ADJUDICATION OFFICER DECISION

Adjudication Reference:  ADJ-00049778

Parties:

Complaints:

Date of Adjudication Hearing:  30/04/2024 and 13/05/2024

Workplace Relations Commission Adjudication Officer:  Gaye Cunningham

Procedure:

In accordance with Section 41 of the Workplace Relations Act, 2015following the referral of the complaints to me by the Director General, I inquired into the complaints and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaints.

Background:

The complaints relate to the non-payment for time off in lieu and accrued annual leave.

Summary of Complainant’s Case:

The Complainant made verbal and written submissions summarised as follows:

He stated that his complaint refers to the carrying forward of his annual leave and time in lieu for the period July 2019 to December 2022 (and indirectly for a no. of staff reporting to him).

In relation to the time limits imposed by the Workplace Relations Act 2015, the Complainant submitted the following:

An investigation was carried out by an external company in August/September 2022, into the carry forward of annual leave and time in lieu by members of the Finance Department. In the following 12 months, a no. of meetings and discussions took place to resolve the grievance/dispute. On the 14th September 2023, I received an email from the company informing me that as all internal avenues had been exhausted, the organisation now regarded the matter as closed. It was from this date, the 14th September 2023, that I looked outside the company and I believe that I am within the 12 months timeline to submit a complaint to the WRC.

The Complainant made the following written submission, supported and supplemented by oral evidence given at the hearings:

I have been employed as Financial Controller with Respond since March 2001 At the time this decision was taken by the company in July 2022, there were 14 staff employed in the Finance Department and I had 8 staff reporting to me. I am in effect the “Operations Manager” with responsibility for Payroll, Revenue Returns, Accounts Receivable and Payable (which includes employees’ travel expenses) and co-responsibility for the Management and Statutory Accounts. The carrying forward of leave has been a feature of our working life over many years, which has been facilitated by the company and has resulted in getting the job done and meeting our many company deadlines. The Head of Finance approved this carry forward leave annually. The need to work extra hours is due to an increased project workload coupled with an under resourcing issue within the Finance Department, which had been compounded by staff leaving and then delays in recruiting replacements. The work does not go away, and it has being increasing steadily year on year In addition, COVID happened in 2020 and this created a spike in work due to wage subsidy schemes, related Revenue reconciliations and audits, POBAL audits and returns, remote working (establishing a different way of working with associated new challenges) The work ethic of the more senior team members meant they worked additional hours to complete all work by the respective deadlines but with the expectation and knowledge that their unused leave would be carried forward.

To repeat, the Head of Finance approved this leave annually, and has been doing so for the last 10 years. No employee was asked to work the extra time….they could see what had to be done and just got on with it.

There are a number of inconsistencies in the company regarding staff, and this gives our situation more context:-

1. Some staff being paid while out of work whereas others are removed from payroll after the allowable 15 sick days
2. Not all staff completing their weekly clock cards on the HR System TMS (recording the hours worked during the previous week and then authorised by their Manager). I have spoken to many of my colleagues in other departments and they are not completing their clock cards, nor are they approving clock cards for staff reporting to them
3. Annual Leave taken but not recorded on the HR System
4. Some staff allowed carry forward leave but others, as in this case, are not.

It is important to detail the timelines around this issue

o Historically, each employee kept their own record of hours worked. There are sign-in sheets in many offices to record starting and finishing times for those who which to avail of them (primarily for Health and Safety purposes). Employees went to an office to work, they were visible, present, so you knew who was in and who was out

o Annual Leave was approved locally by respective managers and these approved annual leave requests were forward to HR for their records 

o Similarly, carry forward annual leave was approved and forwarded to HR for their records

o In July 2020, a new online HR System was launched, which required all staff to record their daily start and finish times as well as their break times. This was to ensure compliance with the Working Time Directive. These times were then authorised by respective managers on a daily/weekly basis.

Booking annual leave, recording time in lieu, taking your time off in lieu were all features of the new system and gave HR complete oversight of every employee.

In January 2021, a request for carry forward annual leave and time in lieu was sent to HR for carry forward on TMS (Note that this information was also requested by HR on the 7th January 2021)

The Annual Leave was carried forward, the time in lieu was not. This was discussed but not robustly followed up at the time with HR, it was assumed it would be addressed in due course.

