Complainant

Respondent

Parties

James McMahon

Health Services Executive

Representatives

Geard Kennedy  SIPTU

Valerie Enright Employee Relations Manager with HSE  

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-00048539-001

08/02/2022

The Complainant commenced employment with the Respondent in 2017 as a Porter in UL Hospital. The Complainant submitted that the Respondent failed to pay him a contractual entitlement in the amount of €136.64 on the 27/1/2022. The Respondent disputes that there is any contractual entitlement to the alleged figure and denies the claim.

On the 8/2/2022, the WRC received a complaint form by email pursuant to the Payment of Wages Act 1991 as amended.

Summary of Complainant’s Evidence, James McMahon

The Complainant confirmed that he commenced employment as a Porter based at UL Hospital in 2017. He confirmed receipt of a contract of employment which was exhibited at the hearing. The Complainant confirmed that he understood further to the terms of his contract, that he was entitled to receive a premium payment of time and ½ for hours worked in excess of working 39 hours per week.  The Complainant confirmed that he worked a shift patron for the period 3/1/2022 to 16/1/2022 and for the first week he was rostered for 56 hours that week, and worked 8 hours over 7 days, for the second week he was rostered for 24 hours, and worked 8 hours per day over 3 days, which he stated provides a total of 80 hours, and he was paid for 78 hours.

The Complainant stated that in his pay slip he was not provided with a total or breakdown of the hours worked for each week but given an average 39 hours per week. The Complainant stated that he was not aware of any provision in his contract that allowed the Respondent to average out his hours over a six-week period.  The Complainant confirmed that he first raised this issue in 2017 verbally and in writing in 2019 with the services manager querying why he worked 56 hours in a week and was not being paid overtime for hours worked in excess of 39 hours. The Complainant confirmed that he was informed by the porter’s services manager in 2022 that his hours were averaged out over a six-week period. The Complainant confirmed that there was no reference in Circular 31/2021 to allow the weekly hours worked to be averaged over a six-week period.

On the second hearing day the Complainant clarified that the first time he was made aware of the averaging process carried out by the Respondent over a six-week period, was by way of letter from the Respondent dated the 29/ 7/2021.

In cross examination by the Respondent’s representative on the second hearing day, it was conceded by the Complainant that he didn't work 56 hours for the week from 3/1/2022 to the 10/1/ 2022 as he was absent from work due to illness related to COVID-19. The Complainant did not dispute the details contained in an attendance record exhibited at the hearing by the Respondent’s representative which noted that he was absent from work on COVID-19 paid leave for the period in question.

The Complainant stated that he couldn't recall whether he was on leave or not during this period but stated that he was not disputing the records exhibited at the hearing which noted he was absent on special Covid-19 paid leave.  The Complainant stated that he returned to work after his sick leave absence on the 9/1/2022 and worked 8 hours on that date and stated that he worked 24 hours the following week.

Written Submissions

It was submitted by way of written submissions on behalf of the Complainant that the Respondent has breached the provisions of the Payment of Wages Act 1991 by failing to pay him wages properly payable to him under the provisions of his employment contract.

It was submitted that the Complainant is entitled to be paid at the agreed overtime rate of time and 1/2 after the completion of 39 hours work in in any given week.  It was further submitted that the Respondent’s contention that the Complainant is subject to the averaging of these hours over a six-week period and that he can work in excess of 39 hours per week without attracting the agreed premium rate of pay is incorrect and incompatible with section 5 (6) (a) of the Act. It was further submitted that the non-payment of the disputed premium rate is a deficiency in pay and therefore should be treated as an unauthorized deduction from pay.

It was submitted that the Complainant’s contract of employment provides at Section 8 that his contracted weekly hours of attendance are 39 hours per week and further states that “you may be required to work overtime, remuneration for which would be in line with nationally approved rate for your grade”. It was further submitted that the approved rates for overtime are set out in Circular 31/2021 which came into effect on the 1/7/2021 and equate to time plus 1/2 for the hours worked.

Accordingly, it was submitted that further to the terms of the Complainant’s contract and the provisions of Circular 31/2021 that the determining factor regarding the payment of overtime is the completion of the standard weekly hours in any given week, which in this case, is 39 hours per week. It was submitted that the Complainant and his trade union have raised this matter with the Respondent however, the matter remains unresolved.

