Complainant

Respondent

Parties

Brian  Dumigan

Jadehall Limited (In Receivership) t/a Murray's Super-Valu

Representatives

Noel Murphy Cork Operative Butchers/ Independent Workers Union

Ms Cara Jane Walsh BL instructed by  McCann Fitzgerald

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-00052735-001

09/09/2022

Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994

CA-00052735-002

09/09/2022

The Complainant commenced Employment originally as a retail assistant in the Respondent store. He subsequently took up the position of butcher, for which he is qualified and has over 40 years’ experience. The Complainant asserts that in 2015 he was promoted to a managerial position of Head Butcher. In 2021 the company went into receivership and KPMG took on the role of receiver with responsibility for management of the store.

The Complainant submits that there was a 10% increase properly payable to him as a designated trade union rate which the Respondent neglected to pay and that this should be considered an unlawful deduction under the Payment of Wages Act 1991. (hereinafter “the 1991 Act”). For the cognizable period of the claim the Complainant, the Complainant submits he has lost €65.39 for 24 weeks, amounting to €1,569.36.

The Complainant further submits that the Respondent is in breach of the Terms of Employment (Information) Act 1994 in that the Respondent altered his terms and conditions by not abiding by a negotiation agreement established by custom and practice. 

The Respondent refutes that the Complainant is entitled to the pay rise as set out and further that the Respondent had not breached any terms of the Complainant’s employment.

CA-00052735-001 Payment of Wages Complaint.

The Complainant gave evidence under affirmation. He said that he was not paid the full union rate for head butcher as the previous owner told him the accountant would not allow it, but he had an agreement with the owner that his wages would increase to €35k over a twelve-month period in 2015, when he was promoted to head butcher. He said that the previous owner said he would honour any union rate that was submitted to him. The Complainant is a member of the Cork Operative Butchers Society/Independent Workers Union. He stated that the company owning the store went into receivership in 2021, under the supervision of KPMG. He said that his union wrote twice asking for a 10% increase in his salary, as was the union rate, but that the Respondent failed to pay the increase that was due.

In cross examination, the Complainant accepted that the arrangement he claimed to have existed was not committed to writing. He further acknowledged, when faced with documentation on accounts from the Respondent’s counsel, that he did receive increases in wages e.g., €3k in 2018 by private arrangement with the owner, with no union involvement. He accepted also that this was at a time when there was an agreed pay freeze period between his union and the Cork Master Butchers Association.

Complainants Legal Argument - CA-00052735-001 Payment of Wages Complaint.

From 1st March 2022, wages for the Butchering Trade in Cork were increased by 10% (having been frozen for five years. All employers in the region received the circular on these increases, including the Respondent. This Respondent did not apply the pay rise. Furthermore, the Respondent did not seek a discussion with the Complainant's trade union, for the purpose of claiming inability to pay.

The company departed from the established pay adjustment mechanism and by failing to apply the pay rise, in effect made an unlawful deduction from the Complainant’s wages.

CA-00052735-002 Terms of Employment Complaint.

The Complainant submits that his terms of employment state that the rate of pay can be negotiated from time to time between the employee and the employer. The Complainant asserts that the Respondent is refusing to negotiate with him or his representative on rates of pay and that this is a breach of the Act.  

Mr Shane McCarthy of KPMG gave evidence under affirmation. He described how his team took over the running of the Respondent company as a result of an order of receivership, authorised by a secured lender. This operation ensured the running and ultimate survival of the store. He looked at the records in the Human Resources File, which showed no evidence of any engagement with the Complainant’s union. He confirmed that the company was not a member of the Cork Master Butchers Association (CMBA). He gave evidence that he did not receive the correspondence seeking a pay rise from the Complainant’s union nor did he ever reply to such correspondence.

The Respondent’s Legal Argument - CA-00052735-001 Payment of Wages Complaint.

The Respondent submits that it is not bound to follow a collective agreement in respect of pay when same is not a feature of the contractual relationship between the parties, either by being an express or implied term of the contract, and further where the Respondent had not been a member of the Employer’s union during the time of the Receivership (15 January 2021- 1 August 2023).

The Respondent submits that the Complainant’s contract of employment provides under Clause 2:-

You will be paid weekly, the rates being those negotiated from time to time between Brian Dumigan (Employee) and Jadehall Limited T/A Supervalu (Employer).

Therefore, the Respondent submits, there is no onus on the Employer to engage with the Complainant’s trade union. The Respondent refutes that there is any custom or practice in respect of engaging with the Independent Workers Union (IWU) in respect of the Complainant’s pay.

 The Respondent does not accept that the Complainant has always been a beneficiary of pay improvement negotiated by his trade union throughout his working life per his written submission. The Respondent points to the 2018 pay increase as a direct contradiction to this contention. The Union states ‘The butchering/meat trade in Cork, having had a pay freeze between 2017 and 2022…….’ The Respondent submits that the 2018 salary increase, therefore, points to the fact that the Complainant benefitted from a salary increase agreed at a local leveldirectly with his employer, rather than such pay increase being on foot of a pay improvement negotiated by his trade union on his behalf. The Respondent therefore refutes that it departed from the established pay adjustment mechanism which amounted to an unlawful deduction.

 The Respondent has not been a member of the Cork Master Butchers Association (Employers Union) throughout the time of the Receivership since 15 January 2021 and as such is not obliged to engage with the IWU and is not obliged to implement the pay increases dictated by this body.