In January 2022, a similar request was sent to HR but it was not actioned by HR. To clarify, no action on both the carried forward annual leave and the time in lieu….this was a first. I was informed by HR that the Head of HR had put the matter on hold.

This then led to numerous emails been sent to the Head of HR for updates, all to no avail, and then getting the Head of Finance involved to have the matter actioned o At this stage, there was no emailed feedback received, but the Head of Finance was assured by the Head of HR that all was ok and would be sorted in a matter of days.

Sadly, the Head of HR passed away during this process on the 25th May 2022 RIP

On the 21st June 2022, the matter was forwarded to the HR Manager to deal with, who then forwarded it on to the CEO for approval

o The CEO sought a full explanation from the Head of Finance (see Appendix 9, pages 23 to 32). o In Aug 22, I sought an update from the Head of Finance as the Finance Department as a whole were not fully informed of this matter, or what was going on in the background initiated by the CEO, and its potential impact on them.

o In Aug 22, the CEO commissioned an external investigation into the matter which was completed in Sept/October 2022

o In Dec 22, I requested a copy of the report, as the Head of Finance was instructed not to discuss any specifics or the recommendations of the report.   

o In Jan 23, this request was denied   

o In Feb 23, I submitted a Subject Access Request to receive a copy of the report. In Mar 23, I received a 58 page report which was almost fully redacted apart from a no. of Company Policies in the Appendices

o In Feb 23, the CEO requested a reasonable proposal to bridge the gap with the Head of Finance acting as an Intermediary.

In March 23, further information requested from the CEO….no information forthcoming 

o In May 23, proposal issued to the Head of Finance  

o In Aug 23, a full and final offer made by the company with a timeline of acceptance of one week  

o In Sept 23, the offer was declined and the company confirmed the matter was now closed.

Much of what has happened has revolved around the decision to hold an external investigation into the carry forward of annual leave and time in lieu. Detailed answers were provided to the CEO from the outset and any other information to answer any questions were also available within the company, be it from Finance, HR, other Heads of Departments, etc…. Where was the merit, or what additional information could be obtained, that wasn’t already available to the company, by holding an external investigation? The company was aware of this situation for years, why was there a change of tack all of a sudden?  Was the company/HR Department “not complicit” in this matter over the years?

HR have been carrying forward annual leave in excess of company policy for years

• What oversight or reporting was/is carried out by HR on the hours worked for all employees?
• At no point during this period did HR say STOP…..you are working too many hours or you must take your minimum annual leave entitlement or there is a resource issue we have to discuss and resolve
• Why did the Head of HR not address this issue in January 2021 in the first instance, and again in February 2022, to be then followed by months of unanswered emails from me but at the same time, informing the Head of Finance that there was no issue and the matter would be resolved in days?
• Surely the word of the Head of HR is sufficient?
• Is it because another employee had 90+ days carried forward into 2022 and the Head of HR was fully aware and involved in this?

In his second written submission, the Complainant addressed the report commissioned by the Respondent into the matter of carrying forward of annual leave and time off in lieu.  The Respondent’s solicitor responded and the correspondence was completed in July 2024.

Summary of Respondent’s Case:

The Claimant has submitted claims under the Payment of Wages Act 1991 and the Organisation of Working Time Act 1997. For the reasons set out below each of the Claimant's claims are clearly time barred.

Organisation of Working Time Act

Section 41 (6) of the Workplace Relations Act 2015 sets out the time limits for claims under that Act. It states that, "Subject to subsection (8), an adjudication officer shall not entertain a complaint referred to him or her under this section if it has been presented to the Director General after the expiration of the period of 6 months beginning on the date of the contravention to which the complaint relates." Subsection (8) states that: "An adjudication officer may entertain a complaint or dispute to which this section applies presented or referred to the Director General after the expiration of the period referred to in subsection (6) or (7) (but not later than 6 months after such expiration), as the case may be, if he or she is satisfied that the failure to present the complaint or refer the dispute within that period was due to reasonable cause."

