

I have decided that this complaint is well founded in part. The amount of €425.00 should not have been deducted from the Complainant and the Respondent is ordered to repay this amount to the Complainant and offset this amount against the amount due to the Complainant. 

Deductions.  Consent.