Complainant

Respondent

Parties

Jessica Davis

St. Vincent’s Private Hospital

Representatives

Eoghan Ryan, Forsa

Adrian Norton, IBEC

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-00057044-001

09/06/2023

The complainant started working as a clerical officer in the hospital on January 1st 2021.  She commenced at grade III of the clerical officer scale, on a salary of €27,115.  In June 2022, she was moved to the next point on the grade III scale, €27,924.  She resigned and left her job on August 5th 2022.

In December 2022, arising from the “Building Momentum” public service pay agreement, staff in the hospital received an increase of 3%.  In March 2023, the hospital decided to pay retrospection of this 3%, with effect from February 2nd 2022.

It is the complainant’s case that the hospital’s failure to pay her the increase from February until the date of her termination in August 2022 is an illegal deduction from her wages.  On her behalf, Mr Ryan argues that, if the increase had been paid when it became due, the complainant would have been in receipt of higher wages for the last five months of her employment.  She claims an entitlement to unpaid wages of €498.64.

The hospital argues that, as this complaint was submitted to the WRC on June 9th 2023, it is outside the time limit set out at s.41(6) of the Workplace Relations Act. 

Before moving to consider the complainant’s case regarding her wages, I must consider if her complaint has been submitted on time.

Chronology Leading to the Retrospective Payment

During 2022, the government and public sector unions agreed an extension to the Building Momentum pay agreement which ran from January 2021 until December 2022.  This provided for an additional increase of 3% of salaries back-dated from February 2nd 2022 and further increases in March and October 2023.  The March and October 2023 increases are not material to the complainant’s case.

The complainant left her job in the hospital on August 5th 2022, to take up a role elsewhere.

On November 24th 2022, the chief executive of the hospital wrote to all staff to inform them that the increases would be paid:

“On behalf of the Board, I am pleased to inform you that the increased rates of pay (in line with HSE rates) will be paid with effect from December 1st 2022.  All staff who are on the ‘live’ payroll on that date will be eligible for payment of the higher rates.”

In his email, the CEO said that payment of the retrospection back to February 2nd 2022 would be paid “when the financial position of the Hospital allows.”

On March 10th 2023, the CEO wrote again to all staff to inform them that the amount due in retrospection from February 2nd 2022 would be paid.  This was included in salaries on March 30th 2023.  In March or April, the complainant wrote to the HR Department about the retrospective payments, but the hospital did not agree to pay her the amount of €498.64 which she claims is due to her. 

On June 9th 2023, the complainant submitted this complaint to the WRC for adjudication under the Payment of Wages Act.  The position of the hospital is that this is 10 months after the complainant left her employment and it is therefore, outside the time limit at s.41(6) of the Workplace Relations Act 2015.  Mr Norton also argued that the relevant date is December 1st 2022, when the increase became effective.  If I agree with the hospital that this later date is the relevant date, then the complaint is still outside the six-month time limit.  On behalf of the complainant, Mr Ryan made no application for an extension of the time limit.

Findings

Section 1 of the Payment of Wages Act 1991, under the heading “Interpretation,” defines an employee as,

…a person who has entered into or works under (or, where the employment has ceased, entered into or worked under) a contract of employment and references, in relation to an employer, to an employee shall be construed as references to an employee employed by that employer[.]”

It is clear from this that the protection of the Act is extended to include a person whose employment has ceased, and it follows therefore, that the complainant, who was not an employee of the hospital when she submitted her complaint, is entitled to have a complaint investigated regarding non-payment of wages for a period during which she was an employee.  The issue for consideration is, has she submitted her complaint within the six-month time limit?

Since 2015, the time limit for submitting a complaint under the Payment of Wages Act is set out at s.41(6) of the Workplace Relations Act:

(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.

