ADJUDICATION OFFICER DECISION

Adjudication Reference:  ADJ-00047613

Parties:

Complaint:

Date of Adjudication Hearing:  18/07/2024

Workplace Relations Commission Adjudication Officer:  Aideen Collard

Procedure:

This complaint pursuant to Section 6 of the Payment of Wages Act 1991 was referred under Section 41 of the Workplace Relations Act 2015 to the Workplace Relations Commission (hereinafter ‘WRC’) on 2nd September 2023.  Following delegation to me by the Director General, I inquired into this complaint and gave the Parties an opportunity to be heard and to present any relevant evidence.  This complaint was heard by remote hearing over a number of dates completing on 18th July 2024.  The Complainant was self-represented and assisted by a Polish Interpreter.  Mr Jack Niedzwieki, Owner/Director appeared on behalf of the Respondent.  On two occasions, Mr Niedzwieki failed to attend and following the first occasion was accommodated with a further hearing.  The Complainant submitted comprehensive supporting documentation.  The hearing was held in public and the Parties were made aware that their names would be published within this decision.  The Complainant’s evidence was given under oath and her claim for €3,420 in unpaid wages was conceded by Mr Niedzwieki.  He was afforded until 31st May 2024 to discharge this sum to the Complainant but in circumstances where he has failed to do so, it is necessary to issue a decision.  I have fully considered all of the evidence and documentation submitted herein within this decision.

Background:

The Complainant claimed that she was owed €3,520 in wages in relation to her former employment with the Respondent.  The Respondent conceded that this amount remained due and owing.

Summary of the Complainant’s Case:

The Complainant resided in Poland when she saw a cleaning job in Ireland advertised online by the Respondent.  Coincidentally, the Owner/Director, Mr Jack Niedzwieki came from the same village.  He ran the cleaning business with his wife and they would take it in turns to travel back and forth to Poland.  He interviewed the Complainant in person in Poland and promised her and her mother employment in Ireland.  It was agreed that they would stay at his one-bed apartment whilst he helped them find accommodation.  This was also the Respondent’s registered address.  The Complainant arrived in Ireland on 22nd January 2023 and commenced employment with the Respondent the following day.  This entailed cleaning houses and offices.  She signed a written contract in English which Mr Niedzwieki took back for further completion and was never furnished with a copy.  She worked on average 40 hours per week excluding travel time between jobs and breaks.  She earned €12 gross per hour for the time spent cleaning so excluding travel time. 

There was no written agreement as to what, if any deductions would be made for accommodation.  The Complainant slept on the sofa whilst Mr Niedzwieki and/or his wife would stay in the bedroom.  Her mother joined her shortly afterwards and shared the sofa with her.  Initially, Mr Niedzwieki told her that the first two weeks rent was free.  He then sought €800 per month in rent (apparently comprising of 50% of the Respondent’s rent) for her and her mother inclusive of the first two weeks.  He also kept adding charges for bills including electricity for the washing machine used to wash linen for the Respondent’s clients.  The Complainant said that she had no difficulty contributing towards her accommodation and bills but none of this had been discussed or agreed beforehand.  She was also taxed at the higher rate of tax for the whole of her employment as she did not have a PPSN initially.  The Complainant received her net wages for the remainder of January 2023.  On 21st February 2023, she made a payment of €450 to the Respondent towards rent.  She received a payslip for February 2023 but her wages were withheld.  She was paid her net wages for March 2023.  The Complainant was unhappy with her working conditions including 5am starts, long unpaid journeys between jobs, no breaks and the withholding of her wages.  Her mother was being treated likewise.  She repeatedly requested her outstanding wages but to no avail.  In response, Mr Niedzwieki had threatened her with the authorities.  Following a heated exchange over their pay and conditions with his wife on 14th April 2023, his wife threw the Complainant and her mother out of the apartment in the middle of the night.  They had no money and after spending the night walking around the City, received assistance from a Charity for migrants to pay for flights back to Poland. 

After the Complainant’s return to Poland, there ensued an email exchange wherein Mr Niedzwieki informed her that the charges were even higher and he had retained her tax refund from the Revenue Commissioners to discharge same.  This refund was made on foot of a final payslip dated 30th April 2023 from the Respondent purporting to have paid €2,932.86 to the Complainant.  The Complainant provided vouching documentation including the payslips in question, correspondence with the Revenue Commissioners confirming that the tax refund had been made to the Respondent on her behalf and bank account statements confirming all of the payments and deductions subject to this complaint.  Allowing for statutory deductions, payment of net wages for January and March and a small payment received from the Respondent in June 2023, circa €3,520 in total was retained comprising of €3,100 in unpaid wages and €420 in lieu of accrued annual leave.  The Complainant did not pursue complaints in respect of her working conditions and as the hearing,  would have been satisfied with receipt of her outstanding wages from the Respondent had that been forthcoming.

