Complainant

Respondent

Parties

Romas  Navierauskas

McManus Brothers Road Surfacing Ltd

Representatives

  Self-represented

Copacetic Business Solutions Ltd

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-00053235-001

12/10/2022

The complaint referred to the Workplace Relations Commission concerned non-payment of wages for the complainant’s last week working with the respondent and non-payment of public holidays and accrued annual leave on cessation of employment.

The respondent disputed the complaint of unlawful deductions from wages.  It was submitted that the deductions in question were made in accordance with a signed agreement between the parties.  

The complainant was living and working in Kilkenny and Cork in 2022.  He commenced working with the respondent in 2018, initially on the Isle of Wight and then in Scotland.

The complaint was about not receiving payment when he ceased employment with the respondent.  He wrote asking for payment but received no reply.  He began emailing the HR Manager asking why he had not received salary and payslip.  The complainant engaged an accountant, and she calculated the amount he was owed by the respondent.  The complainant included the detail of the accountant’s calculation in his complaint form.  The statement of complaint detailed the sum of €1,015.85 as wages not paid to the complainant in respect of his last week at work, the sum of €591.04 being the monetary value of unpaid public holidays and €1,566.64 being the monetary value of unpaid accrued annual leave, by reference to a 22-week period from 4 April 2022 to cessation of employment on 2 September 2022.

The respondent’s representative brought the complainant through its submission and asked the complainant about the monetary sums claimed.   The complainant was not aware of the HR Manager’s investigation or response to a complaint made by a member of the public in July 2022.  The complainant confirmed that he wrote emails in September 2022 regarding his resignation from employment effective 5 September 2022 and seeking payslips, payment for his last working week and payment for holidays owed.  The complainant sent the same email with the same repeated message up to three times a day.  The email address to which the complainant sent the emails of September 2022 was the address from which he received his payslips.  He did not receive a response to the emails.

The complainant was questioned about a vehicle damage report dated 20 December 2021.  The complainant stated that he had not seen this report whilst in employment and that he did not agree with the content of the report.   The complainant was referred to an email from the HR Manager of 6 January 2022 which communicated a final written warning to the complainant in relation to the vehicle inspection and which bore the complainant’s signature.   The complainant did not agree with the damage outlined in the vehicle report and did not accept responsibility for it as the vehicle was not solely used by him rather there was a team of 8 people who used the van.  The complainant accepted he signed the email of 6 January 2022 from the HR Manager.  He did not accept there was a meeting to discuss the damage to the vehicle.   The complainant said that he was told to sign the warning, or he would have to leave his job.  The complainant was asked about a statement of an employee, signed and dated 7 January 2022, who had acted as an interpreter for the respondent in its discussions with the complainant at a disciplinary hearing on 6 January 2022 in relation to the vehicle damage; the complainant disagreed with the parts of the statement which referred to the complainant fault and that he agreed to repay the vehicle damage of over €4,000.00 from his wages.  The complainant questioned why the statement had been made without been shown to the complainant, or its content agreed by him.  The complainant accepted that after the meeting of 6 January 2022, he had asked Mr McManus for a loan to cover the cost of a family member’s funeral.  The loan amount was €1,000.00 and it was repaid in full by the complainant.  The complainant was referred to a loan account document in his name and accepted that weekly deductions from his wages of €59.53 were made from 5 May 2022 to 8 September 2022 to repay the loan.  The complainant had received correspondence from the HR Manager advising of the deductions and the complainant was aware of the deductions from his payslips.  The complainant was asked about the respondent’s annual leave year of 1 January to 31 December and was referred to payslips which detailed holidays and public holiday pay.  When asked whether he recognised why the respondent made the deductions referable to damages and loan on the 1 September and 8 September 2022 pay dates, the respondent said he did not understand why the damages deductions were made.

The respondent outlined a background to the case involving a complaint from a member of the public and the respondent’s investigation of the complaint which concerned the complainant.

The complainant referred a complaint to the Commission with the named respondent being an entity with an address in Northern Ireland.  Features of the complainant’s employment indicate that he was contracted in Northern Ireland.  It was submitted that the complaint is outside the remit of the Workplace Relations Commission.

