Complainant

Respondent

Parties

Sarah  Donohoe

Kostal Ireland Gmbh

Representatives

Joe Kelly  and Deirdre Canty, SIPTU Advocates

Mairead Crosby , IBEC Regional 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-00046164-001

13/09/2021

Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991(not opened)

CA-00052628-001

07/09/2022

Both the Company, Kostal GMbh, an Auto parts business, represented by IBEC and the Complainant, Ms. Donohoe, represented by SIPTU came to this case through their joint association with the prior cases of

ADJ 23761 at Adjudication and PWD 2212, at the Labour Court, on appeal which issued in February 2022.

This case centers on allegations surrounding several occurrences of a reduction in the hours of the working week, led by the company, and challenged by the Union.

The events at the center of the cases arose when the company experienced trading difficulties and downsized the workforce over finite periods over 2020-2021.

There are currently over 300 similar cases before the WRC. This provided the WRC with an opportunity to engage with the parties on whether they would consider a “test case “platform on which to progress this large volume of cases? Both Parties expressed an interest in exploring that option and the cases were then delegated to me as the assigned adjudicator.

On 21 September 2022, at case management, the Parties agreed to run 5 named cases which would be recognised as test cases on behalf of the cohort of some 300 Payment of Wages complaints currently placed before the WRC.

These cases originated in the main over the years 2020 -2022 and reflect a period of reduced hours of work initiated by the company and opposed by the Union. The economic background to the occurrences reflected circumstances which evolved during the national pandemic, covid 19.

The parties approached this case against a Closed Shop Union presence and a live Management Union Agreement at base. In addition, the parties had recently concluded a Pay Agreement.

 The Parties   had elected to address these individual claims within the provisions of the Payment of Wages Act, 1991.

 When I first met the parties, I enquired whether they had ever considered the formulation of a collective agreement approach in response to these reduced working weeks?  Both parties had referenced the permissive and arguably enabling contractual clause held by newer recruits at the business.

 I was informed that neither party had considered this pathway.

 It is common case, however, that 50% of the workforce hold the arguably enabling contractual clauses on “lay off “.

On 21 September 2022, I met with the parties at Case Management Hearing in Cork to decide on the best way forward. By then, the volume of cases had expanded to 223-308.

Both Parties confirmed that they were agreed on the nomination of five staff names as test cases.

Sarah Donohoe, the complainant

Dónal Cummane

Christina Murphy

Gabriel Delee

Sinead Cannon

All claims sent to the WRC in 2020 and two periods of 2021 were the target claims.

The parties agreed to apply the decisions in these cases to the larger body of workers who had live claims before the WRC.

The Respondent confirmed that the Company had successfully completed the reconciliation exercise with regard to the Temporary Wage Subsidy.

I asked the parties whether they had received a clarification on the formation of the quantum awarded in the Labour Court Decision PWD 2212 from February 2022?

Both Parties clarified that the matter of formation of quantum had not been resolved between them. The matter remained subject to tax advice.

This case involved the identical parties, and an overarching complainant in the 5 test cases, Gabriel DeLee, SIPTU and Kostal Ireland GMbh, and had considered a claim for wages set against a reduced working week in PWD 2212

In finding for the Complainant in that case, the Court decided: 

“ Having regard to the totality of the events which occurred at the material time , the fact that the State intervened to provide a payment to the Complainant in recognition of the fact that he was without work and payment at the material time, the amount of the gross wage of the complainant and the gross amount of the deduction made from the wages of the complainant , the Court directs the Appellant to pay to the Complainant compensation in the amount of €650, being the amount the Court thinks reasonable in the circumstances “

The matter of compensation minus the consideration of a DSP payment permeated through the decision.

In the earlier claim before WRC Adjudication:

On 29 March 2021, the Adjudicator, in ADJ 23761, at first instance had concluded:

 I find that the complaint is well founded under section 6(1) of the Payment of Wages Act 1991, and I order the Respondent to pay the Complainant the sum of €984less the amount of any Department of Social Protection payment received by the Complainant, if any, for the period between 11 March 2019 and 19 April 2019. Appropriate lawful deductions should be made from the remaining sum.

The parties had not resolved the matter of payment to Mr. DeLee at the case management or by the time of the hearing in the instant case.

Both parties made helpful written submissions.

