Complainant

Respondent

Parties

Pawel  Wzorek

Lily’s Limited trading as Lily O'Brien's Chocolates

Representatives

Self-Represented

Jennifer Murphy and James Kearney

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-00052179-001

10/08/2022

The Complainant was employed by the Respondent from the 12th May 2014. He resigned from his employment with the Respondent and his employment ended on the 28th February 2022. The Complainant was on certified sick leave from the 26th February 2020 until the 28th February 2022. This complaint concerns the payment in lieu of untaken holiday entitlement upon the termination of employment which had accrued while the Complainant was on sick leave.

The Complainant was on sick leave from the 26th February 2020 until the 28th February 2022. The Complainant submitted that while on sick leave he accrued his holiday entitlement of 23 days per annum pursuant to his terms and conditions of employment.

The Complainant stated that the Respondent was incorrect to apply the provisions of the Organisation of Working Time Act 1997 upon the termination of his employment when calculating his entitlement to payment in lieu of untaken holidays which had accrued while he was on sick leave. The Complainant accepted that he had been paid a total of €7,051.56 for 39.5 holidays and 5 public holidays (total of 44.5 days), however, he submitted that he was entitled to the payment of 6.08 additional days pursuant to his Terms and Conditions for Permanent Employees for the period from the 26th February 2020 until the 28th February 2022.    He submitted that the failure to pay him his full contractual holiday entitlement amounted to an unlawful deduction and therefore the Respondent was in breach of the Payment of Wages Act 1991.

The Complainant was on sick leave from the 26th February 2020 until his employment ended on the 28th February 2022. The Complainant was issued with Terms and Conditions for Permanent Employees wherein reference was made to the Respondent’s annual leave policy and its illness policy. The Human Resources Manager gave evidence that while the Terms and Conditions for Permanent Employees stated that the Complainant had an entitlement to 23 working days holiday, in circumstances where he was on sick leave he was subject to the Respondent’s policy on “Absence from Work Due to Illness or Injury” and that employees on sick leave were entitled to continue to accrue their statutory annual leave entitlement only. She stated that contractual annual leave entitlement did not accrue while an employee was on sick leave and that the Respondent paid to the Complainant all monies due and owing to him on the termination of his employment. The Human Resources Manager stated that in circumstances where the Complainant was on sick leave from the 26th February 2020 until his employment ended on the 28th February 2022 the Complainant’s outstanding annual leave entitlement was calculated and was paid in line with the Organisation of Working Time Act 1997. She stated that following queries raised by the Complainant, by email dated the 25th March 2022, the Respondent furnished the Complainant with a detailed calculation of his holiday and bank holiday entitlements and that the Complainant was paid a total of €7,051.56 for 39.5 holidays and 5 public holidays (being a total of 44.5 days).

In making these findings, I have considered the documentation submitted by the parties, the oral evidence adduced at the hearing summarised above and the oral and written submissions made by the parties at the hearing.

Relevant Law:

Payment of Wages Act 1991

In considering whether the Complainant’s wages were the subject of an unlawful deduction as alleged, it is necessary to examine the relevant provisions of the Payment of Wages Act 1991 as amended (hereinafter referred to as “the 1991 Act”).

Section 1 of the 1991 provides the following definition of wages:

"wages", in relation to an employee, means 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, and

(b) any sum payable to the employee upon the termination by the employer of his contract of employment without his having given to the employee the appropriate prior notice of the termination, being a sum paid in lieu of the giving of such notice:

…

The above definition includes holiday pay. 

Section 5 of the 1991 Act serves to regulate certain deductions made and payments received by employers.  

Section 5(1) of the 1991 Act provides as follows:

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.

Section 5(1) of the 1991 Act provides that, apart from tax, PRSI and USC, unless there is a provision in an employee’s contract of employment to deduct wages, without the employee’s written consent, a deduction may not be made.

Section 5(6) of the 1991 Act addresses the circumstances in which wages which are properly payable are not paid:

5(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.

The non-payment of wages that are properly payable to an employee is therefore an unlawful deduction by the employer.  The question to be decided is whether the wages claimed were properly payable.

