Complainant

Respondent

Parties

Denis  Canty

Altada Technology Solutions Ltd T/A Altada (amended due to technical error )

Representatives

  Appeared in Person

In Receivership, no appearance by the Receiver

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-00056622-001

12/05/2023

On May 12, 2023, the Complainant submitted a complaint of unlawful deduction in wages to the WRC. He introduced himself as the Chief Technology Officer, who had experienced a €9,528.43 deduction of wages on 30 July 2022.

The WRC highlighted that the complainant did not fall within the 6-month statutory timeline.

On 22 May 2023, the WRC placed the CEO of the Company on notice of the complaint in addition to the issue of the statutory time limits.

On 16 August 2023 both parties were invited to attend an oral hearing in the case scheduled for 13 October in Cork

On 6 October 2023, I wrote to the complainant and sought “a written outline submission inclusive of a chronology and any documentation …”

On the same day, I copied this to the Respondent and marked it for the attention of the CEO or any Receiver at the Company address. I inquired whether the Receiver was sending a representative to the hearing.?

 There was no appearance at hearing by or on behalf of the Receiver.

At the conclusion of the hearing, I requested sight of the contract of employment, and the 28th of April 2022 correspondence from the Receiver. these were received.  

The Complainant gave evidence under oath at hearing.

Application for Reasonable Cause, extension of time.

On 22 May 2023, the Complainant sought an extension of time on reasonable cause. He submitted that the company had entered receivership on 4 November 2022 and was going through a sales process “until recently “

he added that.

 “On 23 March 2023, the receivers were advised by the department of social protection that any insolvency claim for the reduction in wages or discrepancy in pay would be rejected and employees would have to submit a complaint to the WRC. “

By way of formal application at hearing, the complainant submitted that he had traversed a period of storm and stress since the Receivership was initiated in November 2022. He understood that the Receivers would unravel and redirect what he was owed, and he hung on every email from there office.

There was a delay in clarifying just how the unravelling process would unfold and it was not until March 2023 that the unravelling process was stratified by the Receivers and directed towards.

1 the Department of Social Protection

The Complainant exhibited a letter from the Receivers dated 20 April 2023, which outlined that the Receiver intended on claiming arrears of wages and annual leave via an IP1 form. Cap of €600 per week and maximum of 8 weeks gross weekly pay. This was envisaged to take 6-8 weeks and was headed “insolvency claim”.

2 The WRC  

The employees should be advised to make a complaint to the WRC against their former employer in relation to the reduction in their wages. The WRC will adjudicate on whether the re4duction was a change in the terms and conditions of their contract or part of their new employment contract.

The Employee Declaration form was generated on Friday 28 April 2023 on behalf of Grant Thornton.

An erroneous end date had been entered into the documents directed at Revenue. The Complainant submitted that a delay followed prior to correction for which he was not responsible.

The Complainant described a very challenging period surrounding the pay cuts and eventual company demise. There was a high media interest. It was the first time he had experienced such a disconnect and period of uncertainty.

He had held the view that the Receivers were in effect a “one stop Shop” and he had co-operated fully with that process.

He submitted that as soon as he was notified of the 2-step process, DSP and WRC, he acted in lodging his claim on 12 May 2023 before the WRC.

Substantive Case

The claim was lodged on 12 May 2023 and reflected that the “employer has made an unlawful deduction from my wages “on 30 July 2022. The amount claimed was €9,528.43.

The Complainant worked as Chief Technology Officer at the Respondent Company (In Receivership) from 4 August 2021 to 24 November 2022. There were 70-100 employees.

The Complainant claimed the value of the pay differential due to unilateral deduction over the course of July, August and September 2022. He had been.

He exhibited a contract of employment headed Altada, the trading name of the company, in whose name this claim is submitted.

 Remuneration was listed as €125,000 per annum plus an annualised performance bonus. The contract was signed by both parties on 4 August 2021.

The Complainant confirmed that he had taken a lesser salary than his previous work and the bonus payment was very important as a result. He had received €26,000 bonus on 2021 calculations.

The Complainant submitted that he had been subjected to a unilateral deduction in wages over the course of the months July, August and September 2022.

The Complainant told the hearing that the respondent company was a start up linked to the US. It was a company earmarked for success and confidence was high.

Concerns were raised by July 2022 when some staff were placed on temporary layoff. The remaining staff were subjected to a unilateral cut in salary of

July 22.5%  plus a deficiency in wages received

August 22.5%

September 22.5%

Both of these measures were aimed at saving jobs and carried an expectation of remedial action.

The Complainant submitted that he had also been denied his bonus which was important as it was linked to Company Revenue.

The US had activated terminations of employment first. Ireland followed.

Pay ceased fully for the complainant in October 2022. Receivership followed on November 4, 2022, under the auspices of Grant Thornton. The Complainant exited the business on 24 November 2022.