It was further submitted that for the purposes of this complaint the Complainant has identified a two week pay period from the 03/01/2022 to 16/01/2022, which fell due for payment on the 27/01/2022, which falls within the cognisable period for this complaint. It was further submitted that during the first week the Complainant’s rostered hours were 56 hours and 24 hours for the second week. It was further submitted that the Complainant’s normal hourly rate of pay at that point in time was €16.0764 and that on the 27/1/2022 he received payment for €1253.96 which equates to €16.074 multiplied by 78 hours. It was submitted that the pay slip for this period reflects the weekly work hours as being 39 hours per week. It was further submitted that the premium rate of pay for hours worked in excess of 39 hours per week, is €24.114. Considering that the Complainant for the first week was rostered for 17 hours more than 39 hours the application of this rate would determine that there was a shortfall in wages due to the Complainant for that week in the sum of €136.64 that being the difference between basic pay and premium pay for the relevant working period.

It was further submitted that the Complainant relies on the High Court decision in Marek Balans v  Tesco Ireland Limited 2020 IE HC55 in support of his case.  The Complainant contended that the failure of the respondent to pay the Complainant an additional sum of €136.64 on the 27/01/2022 equates to an underpayment of wages properly due to him and as such should be treated as an unlawful deduction of wages as per Section 5(6) of the Act.

On the first hearing day it was submitted that the correct figure regarding the disputed payment is €136.64 and that the figure in the complaint form is incorrect.

It was submitted as closing remarks that the Respondent is trying to import terms into the contract by reference to the averaging out of hours worked over a six-week period, which do not exist. It was further submitted that Circular 31/2021 makes no reference to this averaging practice over a six-week period. In conclusion it was submitted that the terms of the Complainant’s contract, and the Circular, both refer to 39 hours as the standard working week and that overtime is payable in respect of hours worked in excess of 39 hours.

The Respondent refutes the claim on the basis that the disputed amount is not properly payable as alleged by the Complainant, and therefore no unlawful deduction has the occurred as per the terms of the 1991 Act.

The Respondent’s representative decided not to call any witnesses to give evidence at the hearing of this case on the basis that all the documentation was agreed with the Complainant. The following is a summary of the Respondent’s written and oral submissions presented at the hearing.

It was submitted that the Complainant predominantly worked on a “House Roster" which provided cover to most areas of the hospital. The Complainant was required to work a flexible roster in this role mainly between the hours of 08:00 to 20:00 Monday to Sunday, on occasion the Complainant was required to work outside these times due to service needs.

It was submitted that the Complainant no longer works in this area as he exited this role on 6/2/ 2022 and commenced in a new position in UHL on 7/2/2022 where he works a fixed 39-hour roster.

It was submitted that Section 8 of the Complainant’s contract of employment requires the Complainant to work the agreed roster as advised by his line manager, Section 8 provides:

“The contracted working hours of attendance for your grade are 39 hours per week. Your normal weekly working hours are 39 hours……. You will be required to work the agreed roster/ on callarrangements advised to you by your line manager.”

It was submitted that as the Complainant was working a three-week roster, but receives remuneration every two weeks, his average working week would be calculated over a six-week period, i.e. (2 x roster cycles & 3 x pay periods). It was further submitted that as the Complainant is remunerated fortnightly during this 6 week roster any hours worked over 234 hours would attract an overtime rate of pay.

It was submitted that the Complainant was informed on two occasions, by letter on 29/7/2021 and in a meeting with his Line Manager on 12/11/21, that his contract is not a flat 39 hour week, but an average of 39 hours per week over a period of time to enable service cover for 7 days per week, and that the Complainant shares a similar roster to approximately 28 other portering staff.

It was submitted that as the Complainant was working a 3-week roster but is remunerated every 2 weeks, his average working week would be calculated over a 6-week period. It was further submitted that if the Complainant had worked over the average 39-hour week over this period, then he would be entitled to claim overtime.

It was submitted by the Respondent’s representative at the hearing that the practice of the Respondent was that all employees were paid for a 39-hour week, which is calculated by reference to the average hours worked over a six-week period. It was further submitted that regarding this complaint that the Complainant was rostered to work 55 hours for the week of 3/1/2022 to 9/1/2022, but in fact only worked 8 hours that week due to his absence on COVID-19 paid leave. The Respondent’s representative exhibited an attendance record at the hearing, for the week of 3/1/2022 to 9/1/2022 which noted the Complainant’s absence on COVID-19 paid leave.  It was submitted that the Complainant returned to work on the 9/1/2022 and worked 8 hours that day.  

