Complainant

Respondent

Parties

Aidan  Best

Ur Insurances T/a Actual Insurances

Representatives

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991

CA-00056380-001

28/04/2023

The Complainant stated that that the Respondent made an illegal deduction from his final salary payment in the amount of €2,019.27. This was disputed by the Respondent.

The Complainant stated that his employment with the Respondent terminated on 14 February 2023 and he was due his final pay on 21 March 2023. He stated that he received an email from the Respondent on 20 March 2023 stating that there had been overpayments on his commission throughout his employment and that they would be offsetting these against his final pay. He stated that an amount of €2,019.27 was subsequently deducted from his final pay. While he stated that the Respondent had informed him that this was due to advance commission payments having been made to him, he never had any conversations nor was there anything in writing about such advance payments being made.

In the evidence presented, the Respondent claimed that the Complainant received advance commission payments to boost his earnings with the expectation that he would earn more commission in the future and that the advance payments would be offset against these future earnings. However, due to the Complainant's subsequent performance, he did not generate enough commission. When it was time to make his final salary payment, the Respondent discovered that an overpayment had occurred because of the excess commissions initially paid to the Complainant. Consequently, they deducted the amount of this overpayment.

Furthermore, the Respondent asserted that rather than being underpaid, the Complainant had, in fact, been overpaid. This was because the advance commission payments made to him resulted in him owing the Respondent €2,163.08.

Section 5(1) and (2) of the Payment of Wages Act 1991 states:

(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.

(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(5) of the Payment of Wages Act 1991 further states as follows however:

(5) Nothing in this section applies to—

(a) a deduction made by an employer from the wages of an employee, or any payment received from an employee by an employer, where—

(i) the purpose of the deduction or payment is the reimbursement of the employer in respect of—

(I) any overpayment of wages,

In relation to the instant complaint, I accept the Respondent’s evidence and find that the Complainant was paid commission in advance which he had not earned and was not entitled to when he received the payments. As he did not subsequently earn enough commission to offset these advance payments, he was overpaid.  

I find therefore that the Respondent was entitled to make the deductions they did for the purpose of recovering the overpayment, in accordance with section 5(5) of the legislation outlined above. This entitlement exists regardless of whether the Complainant had given his permission for the deduction to be made.

I find that the complaint is not well founded for the reasons set out above.