The respondent disputed the complaint of unlawful deductions from wages.  The deductions at issue were made in accordance with a signed agreement between the parties.  The respondent discovered in December 2021 that a vehicle driven solely by the complainant in employment had been damaged due to his negligence.  The complainant was interviewed on 6 January 2022 and accepted responsibility for the damage.  The complainant agreed to pay the cost of repairs which totalled £5,640.00.  The complainant also received a €1,000.00 loan from the respondent on 3 May 2022.  The complainant agreed deductions of €59.53 per week from his wages.  The total amount repayable by the complainant was £6,830.00.  The weekly deductions were made up until the complainant’s resignation from employment in September 2022.  At the date of resignation and following deductions from the complainant’s accrued annual leave and wages, the balance outstanding to the respondent was £3,563.07.  This amount remains outstanding.

The respondent referred to the complainant’s contract of employment which provided for deductions from wages in respect of damage to equipment. 

The respondent submitted that the deductions at issue were in accordance with a signed agreement, were reasonable, proportionate and adhered to the requirements of section 5 of the Payment of Wages Act 1991.  The complainant still owes the respondent a significant amount of money and the deductions were a legitimate attempt by the respondent to recover the money owed, where it had made efforts to engage with the complainant in resolving the debt outside of deductions to wages.

Summary of sworn evidence of Mr Matt Birch

Mr Birch has worked for the respondent company since 2006.  He is responsible for HR, payroll and all investigations.  The witness outlined his professional background, the nature of the respondent’s operations and terms of employment for employees working across jurisdictions, including Ireland.  The witness had a good relationship with the complainant and members of the complainant’s family who had also worked with the respondent.

The witness did not respond to the complainant’s email of 7 September 2022 resigning from employment but sent Mr McManus and the complainant’s line manager to speak with the complainant.

The witness outlined how the complainant had a pressing family issue in January 2022 which the respondent told the complainant it would help with.  In the January meeting concerning the vehicle damage, the repayment amounts of the damage cost was discussed and how long the deductions would continue.  The complainant was shown the mechanic’s report of the damage.  There was no question but that the complainant was going to be paying for the damage. The complainant was given the final written warning letter at that meeting. A loan to the complainant of €1,000.00 was agreed in May 2022.  Interest was charged on this for benefit-in-kind.  It was agreed that weekly deductions would be made of €59.53 from the complainant’s wages in respect of the loan to him, interest, and damage to the respondent’s vehicle.  Deductions of this amount over 100 weeks would satisfy the loan amount and cost of the vehicle damage.  This was explained to the complainant in May 2022.   The complainant never once questioned the deduction of €59.53 from his weekly pay in the pay periods from May 2022.  The loan account in the complainant’s name was on the payroll system, the complainant would have been provided with a copy of this document had he requested it.

The respondent takes seriously its health and safety responsibilities, and it addresses any damage to vehicles and the use of damaged vehicles with employees.   The respondent invests in quality vehicles, safety and driving training.  Employees have an obligation to look after their vehicles and the respondent strives to maintain standards, therefore it holds employees to account that do not look after their vehicle.  In this case, the complainant had reported no faults with his vehicle but it was in a bad state when he drove it into the yard at Christmas 2021.

The complainant had a contract, the terms of which required the complainant to give notice.  The complainant gave no notice. He abandoned his vehicle and the key and did not ask about repayment of the loan or damage.   This walking-out without giving notice caused major operational difficulties for the crew on which the complainant was working at the time and left the respondent in a very serious predicament.

The complainant was given a day’s leave on a public holiday.  The payment for a public holiday is detailed separately on the payslips.  In 2022, the complainant was accruing annual leave.  The complainant was paid on a Thursday/Friday each week for the week previous.

There was still a job there for the complainant with the respondent.  The respondent had no issue with the complainant’s work.

