Complainant

Respondent

Parties

Sonya  Morrissey

Ace Accounting & Taxation Services Ltd

Representatives

  Self-Represented

 Unavailable.

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-00050939-001

31/05/2022

The issue in contention was a Taxation issue between the Respondent Employer and the Complainant arising from the TWSS Covid period Employer subsidy scheme.  The Complainant alleged that she had been left short of €1,173 Euro basic pay and €770 Holiday pay.

The Complainant alleged that she had handed in her Notice on the 24th May 2022. She was the informed that the Respondent employer proposed to recover from her final wages amount due tot eh revenue to a total of some €1,173.

Holiday Pay of €772 as also due to the Complainant and was not paid. An undertaking given on the 30th May 2022 to pay in instalments was not discharged.

The Respondent was unavailable on the day of the Hearing.

In correspondence (e mail of the 30th May 2022) given to the Complainant she had agreed to a monthly deduction arrangement.

3:1       The Law

Payment of Wages Act,1991

Section 5 of the Act regulates “Deductions” made by Employers from Employee wages.

The situation of the Revenue Commissioners is governed by Section 5-(1) -deductions “under statute” and at Section 5-(5)(c).

The Act is quoted, for assistance, below.

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.

(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 the supply 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

Subsection (v) to(vii) not quoted

(3) (a) An employer shall not receive a payment from an employee in respect of a matter referred to in subsection (2) unless, if the payment were a deduction, it would comply with that subsection.

(b) Where an employer receives a payment in accordance with paragraph (a) he shall forthwith give a receipt for the payment to the employee.

(4) A term of a contract of employment or other agreement whereby goods or services are supplied to or provided for an employee by an employer in consideration of the making of a deduction by the employer from the wages of the employee or the making of a payment to the employer by the employee shall not be enforceable by the employer unless the supply or provision and the deduction or payment complies with subsection (2).

(5) Nothing in this section applies to—

(a) a deduction made by an employer from the wages of an employee, or any payment received from an employee by an employer, where—

(b) a deduction made by an employer from the wages of an employee, or any payment received from an employee by an employer, in consequence of any disciplinary proceedings if those proceedings were held by virtue of a statutory provision, or

(c) a deduction made by an employer from the wages of an employee in pursuance of a requirement imposed on the employer by virtue of any statutory provision to deduct and pay to a public authority, being a Minister of the Government, the Revenue Commissioners or a local authority for the purposes of the Local Government Act 2001 (as amended by the Local Government Reform Act 2014), amounts determined by that authority as being due to it from the employee, if the deduction is made in accordance with the relevant determination of that authority, or

 (Underlining by Adjudication Officer)

In plain English therefore the deduction of Tax Liabilities is lawful, but this does not preclude Section 5 (2) (b) (ii) applying.

(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

However, all cases rest on their own facts and evidence presented. These will be considered next.

3:2       Review of the Evidence presented both Oral and Written /Discussion of same

There was no Respondent evidence presented and the Oral testimony of the Complainant was that the Respondent had deducted all her TWSS Tax liability in one Lump sum in the April 2022 salary Payment.

The Complainant had moved on to another employment shortly afterwards.

In reality the regulation of Tax Deductions/Refunds is a matter for the Revenue Commissioners and is not usually brought before the Payment of Wages Act,1991.

However, in this case the Deduction of € 1,173 in one lump Sum where the Net Salary was € 2,863.55 (from Respondent Correspondence) hardly qualifies as being “fair and Reasonable” as per sub section 5 (2) (b) (ii).

Section 6 of the Payment of Wages Act,1991 allows an Adjudication Officer to deem a complaint   “in whole or in part, well founded.”.

Adjudication directions regrading a Revenue Commissioners legal payment are not possible under the Act but some compensation for the lack of a “fair and reasonable” approach is possible albeit in a largely token fashion.

Accordingly, and on the basis of the Complainant untested but sworn oral testimony and the lack of any Respondent contribution other than correspondence to the Complainant (exhibited by the Complainant) an award of € 250 is made in favour of the Complainant for the breach of sub section 5 (2) (b) (ii) -the blunt mechanism of the deduction was not “fair and reasonable.”

Tax Deductions, Unfair and Unreasonable manner of.