In terms of fixing the date of a contravention for the purpose of claims under the Organisation of Working Time Act, the Labour Court in Singh & Singh Ltd and Guatam [DWT0544] held, relying on the decision of Lavan J in Royal Liver v. Macken [2002] 4 IR 428 as follows:

“From this judgment it is clear that where an employer fails to provide an employee with the requisite amount of paid annual leave the contravention of the Act occurs at the end of the leave year to which the leave relates.” (emphasis added).

Consequently the contravention, if any occurred at the end of each of the statutory leave years, (i.e. 31st March). The Claimant has not specified the leave years to which his complaint relates, but based on established precedent it is submitted that any contravention relating to the 2023 leave year, or prior leave years, is clearly time barred. 

The Organisation of Working Time Act 1997 only applies to statutory leave, however this claim relates to contractual leave which is not covered by the Act.   Nevertheless, the Respondent has provided a response to the claim. Respond's annual leave year runs from 1 January to 31 December (or the end of the Christmas period). For convenience a table of the Claimant's statutory entitlement, contractual entitlement and leave actually taken by the Claimant in each of the calendar years 2019 to 2023 was provided.  This table shows that the Complainant was provided with annual leave in excess of the statutory entitlements with the exception of 2020. 

Payment Of Wages Act

Again, the time limit for a claim under the Payment of Wages Act is set out in Section 41 (6) of the Workplace Relations Act 1997. In HSE v Mc Dermott [2014] IEHC 331 the High Court considered in detail the wording of the time limits in payment of wages case and at paragraphs 14 and 15 stated: “…the key question is the “date of the contravention to which the complaint relates.” In other words, time runs for the purposes of the Act not from the date of any particular contravention or even the date of the first contravention, but rather from the date of the contravention “to which the complaint relates.” As the EAT pointed out in its ruling on the matter, had the Oireachtas intended that time was to run from the date of the first contravention, it could easily have so provided. For the purposes of this limitation period, everything turns, accordingly, on the manner in which the complaint is framed by the employee. If, for example, the employer has been unlawfully making deductions for a three-year period, then provided that the complaint which has been presented relates to a period of six months beginning “on the date of the contravention to which the complaint relates”, the complaint will nonetheless be in time.”

In its judgment the High Court provided an example of the difference that the framing of a complaint can make to whether the claim is outside of the time limit or not.

“It follows, therefore, that if an employer has been making deduction X from the monthly salary of the employee since January 2010, a complaint which relates to deductions made from January, 2014 onwards and which is presented to the Rights Commissioner in June, 2014 will still be in time for the purposes of s. 6(4). If, on the other hand, the complaint were to have been framed in a different manner, such that it related to the period from January, 2010 onwards, it would then have been out of time.”

This particular claim relates to a "time in lieu" policy which the Claimant believes applied to him and he claims to have accrued large amounts of historic time in lieu. The Claimant has not provided any details of the time worked but it would appear that at least some of the time in lieu was worked prior to 2020. It is denied that he was entitled to accrue time in lieu in this manner and this is addressed later in this submission, however as the claim relates to a period prior to 2020 then it is clear that the complaint has been presented "after the expiration of the period of 6 months beginning on the date of the contravention to which the complaint relates". Therefore the claim is clearly time-barred.

Further in Paragraph 2.0 of his Submission the Claimant notes that "In January 2021, a request for carry forward annual leave and time in lieu was sent to HR for carry forward on TMS…The Annual Leave was carried forward, the time in lieu was not."  And "In January 2022, a similar request was sent to HR but it was not actioned by HR. To clarify, no action on both the carried forward annual leave and the time in lieu… this was a first"

It is clear from the Claimant's claim form and submission that if there was a contravention, it occurred when the annual leave and time in lieu was not carried forward in 2022.

In summary, both claims are clearly time barred and in relation to the substantive issue the Company has two policies in place relating to annual leave and TOIL which the Claimant has disregarded and is now seeking a payment of approximately €60,000 in lieu of leave and time in lieu. In the Company's view the Claimant is not entitled to the leave claimed as he accumulated annual leave and TOIL in a manner which breached the relevant policies.  However, in an attempt to act reasonably the Company engaged a third party to review the matter. The third party made recommendations, which were rejected, as were all subsequent offers. 