At the conclusion of the hearing, I requested additional information from the Union on the nuances around TWSS and the interface of social welfare payments on pay slips. I wanted to know more about how these periods without work were being categorised to DSP?

On 15 December 2022, the Respondent confirmed two net payments referred to as “covid payment “to Mr. Cummane during May and June 2020. Ms. Crosby also confirmed that the complete company annual bonus was paid to 4 of the eligible complainants arising from the calendar years of 2020 and 2021.

 I received the requested information on DSP information pertaining to Ms. Donohoe, from the Union on 19 February 2023. I received respondents comments one week later.

This decision incorporates a reflection on both parties’ supplementary comments post hearing.

The Complainant and associated complainants gave evidence under oath.

The Union has submitted three claims on behalf of the Complainant under the Payment of Wages Act, 1991 in this matter. The third is incorporated in the conjoined case of ADJ 29501

The complainant has worked at the company for 29 years since 1993.

1 16 March 2020     €165.01 claimed.

2 2 April 2021 to 10 August 2021 €1608.88 claimed.  The instant claim CA-46164-001

3 3 September 2021 to 1/2 November 2021 €495.04 claimed.

The Union has contended that there had been an illegal deduction in the complainants’ wages, and they sought compensation to the valued of unpaid wages of €2, 268.93 in total explained as 14 days cumulative loss. This incorporates ADJ 35033 statement of claim.

The Complainant submitted that she was paid €804.00 inclusive of shift allowance for a 39-hour week. The base wage is €670.37.

Case Number              Claim received by WRC       Amount Claimed

1 CA- 46164-001          13 September 2021                €1,608.88

3 CA-52593-001        September 7, 2022, (not opened as originated in 2022)  

The Complainant has worked as a Quality Auditor on evening shift on a full-time basis since. A permanent contract was exhibited in submissions as having been accepted on 13 March 2001. This does not contain provision for temporary layoff / short time.

Historically in 2008, the Respondent in the context of the Recession, sought agreement from the workers to place them on lay off and short time to avoid redundancies at the plant.

There was no provision for collective sanction of this action, however, the complainant participated under protest.

Following that dispute, the Respondent inserted this specific clause in the contracts issued to new hires.

“The Company reserves the right to lay you off from work or reduce your working hours where through circumstances beyond its control it is unable to maintain you in employment or maintain you in full employment. You will receive as much notice as possible prior to such lay off or short time. You will not be paid during the lay off period. You will be paid only in respect of the hours worked during periods of short time.”

The Union outlined in May 2020, the Complainant had been informed by the respondent that she was being placed on short time, her weekly rate of pay was adjusted, and she was not paid his 39 hrs per week over this period. 

The Union submitted that the deduction was not required to be made by virtue of statute, or contract and was not underwritten by complainant consent.

While the Complainant understood the respondents operating challenges, she disputed any legal authority to decrease her wages. She participated in the short time roster in 2020 and in 2021 under protest.

The Union submitted that reasons leading to imposition of short time had varied at the company, but all had resulted in loss to the Complainant, who contended that she was saved from such a deduction in wages by contract.

The Union outlined that the company is unionised and there is no provision for lay off / short time without pay.

The Union drew on legal arguments made in ADJ 23761 and the Labour Court in PWD 2212

The Union contended that the matter had already been thrashed out and resolved at these fora and recorded a concern to be back at “square one “at this hearing.

Cases relied on:

Panel Duct v Brian Mulhare

Steffan Chimmel and ors v Concast Precast Limited

Justice Jelp in Devon and Rosser (1906) 2KB 728

O’ Reilly v Irish Press (1937) 71ILTR 194

The Union read the prepared outline chronological submission into the record.

The Complainant exhibited a summary of DSP payments received during 2021, summarised as €852.60 in job seekers benefit.

Complainant Evidence:

The complainant outlined that she had worked as a Quality Auditor for 29 years with the company. She submitted that there was no provision in her contract which permitted the deductions in May she had been met with over 2020 -2021.

She understood that she had also been deducted her 1% bonus payment. She had not availed of TWSS and claimed Social Welfare on permitted days.

She recalled that she was notified of days of through her supervisor by text message.

She had submitted a grievance in respect of the deductions to Human Resources but had not received a response.