Thereafter a process of seeking new investment followed.

The Complainant submitted that his contract was unaltered from the commencement date and pay had not risen.

He had continued to work with the Receivers to recoup his losses.

The Complainant claimed € 48, 571.49. The composite of the wage deduction over 3 months and the bonus

The complainant confirmed that the unpaid salary for October and November 2022 plus annual leave was incorporated into a separate process by the Receiver and he had attained preferential creditor status from which they had not been an outcome.

He understood the business had been sold in the interim, but residual debt remained.

I requested some clarification on the distinction between both pay claims and I requested sight of what ever correspondence was in the complainant’s possession to that end.?

This was clarified to my satisfaction.

The Complainant has raised his claim under the trading name for the company. I appreciate that the Contract is headed by the same name.

However, the Employers name is listed as Altada Technology Solutions Ltd trading as Altada on the contract. The pay slip reflects Altada Technology Solutions ltd. A CRO search indicated the legal entity cited on the payslip, having registered in 2017.

I explained the distinction in both names. As I did not have access to a respondent to agree an amendment of this title outside of the trading name, I have reflected the facts of the case against the respondent marked on the complaint form by the complainant. I am mindful of the statutory limitation period attached to the claim.

The Complainant gave sworn evidence on the identity of his employer.

There was no appearance by or on behalf of the Respondent or its Receivers.

Preliminary Issue on Statutory Time Limits

The claim before me reached the WRC on 12 May 2023 and refers to a deduction in wages made on 30 July 2022.

My jurisdiction in this case is drawn from Section 41(6) of the Workplace Relations Act, 2015.

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

The date of contravention has prompted much scrutiny and interpretation by bodies such as the EAT and WRC.

The High Court in a decision by the then Hogan J in HSE V Mc Dermott [2014] IEHC 331 is of interest here as the case evolved from a dispute surrounding a salary pay scale from 2007 but advanced to the Rights Commissioner in June 2011, citing the cognisable period as January to June 2011.

Hogan J rejected the HSE argument that time runs from the date of a particular contravention but instead held that what matters here is that time runs not from the date of a particular contravention but rather the date of the contravention to which the complaint relates. Everything turns on how the complaint is framed.

At first glance the date of contravention in this claim is 27 July 2022 as the date of the first imposed pay cut. This places the claim outside the reaches of section 41(6) of the Act.

The Complainant has applied for an extension of time in accordance with Section 41(8) of the Act.

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.

I have given some thought to the complainant’s application which was not countered at hearing.

The seminal decision on extension of time for good reason was Donal O’Donnell and Catherine O’Donnell v Dun Laoghaire Corporation [1991] ILRM 30. This case involved an application a provision of the Rules of the Superior Courts which permit an extension of time for bringing judicial review proceedings “for good reason “

“….. what the plaintiff has to show (and I think the onus is on the plaintiff (O84 r.21) is that there are reasons which both explain the delay and afford a justifiable excuse for the delay. “

The Labour Court has long since set the test for application of an extension of time on reasonable cause in Cementation Skanska v Carroll WRC 0338

“ .. the claimant’s failure to present the claim within the six-month time limit mist be due to the reasonable cause relied upon. Hence there must be a causal link between the circumstances cited and the delay and the claimant should satisfy the Court, as a matter of probability, that had those circumstances not been present he would have initiated the claim in time …

.. The court should consider if the respondent has suffered prejudice by the delay and should also consider if the claimant has a good arguable case”.

This is a case where I have not heard from the Respondent Receivers by submission or otherwise.

I have reflected on the complainant’s evidence and the placing of the Grant Thornton issued documentation:

20 April 2023 Receiver notice on “outstanding entitlements “

28 April 2023 Receiver notice of IP1 form and notice of distinction from deduction in wage scenario.

“Please be advised the IP1 form only contains arrears of wages relating to the period up to the date of your resignation. However, the DSP has advised that any reduction in wages should be reported/ claimed through the WRC who will adjudicate on same and if awarded a further claim may be submitted “

The instant claim was submitted some two weeks later.

I find that the complainant has raised a set of extraordinary circumstances which both explain and excuse his delay in submitting his claim for a deduction in pay recorded in July 2022.

I find that the unilateral pay cut was accompanied by a commitment from the company to make good the loss and the complainant was under the impression that this would occur.

The complainant is not experienced in raising claims before the WRC and was honestly unaware of the statutory time limits applicable to his claim.

He described a tumultuous period in his work July – November 2022 and this did not abate within the Receivership process.

I can accept that he was under the viewpoint that the Receivership would address all personal debt owed to him and it was not until the last week of April 2023 that the complainant was placed on proper notice that this was not the case. I accept he is a novice in this world and has no experience of Receivership.

He had been an active participant in the Receivership process and had no idea of the two-stage process for recovery of wages owed.

