PWD246

SUBJECT:

Appeal of Adjudication Officer Decision No's: ADJ-00042102 (CA-00053618-001).

BACKGROUND:

This is an appeal of an Adjudication Officer’s Decision made pursuant to Section 7(1) of the Payment of Wages Act, 1991.  The appeal was heard by the Labour Court on 05 January 2024 in accordance with Section 44 of the Workplace Relations Act, 2015.  The following is the Court's Decision.

DECISION:

This matter comes before the Court as an appeal by Daniel Pender (the Appellant) of a decision of an Adjudication Officer given under the Payment of Wages Act, 1991 (the Act) in his complaint against his former employer Sonoma Valley (the Respondent). The Adjudication Officer decided that the complaint of the Appellant was, in part, well founded.

Background

The Appellant was employed by the Respondent in a cash handling role. The Appellant was dismissed by the Respondent on the basis of an alleged theft by him of €2,000. That alleged theft was, according to the parties, the subject of ongoing criminal proceedings as of the date of the hearing of the Court. The Appellant denies theft on the occasion.

The Appellant was dismissed on 10th May 2022, and it is common case that the Respondent made a deduction from his wages on 20th May 2022.

The Appellant contends that an amount of €3,077.34 was deducted by the Respondent on the occasion.

The Respondent contends that a deduction of €2568.84 was made on the occasion, albeit, according to the Respondent, it has, since the date of the deduction, been making efforts to make a payment of €568.84 to the Appellant. Those efforts had not resulted in the payment of that amount, or any amount, to the Appellant in the period of almost 19 months between the date of the deduction and the date of the hearing of the Court.

Summary of the submission of the Appellant

The Appellant submitted that he had not engaged in theft of €2,000 as alleged by the Respondent or at all. The Respondent dismissed him on 10th May and stated in the dismissal letter that the Appellant was solely responsible for the theft of €2,000. That letter also advised the Appellant that the decision had been taken to recover €2,000 from his final pay which represents the missing money.

The Appellant submitted that he had been expecting payment of €3,077.34 in his final pay and in fact had received no payment at all. He had communicated by e-mail with the Respondent on 13th May 2022 stating that nowhere in his contract had he consented to the Respondent recouping money that goes missing from the cash room and stating that under no circumstances had he consented to allowing the Respondent to recoup money that he had been accused of taking from the Respondent. He stated that he maintained his innocence in that respect.

The Respondent advised the Appellant that the deduction could be made as per his contract, but he was never shown the clause of his contract which permitted that deduction. That clause or provision was not shown to him in his termination letter or highlighted in phone conversations with the Respondent or in his e-mail exchange or in the appeal hearing on 2nd June 2022.

At the first instance hearing of the within complaint the Respondent submitted that the relevant contractual clause states

“On signing this agreement you also permit the company to deduct from your pay any sums which you may owe the company, including without limitation any over payment (including over payment of holiday pay), or any cash advances made to you by the company”

There is no clarity in this clause stating that in the event of theft, damage of company property or cashier shortages the Appellant would be liable to owe the Respondent said sums of money. The termination letter did say that a deduction would be made but did not point to the clause in the contract of employment which would make such a deduction a lawful one.

In the event, an unlawful deduction in the amount of €3,077.34 was made from the Appellant’s wages on 20th May 2022.

Summary of the Submission of the Respondent

The Respondent submitted that a sum of €2,000 was missing from the cash processing room following completion of the night shift on 15th 16th April 2022. The Respondent conducted an investigation. A disciplinary process followed which was conducted fairly. That process resulted in a conclusion on the part of the Respondent that the Appellant was solely responsible for €2,000 of €20 notes going missing and a decision to dismiss the Appellant. When that decision was conveyed to the Appellant on 10th May 2022 he was advised that the Respondent would recover €2,000 from his final pay which would represent the missing money.

The Appellant appealed the decision to dismiss him, but it was upheld.