I agree with Mr Ryan, who argued on behalf of the complainant, that she could not have submitted her complaint until after she was informed that the hospital was about to pay a sum in back-dated pay to all employees.  It is my view that the date of the alleged contravention is either March 10th 2023, when the CEO informed the employees of the hospital that it was the intention of the board to pay the retrospection, or, March 30th 2023, when the back-dated amount was paid out.  I do not accept Mr Norton’s argument that, as an alternative to August 5th 2022, the complainant’s date of resignation, December 1st 2022 is the relevant date.  On December 1st, the only indication from the management was that retrospection would be paid “in 2023 when the financial position of the Hospital allows.”  The complainant had no entitlement to a pay increase on December 1st 2022, when all salaries were uplifted by 3%.  Her argument is that she is entitled to a pay increase from February 2nd until August 5th 2022, when she was still an employee.

Conclusion on the Issue of the Time Limit

Section 1 of the Payment of Wages Act provides that a former employee may be considered to be an “employee” for the purpose of the Act.  It is my view that the earliest that the complainant could have known that a retrospective payment would be paid was March 10th 2023, when the CEO wrote to inform employees that the board of directors had decided to pay a retrospective increase.  It is my view that March 10th or March 30th 2023 are the dates of the alleged contravention.  As she submitted her complaint to the WRC on June 9th 2023, it is “within the period of 6 months beginning on the date of the contravention to which the complaint relates” and I am satisfied therefore, that I have jurisdiction to proceed with my enquiries.

The Relevant Law

This complaint has been submitted under the Payment of Wages Act 1991 (“the Act.”).  Section 1 of the Act provides a definition of wages:

[W]ages 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, and,

(b)  any sum payable to the employee upon the termination by the employer of his contract without his having given to the employee the appropriate prior notice of the termination, being a sum paid in lieu of the giving of such notice.

Section 5(6) addresses the circumstances in which wages which are properly payable are not paid:

(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.

From this, we understand that, where wages are properly payable, the failure of an employer to pay such wages is an illegal deduction.  The issue for consideration in respect of the complainant is, having resigned from her job in August 2022, was she entitled to wages, or, in accordance with s.5(6) above, were wages properly payable to her in March 2023?

Findings

When she was employed by the hospital between January 2021 and August 2022, the complainant was paid the wages to which she was entitled.  For the duration of her employment, the “Building Momentum” pay agreement was in force for public sector workers (from January 1st 2021 until December 31st 2022), and this was followed by the hospital, although it is not in the public sector.   On October 7th 2022, the government reached an agreement with the public service unions regarding an extension to the “Building Momentum” agreement.  This provided for a 3% pay increase back-dated to February 2nd 2022 plus further increases in 2023.  Having applied the increase to wages in December 2022, the management decided to implement the retrospective element from March 2023.  The question I must consider is, as she finished working for the hospital in August 2022, was the 3% retrospective payment “properly payable” to the complainant in March 2023?

It is my view that, as the extension to the “Building Amendment” pay deal was concluded in October 2022, the complainant’s terms and conditions are not encompassed by the provisions of that Agreement.  I have reached this conclusion because the complainant severed her relationship with her employer when she resigned on August 5th 2022.

The hospital was not a party to the negotiations on the extended pay deal and, prior to her resignation, there was no commitment to the complainant that she would be paid any retrospection that might arise from a decision to pay employees an increase after she left.

The provision in the Building Momentum agreement to pay an amount in retrospection, and the decision of the hospital board to follow the terms of the agreement and to pay retrospection to its employees was not provided for in the complainant’s contract of employment, and, for the duration of her employment, she was on the correct rate of pay.  The fact that the pay of her colleagues was enhanced after she resigned is not an argument for applying the increase to her wages.

I can find no precedent to establish that a former employee is entitled to a pay increase awarded to employees in their workplace after their departure and it seems to me that such a policy doesn’t make sense from a commercial perspective.  In simple terms, outside some legal provision, there is no return for an employer on paying wages to a former employee. 

In conclusion, I find that the pay increase of 3% applied to wages of employees in the hospital in December 2022 was not properly payable to the complainant.  I find further that the retrospective amount paid in March 2023, effective from February to November 2022, was also not properly payable to the complainant.

Based on the conclusions set out above, I decide that this complaint is not well founded.

Wages properly payable, retrospective pay increase