FULL RECOMMENDATION
SECTION 28 (1), ORGANISATION OF WORKING TIME ACT, 1997 PARTIES: CARLOW COUNTY COUNCIL (REPRESENTED BY LOCAL GOVERNMENT MANAGEMENT AGENCY) - AND - MR EAMONN RYAN (REPRESENTED BY SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION) DIVISION:
SUBJECT: 1.Appeal of Adjudication Officer Decision No(s) ADJ-00032300 CA-00042934-001. DETERMINATION: This is an appeal by Mr Ryan (‘the Complainant’) from a decision of an Adjudication Officer (ADJ-00032330) under the Organisation of Working Time Act 1997 (‘the Act’). The Adjudication Officer found that the complaint was not well founded.The Notices of Appeal were received by the Court on 24thOctober 2022. The Court heard the appeal on 12th April 2023. At the end of the hearing the Court afforded both parties time to make written submissions on CJEU cases that the Court had brought to their attention. The Complainant alleges thatthe Respondent has undercalculated his payments for Annual Leave periods, for the duration of his employment with it in so far as the Respondent has failed to include 5 hours per week of regular rostered overtime and an eating on site allowance which he receives five times a week. The Complainant is seeking retrospective payment of the shortfall back to when he commenced work in April 2012. The Complainant referred his complaint to the Workplace Relations Commission on 8 March 2021 and therefore the cognisable period as set out in the Act is 9thSeptember 2020 to 8thMarch 2021. Summary of Complainant’s Submission The Complainant commenced employment as a general operative in 2001. His role includes driving a truck. Regular rostered overtime and payment of an eating on site allowance form part of his terms and conditions of employment. The Complainant submits that his “normal weekly pay” for the purposes of calculating his pay for annual leave should include his regular rostered overtime. His hourly rate of pay during the cognisable period was €16.76. He receives half an hour overtime every morning which is paid at double time calculated as €16.76 x 2 = €33.52(double time rate) x2.5 hours =€83.80 and half an hour very evening calculated at €16.76 x 1.5 = €25.15 (time plus one-half rate) x 2.5 = €62.87 giving a weekly total of €146.67 on top of his weekly basic rate of €653.64 (€16.76 x39). The Complainant also receives an eating on site allowance of €1.90 per day. The Complainant currently only receives payment based on his basic salary when he takes annual leave, leaving a shortfall of €156.17 per weeks annual leave, which he is seeking to have backdated to the date he commenced employment. The Union submitted that since September 2021 the Respondent has included regular rostered overtime in the calculation of payment for annual leave. This is an acknowledgement by them that they had been applying it incorrectly. As part of an industrial relations process the Respondent had indicated a willingness to pay three years arrears. However, this was not acceptable to the Complainant. The Union on behalf of the Complainant submitted that he is entitled to have his payment in respect of annual leave recalculated back to when he commenced employment. In support of this contention the Union opened a number of cases to the Court includingSash Window Workshop Ltd v King(2018) IRLR 142 andChief Constable of the Police Services of Northern Ireland & Anor v Agnew(2019) NICA 32. The Union submitted that these cases support their contention that the complaint can be backdated beyond the cognisable period set out in the Irish legislation. The Union also submitted that the Complainant was seeking Francovich damages and compensation in line with the reasoning set out inSabine Von Colson and Elizabeth Kamann v Land Nordrein West fallenC-14/83. The Union submitted that there was a conscious breach of the Complainant’s rights and that he is entitled to be compensated for the breach as well as being compensated for pecuniary losses. The Complainant’s rights have been breached and that the Respondent has failed to fulfil their obligations. The Union is claiming the full losses back to the date he commenced work. Summary of Respondent’s Submission The Respondent submitted that it was operating in accordance with S.I. 475/1977 which is the relevant regulation. It states that in calculating the normal weekly rate of pay, overtime should be excluded. The representative for the Respondent submitted that since 1stSeptember 2022 they have included regular rostered overtime in the calculation of annual leave pay. The Complainant is seeking to have his claim back- dated to the commencement of his employment and to cover all his annual leave. There is no legal basis for doing this. Section 41 (6) of the Workplace Relations Act 2014 provides that the complaint should be presented within the period of six months beginning on the date of the contravention to which the complaint refers. The annual leave year commences on the 1stApril each year and each leave year becomes a separate cause of action. In respect of the caselaw submitted by the Complainants representative they are not relevant to the case to hand. It is not in dispute that the Complainant in this case received his full annual leave entitlement every year and that he was able to take his annual leave. The Respondent submits that as it now includes regular rostered overtime in the calculation of annual leave pay the issue is moot. Relevant Law Calculation of Payment for Annual Leave The Organisation of Working Time (Determination of Pay for Holidays) Regulations 1997 SI No 475 of 1997 (‘the Regulations’) address these matters. Regulation 5(1)(a) expressly and unambiguously excludes overtime from the calculation of “an additional day’s pay”. It provides:
