Complainant

Respondent

Parties

Daniel Pender

Sonoma Valley

Representatives

Self-represented

 Anne O'Connell, Solicitor

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-00053618-001

08/11/2022

The respondent is a provider of cash-in-transit services and the complainant commenced employment with them as a cashier in November 2021.  When he was dismissed on May 10th 2022, he was in the role of “banker.”  His employment was terminated following an investigation into the theft of €2,000 on the night of April 15th – 16th 2022.

The penultimate paragraph of the letter of dismissal issued to the complainant by Ms Gonzales on May 10th 2022, states as follows:

“After careful consideration, I am obliged to look at the facts of the case and evidence presented to me, and I believe you are solely responsible for the missing bundle of €20 notes amounting to €2,000.  I have taken the decision to terminate your employment with GSLS with immediate effect.  The company will recover €2,000 from your final pay which represents the missing money.”

When his employment was terminated, the complainant was due to be paid €2,568.84 gross in wages, including pay for holidays not taken.  The respondent had reached a conclusion that he was responsible for the theft of €2,000.  Around the same time as the investigation into this theft was taking place, the Central Bank reported that €5,000 in unfit notes was missing from a batch of notes counted by the complainant before the incident that occurred on April 15th – 16th.  The management decided that the complainant was also responsible for the missing €5,000 and he was paid no wages at the termination of his employment. 

The complainant’s case is that he did not consent to this deduction from his final pay and he claims that the respondent made an illegal deduction from his wages.

In the form he submitted to the WRC, the complainant said that he did not take the €2,000 he was accused of stealing.  He said that the respondent informed him that the money would be deducted from his wages and that his contract contained a clause which permitted them to make the deduction.  He sent an email to the HR director on May 12th 2022, saying, “I do not give consent for GSLS to be reimbursed (as stated in my termination letter) of €2,000.”

It is the respondent’s case that the complainant was solely responsible for the bundle of 100 €20 notes missing from his shift on the night of April 15th – 16th 2022.  In her submission, Ms O’Connell referred to the complainant’s contract, which, under the heading of Remuneration, provides as follows:

“On signing this agreement, you also permit the Company to deduct from your pay any sums which you may owe to the Company, including, without limitation any overpayment, (including overpayment of holiday pay) or any cash advances made to you by the company.”

In his letter of dismissal on May 10th 2022, the complainant was informed that the respondent intended to “recover €2,000 from your final pay which represents the missing money.”  The respondent’s director of HR confirmed this in a phone call to the complainant on May 11th and in an email on May 12th.

The complainant was due to be paid €2,568.84 gross for his final wages, including outstanding holidays and public holiday pay.  About two days after he was dismissed, the respondent discovered that a further €5,000 was missing from another shift when the complainant had been working.  The Gardaí were notified and the respondent decided to withhold the full amount due in wages until the Garda investigation provided more information.  The respondent has been informed that a file has been sent to the Director of Public Prosecutions in relation to the two missing sums of €2,000 and €5,000.

In her submission, Ms O’Connell referred to the decision of the former Employment Appeals Tribunal (EAT) in Ryanair Limited v Alan Downey[1].  The Tribunal in this case found against Ryanair and held that the fact that a clause in an employee's contract which provides for a deduction did not of itself justify the deduction.  For the deduction to be lawful, the employer must comply with the relevant provisions of section 5(2) of the Payment of Wages Act 1991, giving the employee one week's notice before making the deduction and complying with the requirement that the amount of the deduction is fair and reasonable.

Ms O’Connell submitted that the complainant was notified in his dismissal letter on May 10th 2022 that a deduction of €2,000 would be made from his final wages.  He was then notified on May 13th that the deduction would cover all the money that the respondent considered they were owed by him.  The respondent met the provision at section 5(2) of the Act by giving advance notice of the deduction which was initially to be a sum of €2,000 and was subsequently revised to be in respect of the full amount owing.

Ms O’Connell argued that the respondent did not deduct more than the amount that the complainant owes.  It is the respondent’s case that the deduction from the complainant’s final salary was lawful as it was in line with the terms of his contract of employment, he was notified of the deduction in advance and the amount deducted did not exceed the amount he owes to the respondent.

Deductions from Wages

Section 5 of the Payment of Wages Act 1991 sets out the very limited circumstances in which an employer may make a deduction from an employee’s wages.  Subsection 1 deals with deductions which are permissible under statute, for example, tax and social insurance, or a deduction provided for in an employee’s contract of employment, such as pension contributions:

(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.

Subsection (2) deals with the circumstances in which an employer proposes to deduct money from an employee’s wages (a) because of something that the employee has done or has not done (“an act or omission”) or, (b) in return for the employer providing the employee with a product or a service.   In the case under consideration, our focus is on a deduction because of an act or omission on the part of the complainant and subsection (b) is not relevant to this complaint.   

