Complainant

Respondent

Parties

Ian Walsh

Iarnrod Eireann/Irish Rail

Representatives

Self-represented

Internal/Self-represented

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-00056919-001

30/05/2023

For the Complainant

-      Ian Walsh – self-represented

For the Respondent

-      John Brosnan, Industrial Relations Manager (Transport)

-      Laura Devy – Industrial Relations Manager (Shared Services)

The Complainant outlined that a new payroll system was introduced, and Week 18 and Week 19 were consolidated into one week’s pay, which he said had tax implications for him. He submitted that he had paid more tax than he would otherwise have paid.

He further said that he received no payslip for one of the two weeks, which had been consolidated into one; and he submitted that it was his understanding that a payslip had to be issued for each week.

The Respondent denies the Complainant’s claims. It submits that the payroll change occurred on foot of a collective agreement, involving union representation of the workers, and that they were all notified in advance of the change being introduced; that a payslip had been issued correctly to the Complainant for all monies received; that the Respondent has no jurisdiction with respect to taxes – that is a matter solely for Revenue.

The Complainant further submitted that there was an allowance in the amount of €82.36 outstanding under the old system, which he had not received which he should have received. At the hearing, it emerged that the allowance should have been received – this was acknowledged by the Respondent, which was surprised it had not been applied for and received - there appeared to have been a miscommunication as to how it was to be processed, at local level. The Respondent undertook to pay the outstanding €82.36. I note that on 10/5/2024, subsequent to the hearing, correspondence from the Complainant was received by the WRC confirming receipt of the monies by him on 3/5/2024.

The Complainant gave evidence on his own behalf, at the hearing.

He explained that the issue pertained to Week 18, 2023. He said that a new payroll system was introduced, and Week 18 and Week 19 were consolidated into one week’s pay. He said that had tax implications - that as a single person, he could earn €772, and after that, he had to pay the top rate of 40%. He said that the problem, was that it was reclassified as one week, but the payment went in as two separate amounts

He said that the relevant figure was €1,099.02, when the two figures were added together – this pertained to basic pay. He said that from 24th to the 30th, there was no payslip with that. He said that, for example, if he were applying for a personal loan, he cannot produce a payslip for that particular time frame.

He said that his understanding is that a payslip has to be issued for every working week, and he said that for the back week ‘instead of twelve (12) days, we were going to five (5) days.’

He said that no allowance was received, in respect of the extra week. He submitted that €82.36, a train radio allowance, locally known as an equipment allowance was still outstanding. He said that 7.5% was to be consolidated into basic pay, and backpay was duly paid in May, but that €82.36 was still outstanding, on the old arrangement. However, he stressed that his ‘biggest bugbear with this’ was ‘the two weeks’ wages put into one.’ He said that fifty-three (53) weeks were put into fifty-two (52). He said that he had ‘been down the road with the Revenue Commissioners about this’ and that Revenue said that ‘it had nothing to do with them’, that it was based on ‘what the company inputted.’

He outlined the figures as being: €2,280 gross, and the said that he had to pay 40% tax ‘on the whole lot from €772 upwards.’ He said, as a result, he ‘should have paid €460 but paid €662.’

He further outlined the contents of a balancing statement (P21) he had received pertaining to  medical expenses. He explained that the relevant figure was €39.10, but he was told that there had been an underpayment of 1 cent in USC. So, he received €39.09 back.

On cross examination

It was put to the Complainant that the change in the payroll was collectively agreed. It was put to him that an employer has to stand by Revenue’s rules, no matter what. He said that Revenue only sees the figure and taxes it accordingly.

It was submitted that the change pertained to a pay deal (which was collectively agreed), that the employees received pay increases, and there are five (5) unions, which are all still in it. It submitted that it was a payroll transformation.

It was submitted that all employees notified in advance.

The Adjudication Officer asked the Complainant whether he was notified in advance. He acknowledged that he was and said he had ‘no issue with that.’ He maintained that there was a payslip missing for one of the two weeks’ work.

The Respondent submitted that the mechanism of the payment had been informed through the trade unions.

It submitted that the Payment of Wages Act 1991 has been fully complied with, that the previous week was an arrears week.

The Complainant was asked whether he raised this with local management. He said that he had not. He said that he had raised it with the union, but the union said it was having nothing to do with it.

It was submitted that all allowances were effectively rationalised. However, the Complainant submitted the group of employees, including him, were told they were getting the missing €82.36 back – they were told that it was going to come in the June consolidation. He said: ‘Yeah, but that didn’t happen.’

As per the written submissions:-

It is submitted that the essence of this complaint is that the Complainant believes his wages were taxed incorrectly. The Respondent submits that the WRC has no jurisdiction under the Payment of Wages Act 1991 to adjudicate on the rate of tax applicable to employees’ wages. The Respondent is relying on Reign Healthcare V. Ngene PWD2322, in this regard.

Background

It is submitted that wages in Iarnrod Éireann are paid via five (5) separate payrolls (monthly clerical, CME, rail operatives and permanent way). The Complainant is paid via the Rail Operative payroll.

