Complainant

Respondent

Parties

Lukas  Cerny

Solarstream Installations Limited

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-00057088-001

12/06/2023

The complainant was employed as an Installer from 26th April 2021 up to 26th May 2023 when the respondent dismissed him. He earned €700 gross per week. The termination of employment arose from an outside job undertaken on Saturday 20th May 2023 outside normal working time. The respondent alleges the use of company equipment and is withholding wages pending the resolution of the complaint. The complainant claims two weeks’ pay and three weeks accrued holidays which are unpaid to date.

The complainant gave evidence that he was doing outside work on Saturday, 20th May 2023 when Mr Browne arrived at the site and claimed company equipment was being used on the job. He was suspended for one week and then he was dismissed. He claims that he is due a payment for 10 working days (€1400 gross), 5 days which he worked and the other 5 days when he was on suspension. He also claims that he has not been paid for the accrual of 3 weeks holidays (€2100 gross).

He said that a contract issued at the commencement of his employment which he did not sign as there were several issues in dispute with his contract.

In his second submission after the hearing, he outlined the issues in dispute as follows.

·       time in lieu

·       overtime

·       lay off without notice

·       possible deduction of wages for training

He clarified in the second submission that he was seeking payment for a minimum of two weeks holidays. He confirmed that he offered to pay an amount for equipment as goodwill as he could not provide a receipt for the purchase of the equipment used for the outside job.

Mr Browne gave evidence of the sequence of events leading up to the dismissal. After he came across the complainant doing an outside job at the said weekend, he met with him on Monday 22nd May for approximately one hour. There was to be a follow-up meeting that Friday 26th May and the complainant did not turn up. He said that initially the complainant was prepared to agree on a payment to the company and then reneged on this. He said that the complainant did not assist in clarifying matters as part of his investigations.

He alleged that company equipment was used by the complainant and the full value was calculated at €1372. He said that the company intended to offset this amount from wages due to the complainant.

He had calculated the holidays due to the complainant as 5.5 days amounting to a gross payment of €770.

He provided further information on the employment contract and exact wages due after the hearing, as requested. This further information included a payslip for week ending up to 19th May 2023 which showed that €700 gross wages and €770 gross for accrued annual leave was being withheld to offset against alleged use of equipment to the value of €1372.

In essence the total value of net wages due was €1023.46 and the respondent was seeking to make a deduction of €1372.

The Law

Section 5 (1) of the Payment of Wages Act 1991 provides-

An employer shall not make a deduction from the wages of an employee (or receive any payment from an employee) unless-

(a)    the deduction is required or authorised to be made by virtue of any statute or any instrument made under statute,

(b)    the deduction 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 prior consent in writing to it.

Contract of Employment

It is common case that where no employment contract exists, an implied contract is assumed based on the conduct and ongoing relationship of the parties. In this case, the contract is available although there were several issues in dispute. As per the complainants second submission, the issues in dispute were-

·       time in lieu

·       overtime

·       lay off without notice

·       possible deduction of wages for training

As all the other terms of the contract were on notice to each party and no issues were raised, it can be implied that terms other than the above disputed issues are valid. Even though the contract was not signed by the complainant, there is an implication that the contract existed and formed the basis of the employment relationship, albeit that some of the terms were in dispute.

Wages

The first issue is to establish the wages that are properly payable to the complainant.

It was confirmed that he was not paid for one week that he worked up to 19th May 2023 which is a gross payment of €700.

The complainant also claims that he is owed wages for the week he was suspended without pay from 22nd May 2023 to 26th May 2023.

The contract of employment does not make any reference as to whether this week of suspension should be paid or unpaid.

At clause 3.2 of the contract, it states-

During your employment you must devote your time, attention and skills exclusively to the business of the firm and you must use your best endeavours to promote the interests, business and welfare of the firm. You will not, during the continuance of your employment, engage in other work or employment for any other party without prior written consent of the firm. You must avoid outside business relationships, or business dealings with any of the firm’s customers/competitors.

As the contract is not informative as to whether the suspension should be paid or unpaid, the default is to refer to the Code of Practice. Where no policies or procedures are in place, it is common case that the Code of Practice becomes operative.

S.I 146 of 2000 states- ‘An employee may be suspended on full pay pending the outcome of the investigation into an alleged breach of discipline.’  

The complainant is seeking payment for the 5 days in question. The respondent denies payments are due as 19th May 2023 was effectively the last day the complainant worked. The respondent also relies on clause 11.5 of the contract which states-

Solarstream Installations Limited shall be entitled to terminate your contract without notice or payment in lieu of notice if you are guilty of gross misconduct.

I do not accept the respondent’s assertion that there was a dismissal for gross misconduct. Evidence was given by both parties of a suspension period. Also, the parties had a meeting for approximately 1 hour on Monday 22nd May 2023 where the matters of alleged use of company equipment was under discussion/investigation.