Discussion The Court drew the party’s attention to a number of CJEU cases and invited the parties to make a further submission in respect of same if they wished. Both parties made further submissions. The Union on behalf of the Complainant continued to rely onSash Window Workshop Ltd v King(2018) IRLR 142 andChief Constable of the Police Services of Northern Ireland & Anor v Agnew(2019) NICA 32 in respect of their position that the Complainant was entitled to claim back to the commencement of his employment. The Respondent submitted that it believed the cases in question supported its position, that, in terms of any arrears that might fall due they would be limited to the cognisable period set out in the Act. They submitted that the issue in respect of including regular rostered overtime in the calculation of annual leave pay was moot as they were now doing this and that the caselaw also confirmed that the Directive only applies to the statutory annual leave entitlement. It was not disputed before the Court that the Complainant received all his statutory annual leave entitlement each year since he commenced employment. In the case ofTorsten Hein v Albert Holzkamm GmbH & Co.KG. Case C-385/17,the CJEU at paragraph 46, stated “Lastly, as for the rule that overtime worked by the worker is to be taken into account for the purpose of calculating remuneration due in respect of paid annual leave entitlement, it should be noted that given its exceptional and unforeseeable nature, remuneration received for overtime does not, in principle, form part of the normal remuneration that the worker may claim in respect of the paid annual leave provided for in Article 7 (1) of Directive 2003/88”At paragraph 47 it went on to say “However, when obligations arising from the employment contract require the worker to work overtime on a broadly regular and predictable basis, and the corresponding pay constitutes a significant element of the total remuneration that the worker receives for his professional activity, the pay received for that overtime work should be included in the normal remuneration due under the right to paid annual leave provided for by Article 7(1) of Directive 2003/88, in order that the worker may enjoy during that leave, economic condition which are comparable to those that he enjoys when working. It is for the referring Curt to verify whether that is the case in the main proceedings.” This position was reiterated inDs v Koch Personaldienstleitungen GmbH CaseC-514/20, where ,the Court stated, that paying less than normal remuneration during annual leave periods might well encourage workers not to take their annual leave. This Court in the case to hand, was informed that the Complainant carries out his overtime on a daily basis. His gross weekly wage excluding the overtime during the relevant period was €653.64 and the weekly value of the overtime was €146.67. The value of the overtime is therefore, slightly more than 22% of his weekly wage. The Court determines that in this case that overtime is regular, and predictable and that the corresponding pay, constitutes a significant element of his total remuneration. Therefore, it should be included as normal remuneration due under the right to paid annual leave. In theKochcase, the CJEU at paragraph 56 addresses whether it is possible to limit the temporal effects of the judgment and states“ It should be recalled that, according to settled caselaw of the Court, the interpretation which, in the exercise of the jurisdiction conferred on it by Article 267 TFEU, the Court gives to a rule of EU Law clarifies and defines the meaning and scope of that rule as it must be or ought to have been understood and applied from the time of its entry into force. It follows that the rule as thus interpreted may, and must, be applied by the courtseven to legal relationships which arose and were established before the judgment ruling on the request for interpretation, provided that in other respects the conditions for bringing a dispute relating to the application of that rule before the courts having jurisdiction are satisfied”,and at paragraph 62 states, “Save in exceptional circumstances, which as is clear from the assessment in paragraph 59 above, have not been established, EU law as thus interpreted must be applied by the courts even to legal relationships which arose and were established before the judgment ruling on the request for interpretation, provided that in other respects as was noted in paragraph 56 above, the conditions for bringing a dispute relating to the application of that law before the Courts having jurisdiction are satisfied.” The Court having considered all the case law submitted by the parties and identified by the Court considers that theHeinandKochcases as set out above are the relevant cases in terms of the issues before it. The Court having already determined that the overtime in this case is to be included in the calculation of payment for annual leave then considered the relevant period in terms of the case to hand. As set out above the CJEU had found that clarifications it issues can be applied to relationships that existed prior to it issuing such a clarification. However, that is qualified in that it is subject to compliance with the conditions for bringing a dispute relating to that rule before the Court having jurisdiction to hear the case. The conditions for bringing a dispute relating to the application of the law in Ireland is set down in the Workplace Relations Act 2015 and require that a complaint be lodged within six months of the breach of the Act. The Court determines that the relevant period for consideration by the Court is the six-month period set out in that Act. The Complainant is also in receipt of an ‘eating on site allowance’ which the Union submits ought to be reckonable for the purposes of calculating payment for public holidays. The Revenue guidelines state that an “eating on site allowance may be paid tax free to site based employees”and sets out the conditions that must be met to be eligible for this tax-free allowance. It is clear to the Court that this is not an allowance in the nature of pay and therefore is not comprehended by Regulation 3(2) and does not fall to be considered in the calculation of pay for Public Holidays. Determination For the reasons set out in the body of this determination, the Complainant is entitled to have his regular rostered overtime included in the calculation of his pay while on annual leave. The Court determines that the eating on site allowance is an expense and not an allowance in the nature of pay and therefore does not fall to be included in the calculation of normal pay for the purpose of annual leave. In respect of the Complainant’s claim for retrospection, as set out above, while the interpretation by the CJEU can be applied to legal relationships that existed prior to the judgment, this is subject to the conditions for bringing a dispute relating to the application of that law before the Courts having jurisdiction are satisfied. In this case the conditions for taking a case as set out in the WRC Act 2015, at section 41 is that the complaint must be lodged within six months of the breach. The Court determines that the Complainant is entitled to €568.68 in respect of the annual leave year 1stApril 2020 to 31stMarch 2021 and €568.68 as compensation for the breach. The decision of the Adjudication Office is set aside. The appeal is upheld. The Court so determines.
NOTE Enquiries concerning this Determination should be addressed to Therese Hickey, Court Secretary. |