I find that I must accept the complainants undisputed evidence that he was immersed in a Receivership process from November 2022 to the present day which kept him from submitting his claim in time before the WRC.

Based on the extraordinary circumstances of upheaval in his world November 2022 onwards, this constitutes a proper situation where I can grant an extension of time based on the equitable doctrine of reasonable cause.

The cognisable period for this claim is 12 May 2022 to 12 May 2023. Cementation Skanska applied.

Substantive case

I have been requested to make a decision in this case. In reaching my decision, I have had regard for the documentation submitted by the complainant and evidence adduced at hearing.

I must decide if the pay deductions of July August and September 2022 amount to a contravention of the Payment of Wages Act, 1991.

The claim comes forward from a November 4, 2022, Receivership at Altada. The employment terminated on November 28, 2022.

My jurisdiction in this case lies within the parameters of section 5 of the Payment of Wages Act, 1991. I have extended time for reasonable cause.

Regulation of certain deductions made, and payments received by employers.

5.— (1) 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 complainants uncontroverted evidence is that he sustained a unilateral pay cut of 22.5% across the months of July August and September 2022. In addition, he did not receive the enormity of the reduced rate for July 2022.

On his complaint form, he claimed the sum of €9,528.43 as comprising those deduction and erroneous pay in July 2022.

At hearing, he advanced the nonpayment of bonus. I have considered this contractual term but find that as it was not listed in the body of the complaint or indeed the narrative of the complaint, that aspect of claim is not properly before the WRC as the respondent is not visibly on notice of this claim.

I am strengthened in this by.

 The decision of the High Court in County Louth VEC v Equality Tribunal [2009] IEHC 370

is a seminal case on the question of when proceedings before a statutory tribunal can be amended.

 In that case McGovern J set out the following principle of law: -

• If it is permissible in court proceedings to amend pleadings where the justice of the case requires it, then, a fortiori, it should also be permissible to amend a claim as set out in a form such as an originating document before a statutory tribunal, so long as the general nature of the complaint remains the same.

The bonus is most definitely a contractual term, but not properly before me as the general nature of the complaint would be vastly different to the tune of c. €39, 000.

Legal Title of the Employer / Respondent

Having listened carefully to the complainant and in the absence of the respondent at hearing, I have reflected on the legal entity cited on the complaint form. It the trading name as opposed to the legal entity listed on CRO and Payslips. I did explain the precedent in Travelodge Management ltd v Slywia Wach At the Labour court in 2015, EDA1511. This is a case which the Labour court held that the case had  been wrongly directed at the wrong employer and found reason to overturn an award made at the Equality Tribunal .

I accept the complainants evidence that at all times he worked under a contract of employment headed Altada .

I have applied the illustrative reasoning from   the Labour Court in   Auto depot ltd and Vasile Mateiu DWT 1922 which identified a technical error amounted to a supporting reason to amend the legal title.

I have also reflected on the High Court case of O ‘Higgins v UCD and Anor 2013 MCA when Hogan J

“Even if the wrong party was, in fact, so named, no prejudice whatever was caused by reason of that error (if, indeed, error it be) …. In these circumstances, for this Court to hold that the appeal was rendered void by reason of such a technical error would amount to a grossly disproportionate response and deprive the appellant of the substance of her constitutional right of access to the courts.”

I find that the complainant was mistaken by not applying the legal long title of the respondent, but no prejudice arises as the respondent and its receivers are on long term notice of the claim.

I find that the trading name is a technical error and move to correct and amend this title to

Altada Technology Solutions Ltd. My decision will be amended accordingly.

Were the amounts properly payable?

The authority on whether wages are properly payable is taken from the High Court case.

Marek Balans v Tesco Ireland ltd [2020] IEHC 55,

I am satisfied from Section 8 of the contract that the complainant had a legitimate expectation of an annual salary that was disturbed unilaterally in July 2022.

I am satisfied from his uncontroverted evidence at hearing that the complainant did not consent to the deduction in wages over the months of July August and September 2022.

I am also satisfied that the deduction was not necessary by statute or contract.

I find that the complainant had an illegal deduction in his wages by 22.5% over the months of July August and September 2022. In addition, he had a deficiency in wages received on July 27, 2022.

The total amount is €10, 238.01

I find his claim is well founded.

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

Section 6 of the Payment of Wages Act, 1991 requires that I make a decision in relation to the complainant in accordance with Section 5 of that Act.

I have found the claim well founded.

I order the Respondent to pay the Complainant € 10, 238.01 as reasonable compensation for the contravention of Section 5 of the Act.

This sum is subject to legal deduction is they arise.

The breakdown of this amount:

€5550.51 for July 2022 (deduction in wages and deficiency in pay received )

€ 2, 343.75 for August 2022 deduction in wages

€ 2, 343.75 for September 2022 deduction in wages

Payment of Wages. Company in Receivership