The respondent gave evidence that the complainant was unwilling to co-operate or participate in an investigation during the week of suspension. This lack of co-operation is not fully accurate as there were communications between the parties to establish what payment could be deducted by the respondent, even though there was no agreement on the amount. These communications were based solely on the weekend in question even though the respondent wished to pursue a broader investigation.

The code of practice states that the employee “may” be suspended on full pay pending the outcome of the investigation into an alleged breach of discipline. Even though the complainant did not participate in a broader investigation he is seeking payment for this period. He was available for 1 hour on Monday 22nd May 2023, in circumstances where clause 3.2 of the contract may have been breached. Further discussions were to follow Monday’s meeting which could have resolved matters and any subsequent engagements were based on the amount of a deduction.

Due to the lack of co-operation by the complainant on a broader investigation, I find that no wages were properly payable for the week of suspension. This arises due to the contractual term of 3.2 alongside SI 146 which qualifies an entitlement to payment during suspension when it states - ‘may be suspended on full pay pending the outcome of the investigation into an alleged breach of discipline’, as described above.

Accrued Annual Leave

The complainant claimed that he was due three weeks annual leave and in his second submission, he claims a minimum of two weeks which accrued from October 2022 to May 2023. The respondent gave evidence that he was due 5.5 days.

I note from the contract that the leave year ran from January to December. There was no evidence provided by the complainant that he carried leave over into 2023, nor was any details provided of the exact amount of days other than an assertion that he had accrued 3 weeks and then later reduced this to 2 weeks.

In PMC Painting Contractors Limited v. Ms Patrycja Kwindzinska DWT 224, the Labour Court found against the worker in circumstances where there was a general assertion made without any details provided.

Similarly, in this case, the complainant has not provided sufficient evidence that he had accrued two weeks annual leave.

As there is a conflict in evidence with limited details, on the balance of probabilities, I decide the annual leave accrued is as confirmed by the respondent as 5.5 days amounting to a gross value of €770.

Proposed Deduction by Respondent

Having decided that wages of €700 gross for the week up to 19th May 2023, and accrued annual leave of €770 gross is properly payable, I will examine whether the terms of the contract allow for a deduction to be made by the respondent.

Clause 5.4 of the Contract states-

Solarstream Installations Limited shall be entitled to deduct from your remuneration any monies owed by you to Solarstream including but not limited to any outstanding loans, advances, course fees, the cost of repairing or recovering any damage or loss of Company property caused by your neglect and any excess holiday pay.

The clause uses the words – ‘…including but not limited to……’. The clause also uses the words ‘loss of company property’.

I find that the contractual clause adheres to section 5 (1) (b) of the Act as set out above and in principle allows for the respondent to make a deduction.

The next issue is whether there are monies owed by the complainant to the respondent and the amount that can be deducted. The complainant denied at the hearing that he used company equipment when carrying out the job.

He clarified in his second submission that ‘he offered in goodwill to pay for hardware installed at ……. house, as could not provide my receipt of purchase, but not at those conditions and not this amount, as it’s nearly 3 times higher than actual costs of hardware….’

The respondent gave evidence at the hearing that the company’s equipment was used for the job which is why the complainant initially agreed to repay some monies.

Therefore, there is agreement in principle although the amount of deduction is in dispute.

The respondent’s submission includes an email from the complainant to the respondent of 29th May 2023 which states-

1.       I admitted that I cannot provide receipt for consumables used at house in question, therefore I agreed to reimburse you in good faith, I excepted to cover your probable loss of materials, not to pay marked up price with VAT. Note that material in question cost €750 at wholesale suppliers that are more expensive than yours or in range of €500 on marketplace.

The email then later states-

4. You may propose payment plan to cover €750 I am willing to re-imburse you with, alternatively you may give detailed breakdown about the costs occurred, or I can source same consumables in question at my cost and cover unit for unit.

It is unclear whether the above statements at the end of May 2023 are sufficient as consent by the employee for a deduction to be made by his employer as per clause 5(1) (c) of the Act. The Act may have envisaged a more clear-cut consent with the amounts agreed between the parties. 

This email of 29th May 2023 states that the complainant was willing to make a payment, albeit, there was an issue of how much.

In conclusion, and having considered all the relevant evidence, I find that the respondent is legally entitled to make a net deduction of €500 euro from the complainant’s net wages. The authority for this deduction is contained in clause 5.4 of the contract and the goodwill commitment of the complainant to pay some monies. For clarity, I have decided on the amount of €500 based on the correspondence of 29th May 2023 from the complainant.

I find that the complaint is well founded, and that the respondent should pay the complainant net wages of €523.46. This is based on net wages due of €1023.46 less a deduction of €500.

Payment of Wages, Deduction