The complainant was employed by the respondent, an entity with a registered address in Ireland, and was working in the South-East of Ireland in the months preceding his resignation from employment in September 2022.  The complaint under the Payment of Wages Act 1991 (the “1991 Act”) concerns deductions from wages on the pay dates 1 September 2022 and 8 September 2022 and non-payment of public holidays and annual leave on cessation of employment.  Accordingly, I am satisfied that I have jurisdiction to make a decision in relation to the complaint.

I clarified at the hearing that the matter of a complaint received from a member of the public was not relevant to the adjudication of the complaint before me and would not form part of my decision.  As per the respondent’s submission, the matter before me solely relates to a complaint of unlawful deductions from wages.  The respondent did not contend that the complaint received was a factor in the wages payable to the complainant on his resignation and, in my view, it would not have been appropriate to do so, particularly where disciplinary processes had not been completed in respect of same. 

Payment of Wages Act 1991

Section 1 of the 1991 Act in relevant part 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

…”

Section 5 of the 1991 Act prohibits an employer from making a deduction or receiving a payment unless it is required by statute, authorised by a term in the contract of employment or is a deduction to which the complainant has consented in writing.  Section 5(2) sets out the requirements in relation to deductions and payments in respect of an act or omission or the provision of goods or services necessary to employment as follows:-

“An employer shall not make a deduction from the wages of an employee in respect of—

(a) any act or omission of the employee, or

(b) any goods or services supplied to or provided for the employee by the employer the supply or provision of which is necessary to the employment, unless—

(i) the deduction is required or authorised to be made by virtue of a term (whether express or implied and, if express, whether oral or in writing) of the contract of employment made between the employer and the employee, and

(ii) the deduction is of an amount that is fair and reasonable having regard to all the circumstances (including the amount of the wages of the employee), and

(iii) before the time of the act or omission or the provision of the goods or services, the employee has been furnished with—

(I) in case the term referred to in subparagraph (i) is in writing, a copy thereof,

(II) in any other case, notice in writing of the existence and effect of the term, and

(iv) in case the deduction is in respect of an act or omission of the employee, the employee has been furnished, at least one week before the making of the deduction, with particulars in writing of the act or omission and the amount of the deduction, and

(v) in case the deduction is in respect of compensation for loss or damage sustained by the employer as a result of an act or omission of the employee, the deduction is of an amount not exceeding the amount of the loss or the cost of the damage, and

(vi) in case the deduction is in respect of goods or services supplied or provided as aforesaid, the deduction is of an amount not exceeding the cost to the employer of the goods or services, and

(vii) the deduction or, if the total amount payable to the employer by the employee in respect of the act or omission or the goods or services is to be so paid by means of more than one deduction from the wages of the employee, the first such deduction is made not later than 6 months after the act or omission becomes known to the employer or, as the case may be, after the provision of the goods or services.”

Section 5(3) of the 1991 Act provides that an employer shall not receive a payment from an employee in respect of an act or omission by way of a deduction unless it complies with section 5(2).  Section 5(3)(b) requires an employer to give a receipt for a payment in accordance with section 5(3)(a) of the 1991 Act.

Section 5(6) of the 1991 Act provides:-

“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. “

There are time limits applicable to the presentation of complaints under the 1991 Act.  The relevant provisions are in section 41 of the Workplace Relations Act 2015 (the “2015 Act”) which provide:

“(6) 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.

(7) …

(8) 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.”

Application of the law

This complaint was presented for adjudication under section 41 of the 2015 Act on 12 October 2022.   In accordance with section 41(6) of the 2015 Act, as set out above, the period that may be investigated is 13 April 2022 to 12 October 2022.  

It is common case that a deduction of €665.39 detailed as damages was made from the complainant’s wages in pay period 35 and a deduction of €1,530.00 detailed as loan was made from his wages in pay period 36.  These were the last two pay periods of the complainant’s employment with the respondent in September 2022 as the complainant resigned from employment on 5 September 2022.  As per the payslips, the gross pay for the complainant in respect of pay period 35 was €873.81 based on hours worked, travel and subsistence, and the gross pay for the complainant in pay period 36 was €2,308.75 by reference to accrued annual leave entitlement.  Following deductions, the complainant received nil pay in both these pay periods.  On review of the complainant’s payslips, I note a weekly deduction marked loan deduction of €59.53 from the complainant’s wages from pay period 18, pay date 5 May 2022, to pay period 35, pay date 1 September 2022. 