During cross examination, Ms Crosby referred Ms Donohoe to documentation from DSP. Ms Donohoe said that she had secured information on job seekers from the notice board. It was paid at daily rate of €40.00.

She reaffirmed that she was unaware of any response to her grievance from the house committee. She was aware of communication on a notice board, but no individual response issued.

Ms Donohoe disputed receiving her complete bonus.

Due to a distinct lack of clarity on the interface of social welfare payments set against salary paid during 2020 and 2021. I asked the Complainant to provide some clarity on the amount appended to her submission.

Post hearing, the complainant produced a one-page document which addressed an overlap of social welfare payments, illness and job seekers benefits but no real clarity.

The Respondent was dissatisfied at this submission. Ms Crosby outlined that the claim for job seekers was significantly overreached by the complainant by 11 days and this should be considered and weighed against any award of compensation.

In conclusion, the Union summarised that there was no contractual term that allowed for this deduction in wages. Consent for deduction was not secured from the complainant. The practice of compulsory reduced working week could not safely be regarded as custom and practice or recognised as notorious.

The Respondent operates a large Manufacturing plant across two sites in Abbeyfeale, Co Limerick and Mallow in Cork. The Respondent submitted that these 5 cases are agreed as test cases for WRC claims on behalf of 314 employees over the years 2020-2022.

The Respondent employs 850 employees across both sites in the manufacture of automotive products for the car industry.

It was the Respondent case that since March 2019, the company had faced serious and challenging threats to operations. During this time, they had had made the Union fully aware of these challenges.

The evolution of the impact of Covid 19 pandemic hit the Company early in February 2020. The Company entered planning mode to formulate a contingency plan.

The Respondent exhibited an internal message to staff dated March 5, 2020, from the Managing Director

The Company had a material shortage. No major impact envisaged until 27 March 2020. Both Plants were shut down 16 March 2020 to be managed through annual leave / unpaid leave. A commitment to “give a weekly written update every Tuesday to avoid rumour and keep people informed “.

This was followed by a joint plant shutdown 25 March 2020 to 27 April 2020. Employees were advised to claim covid 19 support payments.

The Temporary Wage Subsidy was introduced in the Company in April 2020 and employees were categorised as having three different profiles.

The Company presided over a phased re-opening through 100 employees across both sites with plans to escalate to full capacity over time.

Operating challenges continued into 2021 and the Respondent envisaged having to take immediate measures to send staff home in the absence of work for them.

The Company outlined the distinction on contingency required for

“Small material shortages “

  “Large material shortages “manifested by production line shut down.

In the case of the latter, measures such as redeployment, voluntary time off, holidays, banked hours, a minus account, flexi banks were offered as contingency.

Production re -allocated from Thursday to Friday to Saturday and Sunday (over time)

No visible improvement followed and shut down days on production were implements, with all non-production employees required to take one day off at that time. Again, options of holidays, banked hours, minus accounts flexi banks and social welfare benefits were flagged as contingency.

During this time, the Union advised they wished to enter talks on a new pay deal. The Labour Court in LCR 22526 recommended the appointment of an independent financial expert. Ultimately pay increases were agreed for July 2022. The Company continues in recovery mode financially.

In addressing the instant claim for € 2,268.93

March 16, 2020 was a shutdown day for the entire plant.

The Respondent submitted that €165.01 had been paid in respect of the public holiday 3 August 2021. The claim is overstated by €41.22.

The Respondent exhibited screenshots of pay analysis.

The Respondent position captured an assurance that the bonus payment had been discharged. Ms Crosby made a detailed submission on an elevation in days covered by the DSP daily rate, which served as a variant to the 10 permitted daily payments for this time.

Evidence of Margaret Kelly:

Ms Kelly had a 31-year association with the respondent business. She gave evidence on the nuances of how the three categories of wage subsidy/ top up payments and PUP interfaced with staff salaries during the pandemic. She also explained the logistics around challenges on securing supplies for the business in Asia.

Ms Kelly confirmed that the Respondent had agreed with the In-House Union Committee that staff grievances   resulting from the reduced working week would be heard as a collective grievance. The Union changed direction by referring this matter out to WRC as   test cases.

She confirmed that the grievance outcome validated the company’s actions, based on the options open to it.