The Complainant gave evidence that on the termination of his employment the Respondent failed to pay him in lieu his full outstanding holiday pay which he claimed had accrued while he was on certified sick leave from the 26th February 2020 until his employment ended on the 28th February 2022. The Complainant submitted that his entitlement to holiday pay was as set out in his Terms and Conditions for Permanent Employees (hereinafter referred to as his “contract of employment”) and that under the contract of employment he had an entitlement to 23 working days’ holidays per annum and that while on sick leave he accrued his holiday entitlement of 23 working days per annum pursuant to his contract of employment.  

The Complainant submitted that the Respondent was incorrect to apply the provisions of the Organisation of Working Time Act 1997 upon the termination of his employment when calculating his entitlement to payment in lieu of untaken holidays which had accrued while he was on sick leave and that in circumstances where his said entitlement was calculated by the Respondent on the basis of 20 days per annum (being his statutory entitlement) instead of 23 days per annum (being his contractual entitlement) he was entitled to the payment of 6.08 additional days’ pay pursuant to his contract of employment for the period from the 26th February 2020 until the 28th February 2022. He submitted that the failure to pay him his full contractual holiday entitlement amounted to an unlawful deduction and therefore the Respondent was in breach of the 1991 Act.

The Respondent submitted that the Complainant was paid the wages properly payable to him on the termination of his employment and denied that there was an unlawful deduction from the Complainant’s wages. The Human Resources Manager gave evidence that contractual annual leave entitlement did not accrue while an employee was on sick leave and that the Respondent paid to the Complainant all monies due and owing to him on the termination of his employment. The Human Resources Manager made reference to Complainant’s contract of employment and in particular the clause therein entitled “HR Policies & Procedures” which provided that the Complainant had an obligation to familiarise himself and act in accordance with the Respondent’s policies and procedures and that as the policies, new and/or current, were amended and released they would  become part of the Complainant’s terms and conditions of employment.

The Human Resources Manager referred the Respondent’s policy on “Absence from Work due to Illness or Injury” which formed part of the Complainant’s contract of employment and in particular section 10 thereof and stated that in circumstances where the Complainant was on sick leave from the 26th February 2020 until his employment ended on the 28th February 2022 the Complainant’s outstanding annual leave entitlement was calculated and was paid in line with the Organisation of Working Time Act 1997.

I have reviewed the Complainant’s contract of employment which sets out the Complainant’s holiday entitlement under the clause “Holidays” and while I am satisfied that his contract of employment states that the Complainant was entitled to 23 working days holidays, in circumstances where he  was on sick leave at the relevant time regard must be had to the clause on “Sickness Absences” in the contract which specifically referred the Complainant to the Respondent’s absence due to illness policy.

The Complainant gave evidence that while he was in receipt of his contract of employment, wherein he agreed to the terms and conditions of employment set out therein which incorporated the Respondent’s policies, he was not aware of the existence of the Respondent’s absence due to illness policy. Having regard to the “HR Policies & Procedures” clause in the contract of employment I am satisfied that the Respondent’s “Absence from Work due to Illness or Injury” policy, approved in May 2020 and effective from January 2021 was in effect at the relevant time and formed part of the Complainant’s contract of employment. In the circumstances I find that the Complainant was bound by the “Absence from Work due to Illness or Injury” policy.

I have read the Respondent’s policy entitled “Absence from Work due to Illness or Injury” and nowhere in the said policy does it state that contractual annual leave accrues while an employee is on sick leave. I find that the only reference to the accrual of annual leave while an employee is on sick leave is contained within section 10 of the said policy where reference is made to the accrual of statutory annual leave entitlement.

In response to a query raised by the Complainant regarding underpaid holiday pay, by email dated the 25th March 2022, the Respondent furnished the Complainant with a detailed calculation of his holiday and bank holiday entitlements. It is common case that the monies referred to therein were paid in full to the Complainant.

Taking account of the evidence of the Complainant and the witnesses on behalf of the Respondent and the oral submissions and documentation presented on behalf of the parties I find that only the Complainant’s statutory holiday entitlement accrued whilst he was on sick leave and that he did not accrue contractual holiday entitlement while on sick leave. Accordingly, I am satisfied that the Complainant was paid his holiday pay which accrued while he was on sick leave and that all wages properly payable on the termination of his employment were paid to him.

In all the circumstances I find that the wages claimed by the Complainant were not properly payable to him and that there has been no breach of section 5 of the 1991 Act.

For the reasons set out above, I decide that the complaint is not well-founded.