Complainant

Respondent

Parties

Alex  O'Donovan

Cork County Council

Complainant

Respondent

Anonymised Parties

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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-00061604-001

12/02/2024

This matter was heard by way of remote hearing pursuant to the Civil Law and Criminal Law (Miscellaneous Provisions) Act, 2020 and S.I. No. 359/2020 which designates the WRC as a body empowered to hold remote hearings.

The complainant and two witnesses for the respondent gave their evidence under affirmation.

The complainant submitted that when he finished his employment with the respondent, they retained the sum of €2153.98. He submitted that this was unlawfully deducted from his wages and that he did not give his prior written consent to the deduction.

In evidence the complainant stated that there was a change in the payment procedures of the respondent which amounted to a change over to a new form of capital to make it easier and more efficient for the respondent to do their job. He stated that this additional payment was not wages as it was not in relation to any additional work provided. He stated that any agreement made does not surpass the legislative requirements and that the deduction was unlawful.

The respondent submitted that it deducted the money from his wages in accordance with an agreement made with his union. The respondent submitted that there is a clause in the complainant's contract which provides for centralised negotiation for employment related matters with the unions.

The respondent submitted that the change over to the new payroll system was required by Central government and it engaged in negotiations with the unions to effect the change. It submitted that the payment of a transitional payment and its subsequent recoupment upon retirement or termination by either party of the employment was agreed with the unions on behalf of all staff. It submitted that accordingly that deduction was a lawful deduction and no breach of the ACT occurred.

A witness for the respondent, an SEO from the Human Resources section, outlined the steps taken in his evidence.

Section 5 of the Payment of Wages Act, 1991 states as follows:

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.

(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.

(3) (a) An employer shall not receive a payment from an employee in respect of a matter referred to in subsection (2) unless, if the payment were a deduction, it would comply with that subsection.

(b) Where an employer receives a payment in accordance with paragraph (a) he shall forthwith give a receipt for the payment to the employee.

(4) A term of a contract of employment or other agreement whereby goods or services are supplied to or provided for an employee by an employer in consideration of the making of a deduction by the employer from the wages of the employee or the making of a payment to the employer by the employee shall not be enforceable by the employer unless the supply or provision and the deduction or payment complies with subsection (2).

(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, or

(II) any overpayment in respect of expenses incurred by the employee in carrying out his employment,

made (for any reason) by the employer to the employee, and

(ii) the amount of the deduction or payment does not exceed the amount of the overpayment,

or

(b) a deduction made by an employer from the wages of an employee, or any payment received from an employee by an employer, in consequence of any disciplinary proceedings if those proceedings were held by virtue of a statutory provision, or

(c) a deduction made by an employer from the wages of an employee in pursuance of a requirement imposed on the employer by virtue of any statutory provision to deduct and pay to a public authority, being a Minister of the Government, the Revenue Commissioners or a local authority for the purposes of the Local Government Act 2001 (as amended by the Local Government Reform Act 2014), amounts determined by that authority as being due to it from the employee, if the deduction is made in accordance with the relevant determination of that authority, or

(d) a deduction made by an employer from the wages of an employee in pursuance of any arrangements—

(i) which are in accordance with a term of a contract made between the employer and the employee to whose inclusion in the contract the employee has given his prior consent in writing, or

(ii) to which the employee has otherwise given his prior consent in writing,

and under which the employer deducts and pays to a third person amounts, being amounts in relation to which he has received a notice in writing from that person stating that they are amounts due to him from the employee, if the deduction is made in accordance with the notice and the amount thereof is paid to the third person not later than the date on which it is required by the notice to be so paid, or

(e) a deduction made by an employer from the wages of an employee, or any payment received from an employee by his employer, where the employee has taken part in a strike or other industrial action and the deduction is made or the payment has been required by the employer on account of the employee’s having taken part in that strike or other industrial action, or

(f) a deduction made by an employer from the wages of an employee with his prior consent in writing, or any payment received from an employee by an employer, where the purpose of the deduction or payment is the satisfaction (whether wholly or in part) of an order of a court or tribunal requiring the payment of any amount by the employee to the employer, or

(g) a deduction made by an employer from the wages of an employee where the purpose of the deduction is the satisfaction (whether wholly or in part) of an order of a court or tribunal requiring the payment of any amount by the employer to the court or tribunal or a third party out of the wages of the employee.

(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.

The complainant suggested that the amount retained by his employer was unlawful in that he did not agree to it in writing before it was deducted. Furthermore, he suggested that the amount deducted was not wages as he did not have to do any additional work in respect of the amount. In response the employer outlined how the payment came about. It noted that the payment was made to all of its 2000+ employees in circumstances where they were changing over their salary payment method. It was noted that this was to ensure that nobody was left short.

The employer noted that the arrangements as regards this payment were concluded with the assistance of the unions and further noted that, in a clause in his contract. The respondent submitted a copy of the contract during the hearing.  The employer submitted that the deduction was 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.  The respondent noted that the right of representation was outlined in contract of employment and that this agreement to pay an amount of money, and subsequently recoup that payment was provided for in agreement with the unions. The relevant paragraph was cited in the submission handed in at the hearing:

Staff Representation

Cork County Council recognizes the Union – SIPTU (LAPO)/I.E.I./IMPACT as having sole negotiating rights for staff on your grade. Staff are bound by agreements made on their behalf through the industrial relations system.

The respondent submitted documentation showing that it had informed all staff as to the operation of this payment and included in the document was a clause dealing with recoupment of the payment prior to an employee finishing up with the respondent either by way of end of contract, retirement, resignation or career break. This was provided to the complainant well in advance of the end of his employment. The respondent submitted that this is compliant with the payment of wages legislation.  This was not denied by the complainant.

The respondent provided a signed copy of a contract of employment following the hearing. The respondent suggested that the deduction was authorised to be made by virtue of a term of the employees contract of employment which was included in the contract before, and in force at the time of, the deduction. Accordingly, the respondent is seeking to rely on the contract of employment and a specific clause contained within it.

In the circumstances where the complainant was aware of the need to make a transitional payment, and that the respondent provided transparency and a document outlining its proposed course of action in advance, I find that the respondent was entitled to deduct the sum of money advanced to its employee.  The deduction was authorised by virtue of a clause in the complainant’s contract. The respondent was permitted to negotiate an agreement with the respective unions as part of the contract of employment.

Accordingly I find the Payment of Wages Act 1991 was not contravened.

Having regard to all the written and oral evidence presented in relation to this matter, my decision is that the Act was not contravened.

Payment of Wages – deduction authorised by virtue of a clause in the complainant’s contract of employment.