Ms Kelly outlined that six weeks lay off occurred 23 March -5 May 2020, save for some essential workers. She said DSP Officials met with staff to explain options for support payments.

During cross examination, Ms Kelly confirmed that the notification of reduced working week was communicated via a text message. (Samples referred)

Ms Kelly confirmed that the 1 %, 2%, 3% bonus of annual salary reflected in the contract for half the workforce was preserved and paid. All staff received the Christmas bonus.

The annual leave was delineated on the pay slip, but the categorisation of the three categories was not.

She qualified that Operators did not receive bonus as a norm.

In addressing Ms Crosbys redirect, Ms Kelly clarified that there were a “certain few grievances “directed at lay off periods.

On behalf of the Company, Ms Crosby outlined the historical framework of 3 shifts at the business, now working at 4 shifts. The Company made collective redundancies in 2008 and began recruiting again for a new line post 2010.

Two of the complainants’ workdays, two evenings, of which the complainant in the instant case is one and one nights.

Employment at that time stood at 750. Following a recruitment freeze, the number stands at 600.

Ms Crosby submitted that the Respondent had faced an extremely challenging trading period and had not fully recovered.

The periods of reduced working at the plants were motivated at securing an equilibrium at the employment and to militate against having to let newer employees go.

The Respondent emphasised the complexity of the matter when they pointed to the dichotomous workforce within the Union membership, all of whom were covered by the In-House Agreement which reflects the potential for short time/lay off.

She directed the Adjudicator attention to the provisions   of Section 6(2) of the Payment of Wages Act, 1991, and the specific clause “if any” in relation to compensation.

It was the Respondent earnest position that no compensation should be paid in this matter, mindful of the extra ordinary economic climate which served as context and background to the claims made.

The Respondent submitted that an award of compensation against the company at this time would be unjust projected as over €225,000 in nature.

Ms Crosby submitted that the Company had taken fair reasonable and proportionate steps to navigate through the exigencies of a national pandemic and uncertain supply chains.

Finally, the Respondent cautioned against a culture arising where “double compensation “would arise against the state and the employer. Chimel

In drawing on Byrne v Johnson Bros ltd PW 473/2011, where a climate of 30% decrease in sales prevailed 2007-2009 supported an EAT reliance on “nil compensation “award in the face of “fair and reasonable actions by the company “in accordance with Section 6(2) of the Act. 

I have been requested to consider the facts of this conjoined case and to decide whether the deductions relied on by the parties constitutes a contravention of Section 5 of the Payment of Wages Act, 1991.?

CA-46164-001   €1608.88

In arriving at my decision, I have considered both parties carefully prepared submissions. I have reflected on these.

I have had regard for the Union clarification of the DSP overlaps and the respondent disputed response in that regard.

I have also had regard for the evidence adduced by the parties themselves.

This case emerges as a legacy of the national pandemic. It occurred in a factory challenged with inconsistent and competing supply chains, set against a dichotomous workforce on lay off /short time. It also occurred within the period of “storm, stress, and uncertainty “which we can thankfully look back with a little space and relief as the National Pandemic. There are economic and human factors at play here.

In addition, following the Labour Court deliberations in PWD 2212, the State has been found to have an association in the case, arising from the concurrent DSP payments as explained by Ms Kelly in evidence. This amounts to three entities within a live employment relationship.

I wish to thank Ms Crosby for her clarifications on the breadth of these DSP support payments.

For my part, I have approached this case through my permitted jurisdiction in Section 40(8) of the Workplace Relations Act, 2015.

8) An adjudication officer shall be independent in the performance of his or her functions.

While I accept that I am bound by the relevant decisions of the Higher Courts, I am also bound to conduct my own objective examination of the facts of the case as a precursor to my decision.

My Inquiry occurs within the law set down in the Payment of Wages Act 1991, specifically, Section 5 and Section 6

Regulation of certain deductions made, and payments received by employers.

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.

(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 worth a moment for me to reflect of the Head of the Act from 23 July 1991

AN ACT TO PROVIDE FURTHER PROTECTION FOR EMPLOYEES IN RELATION TO THE PAYMENT OF WAGES, TO FACILITATE THE PAYMENT OF WAGES OTHERWISE THAN IN CASH, FOR THAT PURPOSE TO REPEAL THE TRUCK ACTS, 1831 TO 1896, AND RELATED ENACTMENTS AND TO PROVIDE FOR CONNECTED MATTERS. [23rd July 1991]

BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:

Payment of Wages are the glue that binds employers and employees. It is a consideration for the mutuality of obligation between the parties and a definite cornerstone in what can sometimes be a complex economic relationship.