Summary of Respondent’s Case:

Mr Jack Niedzwieki, Owner/Director appeared on behalf of the Respondent.  He confirmed the Complainant’s employment’s details as set out above.  Initially, he contended that he was within his rights to withhold payment of the Complainant’s wages including a tax refund received from the Revenue Commissioners as set-off for providing the Complainant with accommodation in his rental apartment and household bills.  He also informed this Adjudication Officer that he intended to report the Complainant to An Garda Síochána for the non-payment of rent.  He was unaware of the requisite statutory provisions.  Subsequently, he confirmed that there was no agreement to the deduction of rent in writing and conceded that there was no lawful basis for this position.  He did not dispute that the sum of €3,520 in unpaid wages remained due and owing to the Complainant.  He sought until 31st May 2024 to discharge same citing various personal difficulties.  However, he failed to make payment or appear on the final hearing date of 18th July 2024, fixed for the purposes of confirming that the monies had been paid to the Complainant and the matter had been resolved.

Findings and Conclusions:

It is necessary to examine the facts giving rise to this complaint in light of the relevant statutory provisions.  Section 1(1) of the Payment of Wages Act 1991 defines ‘wages’ in relation to an employee as “…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:”  Comprising of withheld wages, a withheld tax refund and non-payment in lieu of accrued annual leave, there is no issue in the instant case that the sum of €3,520 sought herein constitutes ‘wages’ under the Act.

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 (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.”  The remainder of Section 5 provides for other circumstances in which an employer can make a lawful deduction from an employee’s wages which are not applicable to the instant case.  Section 6 provides for the referral of complaints to the WRC and the available redress.

As stipulated in Marek Balans -v- Tesco Ireland Limited [2020] IEHC 55 approving Dunnes Stores (Cornels court) Limited -v- Lacey [2007] 1 1R 478, a decision-maker must firstly determine what wages are properly payable under the employment contract before determining whether there has been a deduction under Section 5 of the Payment of Wages Act 1991.  In the instant case, there is no dispute that contractually, the Complainant was entitled to the sum of €3,520 claimed herein, comprising of wages, a tax refund from the Revenue Commissions and pay in lieu of annual leave.

The next question to be considered is whether the Respondent was lawfully entitled to withhold the payment of these monies under Section 5 of the Payment of Wages Act 1991.  Section 5(1)(c) of the Payment of Wages Act 1991 expressly requires the employee’s prior written consent to a deduction from wages unless authorised by statute or pre-exiting term in the contract of employment.  Any deduction for board and/or lodgings has to be factored into an employee’s hourly rate of pay as required by Section 19(5) of the Minimum Wage Act 2000, in accordance with the applicable Order setting out the rates.  At the material time, Order - S.I. 500/2022 – National Minimum Wage Order 2022 provided for a maximum weekly deduction of €26.70 per week for lodgings.  Section 3(1) of the Terms of Employment (Information) Act 1994 requires an employer to provide an employee with a written statement not later than two months after the commencement of employment, containing particulars of the terms of employment including “(g)the rate or method of calculation of the employee’s remuneration and the pay reference period for the purposes of the National Minimum Wage Act, 2000”.  In circumstances where no such written statement including the rate or method of the calculation of her remuneration was provided to the Complainant, I find the withholding of her wages for rent and non-payment in lieu of annual leave to constitute a breach of Section 5 of the Payment of Wages Act 1991.  I am further satisfied these monies were payable within the six-month period prior to referral of this complaint and the Respondent has not discharged the monies to date.

Decision:

Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to this complaint in accordance with the relevant redress provisions under Schedule 6 of that Act if successful.  I find this complaint to be well-founded for the reasons set out aforesaid.  Once a complaint has been declared well-founded in whole or in part, Section 6(1) of the Payment of Wages Act 1991 provides that an Adjudication Officer shall direct an employer to pay an employee compensation of such amount (if any) as considered reasonable in the circumstances not exceeding:

(a) the net amount of the wages, or tip or gratuity as the case may be (after the making of any lawful deduction therefrom) that- (i) in case the complaint related to a deduction, would have been paid to the employee in respect of the week immediately preceding the date of the deduction if the deduction had not been made, or (ii) in case the complaint related to a payment, were paid to the employee in respect of the week immediately preceding the date of payment,or(b) if the amount of the deduction or payment is greater than the amount referred to in paragraph (a), twice the former amount.”

In assessing the amount of compensation to be awarded, I consider there to be a number of aggravating factors present including the Respondent’s failure to provide the Complainant with a written statement of the terms of her employment specifying any deductions for accommodation from her remuneration, the presentation of information to the Revenue Commissioners confirming the payment of wages which had not been discharged and the withholding of a tax refund made on foot of same.  The Complainant was in a particularly vulnerable position having travelled from Poland to Ireland for work without independent accommodation or supports.  I find it particularly reprehensible that having recruited the Complainant in Poland and invited her to reside at his home in Ireland, Mr Niedzwieki exploited that situation to withhold her wages already reduced by the higher tax rate, thereby depriving her of the means to live and/or leave her situation and travel back to Poland.  He then relied upon the fact that she had returned to Poland to withhold a tax refund and used the threat of reporting her to authorities to deter a complaint.  Given that up to twice the net amount of wages due where the amount is greater than a week’s net wages may be awarded, I consider it reasonable in the circumstances to direct that the Respondent pays the maximum sum of €7,040 [comprising of €3,520 in unpaid wages and €3,520 in compensation] within 42 days herewith. 

Dated:   12th August 2024

Workplace Relations Commission Adjudication Officer:  Aideen Collard

Key Words:  Non-payment of wages under Section 5 of the Payment of Wages Act 1991 – compensation for withholding wages as is reasonable in the circumstances – aggravating factors