The Respondent opened section 5 of the 1991 Act where it states that there can only be an unlawful deduction when wages are not “properly payable”. The Respondent submits that the purported pay rise which the Complainant claims in this case, has never actually been properly payable to him.

The Respondent submits that, without prejudice to the foregoing, the Complainant’s claim is misguided in any event as the Complainant is paid in excess of the Butchers Basic Rate of €649.69 per the IWU Circular, as exhibited. The Respondent points to the fact that the circular states that Superior rates to the above to be maintained – and so the Complainant is not entitled to a pay increase of 10% over his current rate, rather his superior rate should be maintained by virtue of this circular.

CA-00052735-002 Terms of Employment Complaint.

The specifics of this complaint are set out in the Complaint Form as follows:

‘My Terms of Employment say that the Rate of Pay can be negotiated from time to time between the employee and the Employer. The Employer is refusing to negotiate with me or my representative on rates of pay. This is a breech (sic) of my Terms of Employment of which I have never been notified.’

 The Respondent refers to the Complainant’s written submission dated 25 July 2023, where it  states:

‘The claimant was accepted as head butcher and manager of the meat counter by Proprietor Ken Murray in 2015. There was no written Terms of Employment in this appointment. However, a salary structure was agreed. It was also agreed that any wage improvements would reflect the terms agreed with the Butcher Trade Unions – the Cork Operative Butchers Society (Workers Union) and the Cork Master Butchers Association (Employers Union). From the 1st of March 2022, a pay increase of 10% was agreed between the Union and the Employer Association. Failure by the employer to implement this pay rise, without invoking the inability to pay clause, is a breach of Mr Dumigan’s implied terms of employment. The claimant is of the view that failure to apply the pay rise is tantamount to a deduction in his wages and therefore a breech (sic) of the act, for which he is asking the adjudicator to award compensation. ‘

The Respondent submits that the Complainant’s contract of employment provides under Clause 2:

You will be paid weekly, the rates being those negotiated from time to time between Brian Dumigan (Employee) and Jadehall Limited T/A Supervalu (Employer).

The Respondent refutes that there was an implied clause inserted into the Complainant’s contract that he would be entitled to any wage improvements reflective of the terms agreed with the trade union. The Respondent points to the 2018 salary increase as a direct contradiction to this alleged implied term/condition of the Complainant’s employment.

The Respondent respectfully submits that the Complainant’s claim under this heading is confused and misguided. Section 7 of the 1994 Act  provides that there must be a contravention of section 3,4,5, or 6 of the Act in order for a complaint to be presented to the WRC. The Complainant has not produced evidence of any such contravention.

CA-00052735-001 Payment of Wages Complaint.

Section 1 of the Payment of Wages Act, 1991 (hereafter “the 1991 Act”) defines

“wages” as:

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,

Section 5(6) of the Act states:

(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  High Court in the case of Marek Balan’s v Tesco Ltd [2020] 31 E.L.R. 125  stated that the first issue for the Court to consider is ‘what was properly payable’ to the Complainant. The court went on to state :

The Complainant accepts that his contract is as an LTF worker and that he received the rate of pay for that category of staff. Other than data extracts referring to him as a permanent worker(which by nature of his contract of indefinite duration he is), the Complainant did not produce any documents such as a contract or a collective agreement to show he belonged in the red circled category of staff and therefore entitled to the higher rate of pay. The Court therefore determines that the Complainant during the relevant period was paid what was properly payable to him.

In this case the Complainant accepts that he has no documentation to show that his employer agreed to have his wages set by collective agreement or otherwise. Subsequent solicited documentation received after the hearing deals with a bonus scheme which the Respondent at the time accepted was custom and practice. This had been paid to Mr Dumigan. The issue I have to consider here is whether the wages and the bonus scheme were as a result of an implied term in his contract set down by an agreed Collective Agreement.

There is an initial burden in these cases imposed on a complainant to show that wages that were, in essence, deducted were properly payable in the first place. The Respondent produced documentary evidence to show that the Complainant was in receipt of bonuses and pay rises, at a time when there was an agreed pay freeze between employers and the union.  This strongly suggests to me that, in essence, the Complainant had his own separate arrangement in play with the Respondent, regardless of the Collective Agreement. Such an arrangement, implied by conduct, suggests that the Collective Agreement could be dispensed with at times and therefore was not the determining factor in setting wages that were properly payable for the purposes of this case. Furthermore, the Complainant could not produce any documentation to suggest otherwise, as was deemed significant by the High Court in Marek Balan.  I am satisfied after taking all the circumstances into account that the 10% increase in wages within the cognisable period of six months prior to the lodgement of the complaint, was not properly payable under the 1991 Act. I find that the complaint was not well founded.

CA-00052735-002 Terms of Employment Complaint.

The Complainant did not contend the original receipt of his terms of employment from the Respondent in accordance with the 1994 Act, but instead argued that there was a breach of those terms by the Respondent in not negotiating his pay with himself or his trade union. The 1994 Act does not set require that employees be provided with a contract of employment. In this instance the terms were provided in the form of a contract however the alleged breach of that contract is not an actionable complaint under the 1994 therefore I deem the complaint not to be well founded.

CA-00052735-001 Payment of Wages Complaint.

For the reasons outlined above, I find that the complaint was not well founded

CA-00052735-002 Terms of Employment Complaint.

For the reasons outlined above, I find that the complaint was not well founded.

Payment of Wages Act 1991, Terms of Employment (Information) Act 1994