The contract of employment is the bedrock of this relationship.  The Law on Payment of Wages promises “further protection “. It clearly delineates the narrow circumstances, where a deduction of wages is permitted in Section 5(1).

I have been requested to examine the facts of this case to ascertain whether three spans of reduced working which commuted full pay to modified pay, albeit with statutory supports, amounted to a breach of section 5 of the Act.?

The Union has focused their presentation on a certain amount of bewilderment as they honestly believe that this case was properly decided through ADJ 23761 and PWD 2212. They have questioned the relevance of revisionism.

The Respondent has adopted a different approach as the findings in PWD 2212 had not been bedded down and were subject of tax advice. The Respondent articulated very clearly against any award of compensation.

It is of note that PWD 2212 has not been appealed on a point of law.

In the meantime, the parties have concluded a new pay agreement.

For my part, I was struck early on in this case by the dichotomous workforce which now stands at 50%, who hold a contractual clause which mentions lay off/ short time and 50%, inclusive of the complainant, which does not. This must be a difficult situation to manage.

I am satisfied from the complainant’s evidence that the circumstances of imposed time off placed her in a state of confusion.

I am also satisfied that the Company at corporate level was motivated by a feared threatened viability and extinct supply lines.

This is a Unionised employment. This set of circumstances is ripe for collaboration, discussion, dissent, and all that goes with exploring the potential for a collective agreement. I fully understand that presents a challenge for both parties.

Instead, this matter has drifted unresolved, in part, into a 6 monthly revolving door before the States Employment Rights Forum, the WRC, due to the six-month rule within Section 41(6) of the Workplace Relations Act of 2015

(6) Subject to subsection (8), an adjudication officer shall not entertain a complaint referred to him or her under this section if it has been presented to the Director General after the expiration of the period of 6 months beginning on the date of the contravention to which the complaint relates.

The Union has not acted under breach of contract.

I would have preferred to have found a more profound inter party engagement on both the “unease and dread “spoken about by the complainant and the “genuine fear of commercial unviability “spoken about by the respondent. I note the recorded disagreement between the parties in the Respondent documents dated 25 February 2021 and an awareness of the eventuality of third-party trajectory.

 It may have been more helpful to seek to elevate discussions to a higher level than a strategic grievance process referred to in Appendix 13(May 17, 2021) of the Respondent submission.

This grievance, referred to as a collective grievance but not linked to a named cohort, resulted in a validation of the reduction in hours by the respondent, in what to my mind, at least resulted in a

 “Judgement in their own cause “. Ms Kelly signed as the decision maker and referred to this in her evidence.

I appreciate that the economic and pandemic environment at this time was unprecedented, however, I would have liked to have seen a more robust exhaustion of internal procedures.  I am struck by the complainants own evidence in this matter when she was certain that she had not received an individualised response to the grievance.

Perhaps in time, the Parties may reflect on this opinion, which is made in good faith and in the interest of optimal staff relations.

I accept the Respondent confirmation that pension payments continued to be submitted on the macro unaltered wage for the complainant. I also accept that the bonus payment followed uninterrupted, which is reassuring.

In Kostal Ireland GMbh and Gabriel DeLee PWD 2212, the Labour Court in drawing from the High Court in Balans v Tesco Ireland ltd [2020] IEHC 55,

 has set the test on identifying whether a deduction of wages has occurred?

1 Were wages properly payable?

I am satisfied that the complainant was entitled to receive her contractual wage €804.00 (ex-shift allowance gross basic) prior to being told not to attend work. 

CA-46164-001   outlined a claim for loss of 10 days pay from 2 April to 10 August 2021, €1,608.88

The Complainant did not receive either TWSS or EWSS. Instead, she claimed job seekers benefit for year 2021 at €852.60 to cover her absent pay.

The Respondent is clear that there was a significant overclaim by 11 daily rates in this regard. They also contended that the claim was overestimated by a further €40.00.

