Complainant

Respondent

Parties

Bernard  Ryan

MSD

Representatives

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-00050765-001

23/05/2022

The complainant worked with the respondent as a Laboratory Technician until his retirement on 1 January 2022. The complainant contends that wages of €6,037.69 are owed to him for hours worked between 6 December 2021 and 1 January 2022 and should have been included in his final wages on 26 January 2022.  The respondent states that all wages due to the complainant have been paid in full.

The complainant commenced employment with the respondent on 12 January 1981 and retired in January 2022. The complainant was paid monthly. His normal salary included basic pay and a fixed shift premium.

On 26 January 2022 the complainant received his final wage. In that payment, an amount was paid for public holidays due to him and a monthly shift premium, but basic wages for 161 hours (equivalent to €6,037.69) worked between 6 December 2021 and 1 January 2022 inclusive had not been paid.  The complainant queried why shift premium had been paid but not wages. The complainant outlined that the respondent advised him that he had already been paid for the 161 hours worked as wages were paid within the current month. Shift premium was included in his final pay on 26 January 2022 because shift premium was paid monthly in arrears. It is the complainant’s case that this is incorrect and submitted that both basic pay and shift premium have always been paid one month in arrears.  

In evidence the complainant outlined that he commenced employment on 12 January 1981 and that his wages for January 1981 were paid to him on 23 January 1981. In January 1981 he worked three shifts only as he was being trained into the role. He received the premium for those three shifts in his February monthly payment, together with his wages for the month of February and the shift premium due for the month of February. The complainant outlined that the cut off point for the calculation of pay within a month is the third Sunday within the month. The complainant stated that he was paid on the 18 December 2021 but that he did not receive basic wages for hours worked thereafter until his retirement.

The complainant stated that it was at this hearing that he was learning for the first time that the shift premium paid in his final payment was in fact paid in error. The complainant outlined that the respondent had previously explained that he received shift premium in his final payment on 26 January 2022 because shift premium was paid in arrears. Now the respondent was saying that, like wages, shift premium was not paid in arrears but rather in the current month. The complainant felt that the respondent was changing the goal posts. The complainant did not accept the latest explanation for the inclusion of shift premium in his final pay on 26 January 2022. 

It is normal practice to pay wages weekly in arrears for unionised employees. However, this is not the case for unionised Laboratory Technicians such as the complainant. Rather Laboratory Technicians are paid monthly wages and shift premium in the current month. Variable pay such as over time and public holiday payments for example are paid monthly in arrears.

The first month wages for new starters is pro-rated according to start date, thereafter, most employees on a fixed wage and fixed shift premium are paid 1/12th of annual salary and shift premium each month within the month. 

The respondent outlined that throughout the complainant’s employment he was paid monthly, and that the complainant received basic pay plus shift premium within the current month. The cut-off point of the third Sunday within the month applies only to variable pay. The complainant’s hourly wage and shift premium was fixed and accordingly, he received 1/12th of his annual earnings each month.

The respondent outlined that the complainant was paid for hours worked in December 2021 together with shift pay for that month. The complainant was not due a month’s wages in arrears in his final pay on 26 January 2022.  

The respondent outlined that the payment of shift pay in the final monthly payment was done in error, and this error is what may have given rise to the complainant’s claim. The error of including shift premium in the final payment on 26 January 2022 was only discovered when the respondent was preparing for this hearing. The respondent acknowledged that the complainant had been told that shift premium was paid in arrears when he questioned why he received payment for shift premium and not wages in his final pay. However, on examining this further, the respondent realised that Laboratory Technicians receive wages and shift premium within the current month. This is because shift premium for Laboratory Technicians is fixed and does not vary from month to month. The overpayment arose because payroll treated the complainant in the same way as non-unionised employees employed at the site who receive shift pay a month in arrears as part of their variable pay and not in accordance with a small number of legacy unionised indirect employees at the site who are paid their shift rate in the current month as they have worked a standard four shift pattern with a fixed 33.3% shift premium since the commencement of employment.