In the event, the Respondent ‘recovered’ €2,000 from the Appellant’s final wages of €2,568.84 on 20th May 2022 being the amount owing to the Respondent by the Appellant as a result of the theft of that amount. In addition, the Respondent withheld an amount of €568 from the wages of the Appellant on the occasion in light of further information relating to missing money which had come to the attention of the Respondent.

The Respondent submitted that the contract of employment of the Appellant permitted “the company to deduct from your pay any sums which you may owe the company”, and that contractual provision taken together with the fact that he had been notified on 10th May 2022 that €2,000 would be ‘recovered’ from his wages on 20th May 2022 and further notified on 13th May 2022 that a deduction was being made of all outstanding monies that he owed the Respondent meant that the deduction was lawful within the meaning of Section 5 of the Act.

A total amount of €2,568.84 was withheld from the wages of the Appellant on the occasion. However, the Respondent was subsequently advised by relevant authorities that the Appellant was not being charged with any further theft, and consequently had been in the process of paying €568 to the Appellant, being the amount in excess of €2,000 which had been deducted from his wages on 20th May 2022.

The Respondent submitted that the deduction from the wages of the Appellant was authorised by the provisions of Sections 5(1) and 5(2) of the Act and was not unlawful.

The Law

The Act at Section 5(1) provides as follows:

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.

Section 5(2) of the Act makes provision as follows:

5(2) 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(6) of the Act provides:

5(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.

Discussion and conclusions

The High Court in Marek Balans v Tesco Ireland Limited [2020] IEHC 55 made clear that this Court, when considering a complaint under the Act must first establish the wages which were properly payable to the employee on the occasion before considering whether a deduction had been made. The Court must then establish what wages were actually paid on the occasion. If the wages actually paid on the occasion were less than the wages properly payable, the Court must decide whether the difference amounted to a deduction within the meaning of the Act. If it is established that a deduction within the meaning of the Act had been made, the Court would then consider whether that deduction was lawful.

The parties are disagreed on the basis of their differing calculations as to the wages which were properly payable to the Appellant on 20th May 2022. The Appellant contends that an amount of €3,077 was properly payable to him on the occasion whereas the Respondent contends that an amount of €2,568.84 was properly payable to him.

The Court has examined the comprehensive submissions of the parties and the payroll data contained therein. It is not for the Court to operate or articulate the payroll of the Respondent. The Court however concludes, based on the payroll material submitted, that, on the balance of probabilities, an amount of €2,568.84 was properly payable to him on the occasion.

There is no dispute that the amount of wages actually paid to the Appellant on the occasion was nil. The Court therefore concludes that a deduction of €2,568.84 was made from the wages which were properly payable to him on the occasion.

The Respondent has submitted that the deduction which took place on the occasion was in respect of money owing to the Respondent as a result of the theft of €2,000 by the Appellant. It further submitted that an additional deduction of €568 had been made on the occasion for other reasons not related to the recovery of money owing, and that this money had been in the process of being paid to the Appellant as of the date of the hearing of the Court.

It is clear that the deduction which was made from the wages properly payable to the Appellant on 20th May 2022 exceeded the amount of the theft alleged to have taken place, and consequently exceeded the amount allegedly owing to the Respondent by the Appellant on the occasion.

The Act at Section 5(2)(v) makes provision as follows:

5(2) An employer shall not make a deduction from the wages of an employee in respect of—

(a) any act or omission of the employee,

(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

The Court therefore concludes that, by operation of the law at Section 5(2)(v), the deduction of an amount exceeding the amount of the alleged theft underpinning the deduction on the occasion must be unlawful.

Decision

The Court decides that a deduction was made from the wages properly payable to the Appellant on 20th May 2022 and this deduction was, by operation of the law, unlawful. The Court orders the payment of €2,568.84 to the Appellant, being the amount which the Court considers reasonable in the circumstances.

The Court so decides.

	Signed on behalf of the Labour Court
	Kevin Foley
AR	______________________
30 January 2024	Chairman