While I fully accept that the company had concluded the TWSS/ EWSS reconciliation with the State, it seems to me that as the matter on whether time off was to be paid or unpaid has caused a delay in engaging in a reciprocal DSP reconciliation exercise with the complainant.

2 Was the deduction made lawful in the circumstances of section 5(1)?

I accept the complainant’s evidence that she was told to stay away from work for the days specified in her submission, save August 3, 2021, for which she received payment I have taken account of the circumstances attributed to this by the Respondent.

I cannot accept that a reference to potential for lay off in the Union Management historical agreement could be safely considered as an authority to lay staff off without payment.

The Complainant referred to these absences as short time in evidence and on her claim form.

I have not identified an enabling clause for this direction in her contract of employment.

I go back now to the Roscommon Circuit Court, which followed an analogous pathway as travelled by the parties in this case.

This is the Circuit Court case of John Lawe v Irish Country Meats (Pig Meats) ltd [1998] ELR 266, the facts of which set a context of where staff were placed on protective notice following a dispute on a requested increased standards in a boning dept. Following a clarification from the Labour Court, work resumed.  Industrial action occurred, but the complainant in the case was not a participant. The Complainant sought to recover wages lost over a 10-day period, plus damages at the District Court.

This gave rise to the respondent contention that the company had authority to lay off without pay against a shortage of raw materials, slackness of work or seasonal problems through a system of custom and practice.

 White J held, following an incisive commentary, on appeal from the District Court

“… The Company was not entitled on the plaintiffs return to work to withhold his basic pay 19 to 26 July 1996.”  

Judge White drew from the then Employment Law Book summarised by Forde:

“Right to Lay off”

Absent a term in the contract to the contrary, the employer’s fundamental obligation is to pay the agreed remuneration for the times of work during which the employee I prepared to work (Hanley v Pease and Partners [1915] 1KB 698.

Ordinarily an employer is free to lay off workers for any reason provided he continues to pay them. A lay off without the normal agreed remuneration can be treated by the employee as a dismissal.     

 What occurred in the instant case was not Lay off as reflected in Section 11 of the Redundancy Payment Act, 1967. The notification was casual by global text and in the instant case, communicated by a supervisor. This did not comply with the notification imperatives for lay off, neither was it short time.

Instead, I must conclude that the Complainant was directed to stay away from work and deducted pay for that purpose.

I find that the Respondent went too far when they reduced pay without authority.

Both parties accept that the complainant did not consent to the deduction.

It is also an important consideration for me that the Respondent did not rely on any of the typical statutory notification forms which process lay off /short time. It is also of note that during the circumstances of these cases, a complainant could not claim redundancy from a lay off situation due to the passage of Emergency Legislation which amended Section 12 of the Redundancy Payments Act, 1967

Operation of section 12 - emergency period

12A. (1) Section 12 shall not have effect during the emergency period in respect of an employee who has been laid off or kept on short-time due to the effects of measures required to be taken by his or her employer in order to comply with, or as a consequence of, Government policy to prevent, limit, minimise or slow the spread of infection of Covid-19

I note that the notification of these down periods was authorised by two managers, neither of whom were available at hearing.

I must, therefore, conclude that the deduction was an unlawful deduction of a properly payable wage. Dunnes Stores (Cornelscourt) ltd v Lacey {2005] IEHC 417 applied

3 Was this recognisable as Custom and Practice?

I must assess the facts presented to ascertain whether the respondent can rely on custom and practice as a defence in this case?

What this means is whether I can determine that the practice of directing employees to stay at home was commonplace and universally recognised and understood at the plant.

Both parties accept a previous reliance on the practice of direction to stay away from work in 2008. The Union describe this as an isolated incident, and one hotly contested by them.

The Respondent has pointed to 2008 and the necessary actions 2020-2021 as an evolution of proportionate management understood by all at the business. They stressed the options, short of lay off / short time made available to the complainant.

I have considered the facts presented at hearing through the eyes of the reasonable man:

James Hayes v O’Kelly Brothers Civil Engineering ltd UD268/2001, which outlined the meaning of “reasonable “in a lay off situation.

“Reasonable here does not mean bona fide because an employer may bona fide believe that business difficulties are only temporary while an objective outsider e.g., an accountant might see it otherwise. What is reasonable in the context must be assessed by the objective test long recognised by the common law – the test of the reasonable man “

This is an important consideration set against the dichotomous workforce in this case.