(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) not relevant

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

(v) in case the deduction is in respect of compensation for loss or damage sustained by the employer as a result of an act or omission of the employee, the deduction is of an amount not exceeding the amount of the loss or the cost of the damage, and

(vi) in case the deduction is in respect of goods or services supplied or provided as aforesaid, the deduction is of an amount not exceeding the cost to the employer of the goods or services, and

(vii) the deduction or, if the total amount payable to the employer by the employee in respect of the act or omission or the goods or services is to be so paid by means of more than one deduction from the wages of the employee, the first such deduction is made not later than 6 months after the act or omission becomes known to the employer or, as the case may be, after the provision of the goods or services.

The respondent believes that, during his shift on the night of April 15th – 16th 2022, the complainant stole €2,000.  They argue that his conduct falls within the meaning of “an act or omission” at section 5(2)(a) of the Act.  As this is a complaint under the Payment of Wages Act, my task is not to consider the reasonableness or otherwise of the respondent’s decision to dismiss the complainant, but to consider if, having investigated the matter and reached the conclusion that he took the money, was it legal to deduct it from his final wages?

Findings

Having reached a conclusion that he was responsible for the missing €2,000, the conditions according to which the respondent may be permitted to make a deduction from the complainant’s wages can be summarised as follows:

1.           There must be a clause in his contract of employment that provides that missing money for which he is responsible may be deducted from his wages;

2.           Taking account of the circumstances, the amount of the deduction must be fair and reasonable;

3.           Before the “act” of taking the money, the complainant must be in possession of a copy of his contract;

4.           One week in advance of the deduction, the complainant must be notified in writing of the employer’s intention to make the deduction;

5.           The amount of the deduction must not exceed the loss sustained by the respondent arising from the complainant’s conduct.

On May 10th 2022, the complainant was informed in his letter of dismissal that €2,000 would be deducted from his final wages.  Shortly afterwards, the respondent was notified by the Central Bank that an additional €5,000 was missing from another shift that the complainant worked on and they concluded that he was also responsible for taking that money.  He was not paid any of his final wages of €2,568.84.

When he joined the company less than six months earlier, the complainant signed a contract permitting the company to “deduct from your pay any sums which you may owe to the Company…”  In his email to the HR director on May 13th 2022, he said,

“Under no circumstances have I consented to allowing GSLS recoup money that you have accused me of taking/being responsible for going missing.  I maintain my innocence and have not be (sic) found guilty in a court of law.

I am appealing this decision by following the process accordingly however, if this fails, I will be taking this further by following the legal route.

I have read my contract carefully and nowhere have I signed consent to GSLS to recoup money that goes missing from the cash room.”

It is apparent from this that the complainant was in possession of his contract and that he read the clause on which the respondent relies.  He is correct when he says that his contract does not state that “money that goes missing from the cash room” may be deducted from an employee’s wages.  His contract provides that the respondent may deduct “any sums which you may owe to the company…”  It is my view that, having carried out an investigation, and, having given the complainant an opportunity to explain what happened on his shift on the night of April 15th – 16th 2022, the respondent was correct to conclude that the missing €2,000 was money owed by the complainant.  I am further satisfied that the provision in the complainant’s contract is sufficiently clear for him to understand that, in circumstances where his employer concludes that he stole money, that that money is owing to his employer and that his contract provides that the money owed may be deducted from his wages.

Conclusions

I am satisfied that, in respect of the deduction of €2,000 from the complainant’s wages, the respondent has met the conditions set out at section 5 of the Act and that theft is encompassed by the meaning of an “act” at section 5(2)(a).

Before he was accused of the theft, the complainant was in possession of a copy of his contract which provided that money owed to his employer may be deducted from his wages.  I am satisfied that, at the termination of his employment, it was reasonable for the respondent to conclude that the complainant owed them €2,000.

The complainant was dismissed by the time the respondent discovered that €5,000 was also missing.  As they did not involve the complainant in their investigation regarding this missing amount, I find that the deduction of the remaining €568.84 from his wages does meet the requirement of section 5(2)(ii) and was not reasonable.

I am satisfied that, in accordance with section 5(2)(iv), the complainant was notified more than one week in advance of the respondent’s intention to make the deduction from his wages.

In conclusion therefore, I find that the deduction of €2,000 from the complainant’s wages was in accordance with the provisions of section 5 of the Payment of Wages Act and was not an illegal deduction.  I find that the deduction of €568.84 was an illegal deduction.

I decide that this complaint is, in part, well founded.  In accordance with section 6 of the Payment of Wages Act (as amended), I am required to direct the respondent to pay compensation as a net amount.  Based on the difference between the complainant’s gross and net pay on his complaint form, I decide that the respondent is to pay the complainant compensation of €470.

Illegal deduction, theft