In March 2021, the WRC issued a recommendation on issues arising from its recent pay agreement. This recommendation stated that the parties i.e. company and Trade Union Group (TUG) should engage meaningfully on payroll reform which the organisation, this payroll reform included movement of staff from weekly to monthly pay, electronic payments and that those on weekly pay would now be on a Friday, following the implementation of a new payroll system.

In 2022, Iarnrod Éireann implemented a new payroll system (ResourceLink) as the software for the current/legacy payroll system had reached end of life. Four (4) of the five (5) payrolls have migrated to the new system, with the last payroll (Per Way) scheduled to transfer in 2024.

It is submitted that numerous meetings were held with the company and TUG to agree the timeline for the rollout of the new payroll system. These meetings were also attended by members of the payroll and project management team who collaborated with the TUG on a Frequently Asked Questions Document which was distributed directly to employees, via online channels and the Weekly Circular, prior to the payroll change over.

It is submitted that the new Rail Operative went live on 1st May 2023 with employees on this payroll (including the Complainant) receiving their first payment on Friday, 12th May 2023 for the working week 1st – 7th May.

The new payroll system shorted the time-frame for payment from 12 days to 5. To facilitate this change, employees on the Rail Operative Payroll were paid for two weeks on 4th May 2023, for Week 18 (17th - 23rd April) and Week 19 (24th - 30thApril). Both weeks were re-classified as Week 18 and payment is detailed in the corresponding payslip (Appendix 4).

A full-time employee receives tax credits for 52 weeks per calendar year, the employees moving to ResourceLink would now receive 53 weeks of wages, due to the shortened timeframe between ResourceLink and Legacy payroll. Therefore, the Complainant could not receive two weeks’ of tax credits for week 18 and the payment had to be put through as an allowance. This was communicated, in advance, with all employees and it is submitted that no other employee has raised any grievance in relation to same.

Payment of Allowance

It is submitted that the Complainant, along with his colleagues, is in receipt of a 7.5% machinery operating allowance. This allowance was the subject of a Labour Court Recommendation (Appendix 5) which resulted in the agreement to consolidate the allowance at a rate of 6.2%. Iarnrod Éireann operates by collective bargaining and all TUG members, including the Complainant, were balloted in 2022 and accepted the consolidation.

Law

The Respondent company is relying upon the wording of s. 5 of the Payment of Wages Act 1991: It is citing Tesco Ireland Ltd. V. Balans [2020] IEHC 55 and Radisson Blu Hotel V. Walasek PWD2111, in that regard.

It further citing Office of Public Works V. O’Sullivan PWD1640, in which the Labour Court considered the effect of collective agreements and deductions of wages.

Mr. John Brosnan, presented the Respondent’s case, at hearing.

He emphasised that this case pertained to an individual employee, operating within a collective bargaining environment.

He said that the collective agreement was part of an overarching pay deal. Part of that deal involved a payroll change – that affected other grades of staff as well as the Complainant’s grade. He submitted that whether the change had an impact on tax credits or not is not something within the purview of the Respondent, that Revenue has sole jurisdiction with respect to taxes, tax credits, balancing statements etc.

He submitted that people were paid correctly – they were paid for what they worked.

He submitted that the allowance was being dealt with locally, that it came in in 2004, and the Labour Court consolidated it on a cost neutral basis to the pension scheme. That allowance no longer exists for the 42 signallers.

He submitted that the following pay week which involved mass migration to the new system, any outstanding allowances – any additional ‘bits and pieces’ – were to be applied for, locally, using the CSV form (additional payments form). [The Complainant explained that that did not happen and maintained that €82.36 was still outstanding.]

It appears that local management in Cork did not send through the applicable form, in respect of it; as it may have thought it would be applied automatically, which it was not. The Respondent undertook to remedy the outstanding €82.36 in respect of this employee, and any others in the same position.

He concluded by emphasising that pay and information relating to pay was accurate; that there was a payslip for every single week of the year; and that both sides are operating in a collective bargaining environment.

I find that the changes to payroll were collectively agreed, notified in advance, and fully paid. I am therefore satisfied that the Payment of Wages Act 1991 has been complied with, in this regard. I find that this element of the complaint is not well founded.

I am satisfied that I have no jurisdiction in relation to the issue of pay slips. I am satisfied therefore that this element of the complaint is not well founded.

I find that the amount of €82.36 (pertaining to the outstanding allowance) which was not paid and which it was acknowledged at the hearing should have been paid, in the week following the migration onto the new system is outstanding. I find that this element of the complaint is well founded.

I find that the amount of €82.36 (pertaining to the outstanding allowance) which was not paid is due and owing. I find that this element of the complaint – and only this element of the complaint - is well founded. I direct the Respondent to pay the Complainant the €82.36 outstanding.

I note the post-hearing correspondence from the Complainant, dated 10/5/2024, confirming receipt of the €82.36 owed.

Payment of Wages; Collective Agreement; Migration to a new Payroll System; Taxes;