It was further submitted that relying on the terms of the Circular 003/2009 and Section 8 of the Complainant’s contract, that the provisions of the contract allow the respondent to work the rosters in such a way that it is permissible to calculate an average amount of hours worked over six-week period.

The Law 

Section 1 of the Payment of Wages Act 1991 (the Act) defines “wages” in the relevant part 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 (1) of the Act prohibits employers from making deductions from the wages of employees or receiving any payment unless the deduction is permitted by statute, or is authorised by a term of the contract, or it is a deduction to which the employee has consented to in writing.

Section 5(5) provides that an employer may make a deduction from the wages of an employee where the purpose of the deduction is the repayment to the employer of the overpayment of wages to an employee without any regard to the restrictions set out in sections 5(1), (2), (3) and (4) of the Act.

Section 5(6) stipulates the following;-

“(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.”

Pursuant to the provisions of the Act, in the first instance, I am required to ascertain what wages are properly payable. Having established that, I then need to consider whether there was a deduction in the proper payment and, if that was the case, whether the deduction arose for one of the reasons set out in Section 5(1) of the Act.

In Marek Balans v Tesco Ireland Limited [2020] 31 E.L.R 125 MacGrath J. considered the application Section 5 of the Act. MacGrath J. determined that when considering whether a deduction from wages has been lawfully made, the concept of wages “properly payable” is central to the court's analysis and should be addressed before considering the question of a deduction or whether a deduction is unlawful, relying on the decision of Dunnes Stores (Cornelscourt) Limited v Lacey [2007] 1 I.R. 478.

In Sandra Cleary & Ors v B & Q Ireland Limited [2016] IEHC 119 Mr. Justice McDermott in the High Court considered the definition of wages and expenses as set out in Section 1(1)(i) of the Act.  The case concerned several elements relating to different bonus/allowance payments. The first element concerned a claim by several of the appellants who claimed an entitlement to be paid a winter/summer bonus under their contracts of employment. The bonus was normally paid twice annually. The respondent announced the withdrawal of these two seasonal bonus payments due to the implementation of cost reducing policies. The appellants claimed that the summer bonus, payable that year, should nevertheless have been paid since it was earned and/or accrued during the previous August to January. It was also claimed that the withdrawal of the bonus was an unlawful deduction from wages and in breach of the provisions of the Act.

The claims were first brought to the Rights Commissioner where they were upheld. The respondent appealed the Rights Commissioner's decisions to the Employment Appeals Tribunal, and they were overturned in respect of both points. The High Court overturned the decision of the Tribunal in finding that the Tribunal had erred in law in holding that the withholding of the bonus payment for the period already worked was lawful. In this regard Mr. Justice McDermott stated at paragraphs 63 and 64;

“63. The employees worked the relevant period pursuant to the terms of the contract and scheme, thereby accruing a bonus entitlement under the scheme. I am not satisfied that the terms of the bonus scheme properly interpreted, allow for the unilateral withholding of a bonus payment in respect of a period worked by the employee during which the workers had a legitimate expectation that the bonus was accruing and would be paid. I am satisfied that the bonus for August 2011 to January 2012 was properly payable in June 2012 notwithstanding the withdrawal of the scheme in January 2012…….The payment of the bonus crystallised as a contractual obligation once it was “earned” in accordance with the terms of the scheme as operated. I am satisfied that the Tribunal erred in law, in interpreting the discretion vested in the employer to withdraw the bonus scheme at any time as being applicable or attaching to this period.

64. I am therefore satisfied that notwithstanding the employer's difficult financial circumstances in this case, it bore a contractual obligation to pay the three per cent bonus accrued to each employee during the relevant six month period and that this was a bonus properly payable as “wages” under s.5(1) of the 1991 Act.”

It is clear from the rationale of this High Court decision that in order for the bonus payment to be considered wages “properly payable”, such wages need to be “earned” or “worked” in accordance with the terms of the particular scheme.

Application of the Law to the facts 

Cognisable Period

Section 41 (6) of the Workplace Relations Act 2015 (as amended) provides that an Adjudication Officer can hear a complaint if it is submitted to the WRC within 6 months from the date of the contravention to which the complaint relates unless an extension of time is sought subject to the provisions of Section 41 (8).

This period dating back 6 months from the date of receipt of the complaint form by the WRC is the relevant period for the purposes of adjudicating on complaints regarding alleged breaches of the 1991 Act. The complaint form was received by the WRC on the 08/02/2022, accordingly, I find that the cognisable period for this complaint is from the 07/08/2021 to the 08/02/2022.