The respondent submitted that the complainant himself acknowledged within his complaint form that he received pay in the current payroll month since he commenced employment with the respondent in 1981.

In evidence, the Head of Payroll described the complexity and nuances of the payroll process across the various respondent sites and how shift premium is now more commonly treated as variable pay, payment for which is in arrears. However, where a shift premium is fixed, as in the case of the complainant, wages and shift premium are paid in the current month for most employees. As records for payroll only go back to 2010, an assumption was made that the complainant was also paid shift premium in arrears and accordingly, payment for shift premium was made in his final salary. However, this was subsequently discovered to be an error, as the Laboratory Technicians have a fixed shift premium, and the practice has been to pay the wages and shift premium of Laboratory Technicians in the current month and not in arrears. It was acknowledged that the complainant had been told differently when he queried his pay in January 2022 and for that the respondent apologised.

Section 1 of the Payment of Wages Act 1991 (“the Act”) defines wages as:

“. . . 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 employment or otherwise . . . .”

Section 5(1) of the Act provides that an employer shall not make a deduction from the wages of an employee unless such a deduction is authorised or consented to.

Section 5(6) of the Act provides:

“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”.

The High Court in Marek Balans v Tesco Ireland Limited [2020] IEHC 55outlined that, when considering a complaint under the Payment of Wages Act 1991, it must first be established the wages which were properly payable before considering whether a deduction had been made. Thus to succeed in this complaint the complainant must show that basic pay for 161 hours was properly payable to him in his final wages on 26 January 2022. 

The complainant’s case is based on his contention that both wages and shift premium were always paid monthly in arrears and accordingly, he should have been paid for 161 hours worked between 6 December 2021 and 1 January 2022 in his final wages on 26 January 2022. This is refuted by the respondent. The respondent contends that the complainant was paid both wages and shift premium within the current month. The respondent outlined that the payment of monthly shift premium in the final payment of 26 January 2022 was an over payment (which it does not seek to recover).

I find that wages of €6,037.69 for 161 hours worked between 6 December 2021 and 1 January 2022 were not properly payable in the complainant’s final wages on 26 January 2022 for the following reasons.

First, the respondent included a payroll calendar for 2021 in Appendix 2 to its submission which shows that the last payroll for 2021 was paid on 20 December 2021 and that this covered the period 8 November 2021 to 5 December 2021.  One of the payslips in Appendix 1 of the respondent's submission relates to the previously mentioned period. A further payslip relating to the period from 6 December 2021 showed a payment to the complainant for 161 basic hours worked (an amount for €6,037.69). I am satisfied, therefore, that the employee received payment for the 161 hours worked after 6 December 2021.

Second, I reviewed the payslips relating to the commencement of the complainant’s employment. It is clear from these documents that the complainant’s basic wages were paid within the current month. It was the complainant’s own evidence that he commenced employment on 12 January 1981 and his wages for that month were paid to him at the end of that month (the payslip shows a payment date of 31 January 1981). The complainant also submitted a payslip for February 1981. In that month the complainant received his wages for the month of February on 28 February 1981 (together with shift premium for 3 shifts worked in January and the full shift premium for the month of February). It is clear, therefore, that on the commencement of his employment, the complainant was paid basic pay within the month. I accept the respondent's submission that if there was a practice of paying monthly in arrears, the complainant would have waited six weeks or longer to receive his first month’s basic salary, which was not the case. Further, there was no suggestion by the complainant that the practice of paying basic salary within the current month changed at any time over the 41 years of his employment. I find, therefore, that the complainant was not paid monthly in arrears and accordingly, payment for a month in arrears did not fall due for payment on 26 January 2022. I can appreciate how the erroneous inclusion of shift premium in the final payment on 26 January 2022, together with the varying company practices around the timing of pay, gave rise to confusion on the part of the complainant. This was not helped by the differing, but honestly held, explanations given to the complainant for the inclusion of a monthly shift premium in his final salary.

I decide that this complaint under the Payment of Wages Act 1991 is not well-founded.

Deduction. Payment of wages in arrears.