For the reasons outlined above we respectfully request that the adjudicator finds in favour of Respond on the preliminary issue or alternatively, the substantive claims.

Findings and Conclusions:

I note the history in this case and the dispute the Complainant has with the Respondent in respect of time off in lieu and annual leave accrued.  In this decision, I am bound to address the complaints within the provisions of the Workplace Relations Act 2015, the Payment of Wages Act 1991, (for CA-00059484-001) and the Organisation of Working Time Act 1997, (for CA-00059484-002).

Time Limits

The complaints were received on 14 January 2024.  

The Complainant in subsequent submissions, correspondence and at the hearing argued that the time limit runs from 14 September 2023, when he was informed by the Respondent that an offer of settlement which had been rejected by the Complainant, was now withdrawn.

Section 41 (6) of the Workplace Relations Act 2015 provides:

“Subject to subsection (8), an adjudication officer shall not entertain a complaint referred to him or her under this section if it has been presented to the Director General after the expiration of the period of 6 months beginning on the date of the contravention to which the complaint relates.

Section 41 (8) provides:

“an adjudication officer may entertain a complaint or dispute to which this section applies presented or referred to the Director General after the period referred to in subsection (6) or (7) (but not later than 6 months after such expiration), as the case may be, if he or she is satisfied that the failure to present the complaint or refer the dispute within that period was due to reasonable cause”.

The provisions of Section 41 of the Act specifically allow for a maximum of 12 months to entertain a complaint.  This would mean that any complaint which relates to a period before 14 January 2023 cannot be entertained.  In this instant case, the clear narrative of the complaint refers to the period 2019 to 2022.   I do not accept the Complainant’s argument that time runs from 14 September 2023. At that point the Respondent withdrew an offer made to settle the matter.  However, the Complainant was well aware from at least February 2022 of the Respondent’s position on the matter.  In this instant case, the Respondent’s policy sets out the conditions for awarding TOIL to a limited category of employees and the Complainant was aware from February 2022 of the policies and the fact that time in lieu and carry over of annual leave was not to be recorded on the system.  I find that the cognisable period for the complaints is from 15 July 2023.   For the reason cited, that the Complainant was aware from February 2022 of the position,  I do not agree to extend the time.

CA-00059484-001            Payment of Wages Act 1991

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

CA-00059484-002            Organisation of Working Time Act 1997

The Complainant seeks payment of €18,127.29 for annual leave carried over from 2019 to 2022.

Section 19 (1) of the 1997 Act provides that  

… an employee shall be entitled to paid annual leave (in this Act referred to as “annual leave”) equal to—

( a) 4 working weeks in a leave year in which he or she works at least 1,365 hours (unless it is a leave year in which he or she changes employment)”.

The only circumstances in which the Act provides for payment for accrued annual leave not taken is contained in Section 23 (1) as follows:

• 23 (1) Where -
• (i) An employee ceases to be employed, and
• (ii) The whole or any portion of the annual leave in respect of the relevant period remains to be granted to the employee,

The employee shall, as compensation for the loss of that annual leave, be paid by his or her employer an amount equal to the pay, calculated at the normal weekly rate or, as the case may be, at a rate proportionate to the normal weekly rate, that he or she would have received had he or she been granted that annual leave. 

The Labour Court, in Kvaerner Cementation (Ireland) Limited – v – Martin Tracy DWT017 held that “the minimum period of annual leave may not be replaced by an allowance in lieu, except where the employment relationship is terminated”.

It is well established that the only lawful reason for payment for annual leave accrued is when an employment relationship is terminated.  I find that this complaint is misconceived, is out of time and is not well founded.

Decision:

Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaints in accordance with the relevant redress provisions under Schedule 6 of that Act.

CA-00060984-001            Payment of Wages Act 1991

For the reasons outlined, I have decided that the complaint is out of time and not well founded.

CA-00060984-002            Organisation of Working Time Act 1997

For the reasons outlined, I have decided that the complaint is misconceived, is out of time and is not well founded.

Dated: 12th August 2024.

Workplace Relations Commission Adjudication Officer:  Gaye Cunningham

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