The Complainant alleges that his wages were unlawfully deducted in the sum of €136.64 on the 27/1/2022. Accordingly, I find that the complaint as framed is within the cognisable period.

What wages are properly payable?

In determining whether the Complainant has been the subject of an unlawful deduction in the sum of €136.64 contrary to the provisions of the Act, I must in the first instance determine, applying the rationale of MacGrath J. in Balans, what wages were properly payable within the cognisable period and then consider the question of a deduction within the cognisable period or whether a deduction is unlawful.

The Complainant has identified a two week pay period from the 03/01/2022 to 16/01/2022 which fell due for payment on the 27/01/2022 and submitted that his wages were unlawfully deducted in the sum of €136.64 on the basis that he worked 56 hours during the first week from the  3/1/2022 to 9/1/2022 which is in excess of the standard weekly hours of work of 39 hours therefore he should have been paid an overtime rate of time and ½ for 17 hours equating to €136.64. The Complainant submitted that he had a contractual entitlement to an overtime rate for hours worked in excess of 39 hours per week based on Section 8 of his contract, and the terms of Circular 31/2021.

The Respondent denies the claim on the basis that the Complainants’ average weekly hours are calculated over a six-week period on the basis that he worked a 3-week roster but is remunerated every 2 weeks, therefore his average working week would be calculated over a 6-week period. It was further submitted that if the Complainant had worked over the average 39-hour week over the relevant six-week period, he would then be entitled to claim overtime.

I note that the Complainant’s case is grounded upon the fact that he worked 56 hours during the period 3/1/2022 to 9/1/2022 which is in excess of the standard weekly hours of work of 39 hours. I note the Complainant stated in evidence that he was rostered for 56 hours and worked 8 hours over 7 days that week. On the second hearing day the Complainant stated that he couldn't recall whether he was absent on leave for the week in question but conceded that he did not dispute the attendance record exhibited at the hearing by the Respondent’s representative which confirmed that he was absent on COVID-19 paid leave from the 3/1/2022 to 9/1/2022. I accept the Complainant’s evidence when he stated that he returned to work from his sick leave absence on the 9/1/2022 and worked 8 hours on that date.

I accept the Respondent’s submission that the Complainant did not work 56 hours during the period from 3/1/2022 to 9/1/2022, based on the documentary evidence exhibited at the hearing and the Complainants evidence as adduced. Accordingly, I am satisfied that the Complainant worked 8 hours during the relevant period and therefore I find that no entitlement arises to an overtime rate based on the terms of the contract as submitted for the week 3/1/2022 to 9/1/2022. Even if I accept that further to the terms of the Complainant’s contract, that he was entitled to be remunerated at an overtime rate for hours worked in excess of 39 hours, this entitlement is grounded upon having “worked” the hoursor “earned” the premium payment.

Applying the rationale established by McDermott J. in Sandra Cleary & Ors v B & Q Ireland Limited [2016] IEHC 119, the relevant bonus or allowance must have been “worked” or “earned” as per the terms of the bonus scheme, for it to be considered “properly payable”. In the circumstances of this case, I am satisfied that the Complainant did not work in excess of 39 hours from 3/1/2022 to 9/1/2022 as required by the terms of his contract, accordingly I find that no entitlement to an overtime rate of pay, arises for consideration.  

I refer to the terms of Circular 31/2021 at Appendix A, and note the general principles governing overtime arrangements, provide that “employees may be paid overtime rates for hours worked in excess of the standard weekly whole time hours for the category/ grade”.  Considering my finding of fact that the Complainant only worked 8 hours during the relevant period, which does not exceed the standard weekly whole-time hours in respect to the Complainant’s position, I find that no entitlement arises to an overtime rate of pay further to the terms of the Circular.

Accordingly, applying the rationale of the High Court in Balans, as set out by MacGrath J, I find that, as no evidence was put before me to support a finding that the Complainant was entitled to a payment of €136.64 on the 27/1/2022, as alleged,  I am satisfied that the amount of  €136.64 does not come within the definition of wages “properly payable” as provided for in Section 5 (6) (a) of the Act.  Therefore, I find that the deduction of €136.64 as claimed by the Complainant does not constitute an unlawful deduction for the purposes of Section 5 (1) of the Act.

For the reasons set out above I declare this complaint under the Payment of Wages Act 1991 to be not well founded.

Wages properly payable – entitlement to an overtime rate- hours worked/earned