In O Reilly v Irish Press [1937] 71 ILTR 194 Maguire J set down a test for custom and practice

“So notorious, well known and acquiesced in that the absence of agreement in writing, it is to be taken as one of the terms of the contract between the parties. It is necessary in order to establish a custom of the kind claimed that it be shown that it was so generally known that anyone concerned should have known of it or easily become aware of it “

I accept that the complainant objected to the direction by means of a grievance and had not given her consent to the change. I was taken aback that she had not received an outcome on this grievance.

At the very minimum, this collective grievance process is proof that the practice of the company shutdown did not amount to a custom and practice. In the document dated May 27, 2021, the company clarified that it was not a lay off situation.  The Company documents also reflect the Union opposition to these reduced hours on 25 February 2021 and mark the progression to third party.

I must conclude that the practice of directing employees away from work was not a custom and practice at the company. Instead, it was an effort to manage the business through the pandemic which was contested for pay purposes by a cohort of the work force, which included the complainant.

I am also certain that while the company engaged in a similar practice in 2008/2009, it could not be viewed as authority for placing the complainant on short time/ lay off without pay. It was clearly a disputed issue at the factory and not one of acquiescence.

In all the circumstances of this case, I find that the complainant was met by an unlawful deduction in wages contrary to section 5(1) of the Act. 

1 CA-46164-001

 I find the claim is well founded.

Application of section 6(2) of the Act

Complaint to adjudication officer under section 41 of Workplace Relations Act 2015]

6. (1) A decision of an adjudication officer under section 41 of the Workplace Relations Act 2015, in relation to a complaint of a contravention of section 4C or 5 as respects a deduction made by an employer from the wages or tips or gratuities of an employee or the receipt from an employee by an employer of a payment, that the complaint is, in whole or in part, well founded as respects the deduction or payment shall include a direction to the employer to pay to the employee compensation of such amount (if any) as he considers reasonable in the circumstances not exceeding—

(a) the net amount of the wages, or tip or gratuity as the case may be (after the making of any lawful deduction therefrom) that—

(i) in case the complaint related to a deduction, would have been paid to the employee in respect of the week immediately preceding the date of the deduction if the deduction had not been made, or

(ii) in case the complaint related to a payment, were paid to the employee in respect of the week immediately preceding the date of payment,

or

(b) if the amount of the deduction or payment is greater than the amount referred to in paragraph (a), twice the former amount.

I have listened carefully to both parties’ submissions on how they see this case being resolved if compensation became a factor.

The Union sought compensation in accordance with the provisions of the Act. The Respondent sought an award of “nil compensation “to reflect the financial trading reality faced by the Respondent and one from which the company had not fully recovered.

I was not met by any financial reports to point me towards an independent audit of the company annual reports. I found this unusual when I considered that a new Pay Agreement was informed by such a document.

I have not been given proof of inability to pay if compensation evolved in this case.

However, what I did discover is that the respondent respected and honoured the full bonus and pension payments which for me at least pointed to a certain financial stability when the company did not make pro rata deductions in these benefits, one of which is reckonable under this Act.

I have also become aware of the role of state payments of support in this case which ran side by side with the deductions. I found some opaqueness in how these were both administered by the company and understood by the complainant.

I am aware of a reconciliation practice adopted by some employers in relation to reconciling statutory illness benefit against salary, where an employer deducts the value of illness benefit from salary.

No such reconciliation exercise took place between the contracted parties or indeed the job seekers benefit (either 21 claims or 10 claims)

I fully accept that the company has since reconciled the TWSS/EWSS payments with the State but has not addressed the JSB overlap directly with their employees. Neither have I seen any P21 tax rebalancing statements from the complainant.

I must also take this opportunity to remark on my concern at some inconsistencies for the parties in relation to the associated DSP payments as they were claimed in a reported lay off/ short time situation. However, I have not found that these occurrences equate with lay off /short time as permitted by the Redundancy Payments Act, 1967, as amended.  This places the categorisation of this time spent away from work into a very “grey area “.

The matter of compensation becomes further complex when I consider the recent Labour Court Decisions

  Primark ltd T/A Penney’s and Romana Vancekova PWD 2250, on 25 November 2022

This involved the case of a Part time Retail Assistant, subject to a pay cut in the first quarter of 2021. She was paid 80% of salary less statutory deductions.