By reason of the deduction amounts, the evidence before me and having regard to the weekly loan deductions from the complainant’s pay following the May 2022 loan, I am satisfied, on balance, that the deductions in pay periods 35 and 36 were made in respect of an act or omission of the complainant within the meaning of section 5(2) of the 1991 Act, namely the recoupment by the respondent of the cost of damage to a vehicle which it attributed to the complainant’s failure to properly look after and report any damage to the vehicle. 

I was referred to a clause in the complainant’s contract of employment with the respondent governing deductions from wages.  The relevant clause provides for deductions required by statute and deductions agreed with the employee in writing.  In relation to damages to equipment, the clause provides:-

“… Deductions will be made at the discretion of the employer and notified in writing to the employee.  On agreement between the employer and employee the deductions shall commence at weekly intervals to recover the amount due or as a total amount if employee is leaving employment”

I am not satisfied the deductions at issue have been made in accordance with section 5(2) of the 1991 Act for the following reasons.  The relevant term of the contract of employment provided that deductions would be made at the discretion of the employer and notified in writing to the employee.  The respondent exercised its discretion but did not notify the complainant in writing of the deductions.  Therefore, the deductions were not required or authorised by the term of the contract relied upon by the respondent and were not in accordance with the term.  Furthermore, whilst the evidence before me indicated an agreement to a weekly deduction of €59.53 to repay a loan, it did not support an agreement between the complainant and respondent that a total amount would be deducted in the event of the complainant leaving employment in compensation for damage to a vehicle.  I also do not consider the amount of the deductions to have been fair and reasonable in the circumstances.  The deduction of €1,530.00 had the effect of eliminating the complainant’s entitlement to compensation for loss of untaken annual leave on cessation of employment, a fundamental social right provided for in section 23 of the Organisation of Working Time Act 1997 and drawn from Article 7 of Directive 2003/88/EC.  The effect of the €665.39 deduction was to entirely deplete the complainant’s wages for his last working week with the respondent.  Finally, there was no evidence before me of the complainant having been furnished at least one week before the deductions at issue were made with particulars in writing of the act or omission and the amount of the deduction, as required by section 5(2)(a)(iv) of the 1991 Act.  The final written warning that issued to the complainant on 6 January 2022, the interpreter’s statement and/or the respondent’s record of a loan account in the complainant’s name do not meet the requirements of section 5(2)(a)(iv) of the 1991 Act.

The requirements of section 5(2) must be satisfied in full for there to be a lawful deduction in respect of an act or omission of an employee.   

Accordingly, I find that the deductions of €665.39 and €1,530.00 contravened section 5 of the 1991 Act.  This finding encompasses the part of the complaint relating to unpaid holiday pay.

On my review of the payslips for the relevant period 13 April to 12 October 2022, I am satisfied the complainant received benefit for the 4 public holidays the subject of his complaint by way of a paid day’s leave.  Accordingly, I find this part of the complaint as it relates to non-payment for public holidays not well-founded.

My decision is that the complaint before me is in part well founded and I direct the respondent pay to the complainant compensation of €2,308.75, which is the gross monetary value of annual leave properly payable to the complainant on cessation of his employment with the respondent, and €873.81, which is the gross amount of wages properly payable to the complainant in pay period 35, verified on the respondent’s hours report for the pay period in question.

My decision is that the complaint before me is in part well founded and I direct the respondent pay to the complainant compensation of €2,308.75, which is the gross monetary value of annual leave properly payable to the complainant on cessation of his employment with the respondent, and €873.81, which is the gross amount of wages properly payable to the complainant in pay period 35. 

The total amount of compensation to be paid by the respondent under section 6 of the Payment of Wages Act 1991 is €3,182.56.

Respondent to the complaint – Payment of Wages Act 1991 – Jurisdiction – Deductions – Act or omission of employee