“During the third lock down, she received a weekly payment of €172.43. Her payslip did not specify the amount of any deduction from her contractual entitlement and gave no detail relating to a “support payment “

The Complainant in that case “she was at home on standby waiting and ready to come to work at any time her employer required “She sought her contended average weekly salary.

This company did not avail of the EWSS scheme. There was no collective agreement in place.

In the findings of the Labour Court, Ms Connolly, Deputy Chair remarked:

“Emergency measures introduced to limit the application of employment rights legislation during the pandemic did not amend or change obligations or protections provided under the Payment of Wages Act.”

The Court went on to find that an unlawful deduction had occurred.

However, in moving forward into considering redress, the Court moved into “the wider circumstances in which the deductions occurred “

The Respondent and the Union had engaged.

The Complainant had received 80% pay, which was accepted by the vast majority, while not physically working.

The Court found an award of “nil compensation “to be reasonable.

In Aer Lingus ltd v Caitriona Jones PWD 2248, November 10, 2022

On this occasion, the complainant claimed a loss of in excess of €15,000 over a 6-month period and argued an absence of lay off contractual clause. The Respondent argued obligatory hours and salary changes which arose from the climate of the national pandemic.

On this occasion, the Chair of the Labour Court, Mr Foley found that the deduction had been unlawful but not followed by compensation.

He outlined the factors considered prior to this finding.

1 the impact of the global pandemic on respondent business.

2 international restrictions on flying

3 policy interventions of subsidies and supports from Government.

4 measures taken by the respondent to save positions.

5 universal applications of measures

6 the Union had not raised a claim against the changes implemented.

7 All hours worked were paid.

In finding that the claim was not accompanied by compensation, the Court reasoned.

“It is also clear and undisputed that the steps taken by the employer were applied evenly across the workforce and were, in the unprecedented circumstances which prevailed, acceptable to the vast majority of the entire workforce “

I have reflected on the similarities of both cases to the arguments relied on by Ms Crosby for the Company.

However, I have found the facts in the instant case can be distinguished by the lack of Union approval or indeed engagement prior to the deduction. I am strengthened in my view of this by the record of Union disagreement on 25 February 2021, which captured the intention to refer to third party.

It is clear to me that the deductions in this case remained a contentious and unresolved issue at the plant.

The facts of this case are therefore distinguished from the earlier cases.  For me, the Union in this case clearly contested the imposition of time spent away from work. As I have stated, I would have liked to have seen a more robust grievance procedure, perhaps with an independent chair, none the less, I have identified a clear pathway of protest from this Union which places the facts of this case on a separate footing.

In addition, I have taken account of the Labour Court findings in PWD 2212, which did not place a restriction on payment of compensation.

I have found that the complainant was subject to an illegal deduction of wages in

1 CA-46164-001

Section 6(2) of the Act provides for a payment of compensation as I consider reasonable.

a) the net amount of the wages (after the making of any lawful deductions therefrom) that—

(i) in case the complaint related to a deduction, would have been paid to the employee in respect of the week immediately preceding the date of the deduction if the deduction had not been made

I direct the Respondent pay the Complainant her basic pay, pro rata, without shift allowance, in respect of the time directed away from the workplace.

This amount must be off set against the making of lawful deductions, PAYE, PRSI, USC for that period.

 This amount must also reconcile any job seekers benefit payments already paid in relation to the Covid 19 pandemic during 2021.

It may be of benefit for the Parties to meet and engage in a Reconciliation exercise to agree a baseline payment reflective of these composite considerations.

I deem this compensation to be reasonable in all the circumstances.

1 CA-00046164-001

Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaints in accordance with the relevant redress provisions under Schedule 6 of that Act.

Section 6 of the Payment of Wages Act, 1991, requires that I make a decision in relation to the complaint in accordance with Section 5 of that Act.

1 CA-46164-001 I require the Respondent to pay the Complainant €1403.88 (less payment made for public holiday and €40.00 overstatement) in compensation for the contravention of section 5(1) of the Act. This amount is subject to statutory reductions and following an agreed Reconciliation exercise on Job Seekers Benefit received.

Payment of Wages in Covid pandemic impacted business and time spent away from work.