Complainant

Respondent

Parties

Horacio  Castro

Ospg Limited

Complainant

Respondent

Anonymised Parties

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Representatives

  Self -Represented

 Self -Represented

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-00062442-001

27/03/2024

The Complainant submitted a claim under the Payment of Wages Act on 27th of March 2024.   The complainant was employed as a Pharmacy Technician and later as a Pharmacist by the Respondent from 6th of March 2023 until he  resigned from his position on 28th of November 2023.   The complainant alleges that the recovery by the respondent of a recruitment agency fee from his wages following his resignation amounts to an illegal deduction under the Act.

The Complainant submits that he was employed by the Respondent initially as a Pharmacy Technician and then as Pharmacist.  He commenced his employment on 6th of March 2023  and  resigned from his position on 28th of November 2023.

The complainant submits that his reason for resigning was due to the fact that his hours of work had been reduced and he was no longer getting enough hours of work with the respondent. 

He submits that his contract was for 3 days per week but that the respondent at the interview had assured him that he would get up to 5 days per week.

The complainant stated that he initially worked 5 days per week for 6 months but once his hours reduced to 3 or 2 days a week he had to resign as he needed a full-time job.

He submits that an amount of  €5,230.04 was withheld from his final wage payments in February 2024 and that this amounts to an illegal deduction.

The Respondent does not deny the deduction but submits that it was lawful deduction within the terms of the complainant’s contract of employment.

The respondent submits that the relevant provision is at Clause 7 of the contract which states

“if the company incurs an agency fee for your recruitment and you are let go within two years from the commencement of this contract then the company reserves the right, proportionally to the duration of your employment, to recoup this fee from your final salary”.

The Respondent contends that, as the complainant resigned with the first 2 years of employment, it is entitled to recoup its investment from him.

The respondent submits that it had not sought to recover the full amount of the recruitment fee but that it only sought to recover the amount proportionate to the time the complainant had left until the end of the 2-year period specified in the contract.

The Respondent submits that the Complainant was aware that he owed them the reimbursement for the fee they paid to a recruitment agency for their services when they hired the Complainant. They claim the amount paid to the recruitment agency was €10,073.

Section 5 of the Payment of Wages Act 1991  provides that:

5.—(1) An employer shall not make a deduction from the wages of an employee (or receive any payment from an employee) unless—

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

(a)  an 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 authorized 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, the employee has been furnished, at le

(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

(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,

(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 could 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. “

The complainant, a Portuguese National, advised the hearing that he was recruited from Portugal moved to Ireland for the job with the respondent.  The complainant advised the hearing that he had wanted a full-time job and that he had specified this in his interview during which he was told by the owner of the group that although the contract was only for 17hr per week in Ennis, they would always have shifts available between the stores in Limerick and Ennis and so the complainant would get up to 5 days work per week.   The complainant told the hearing that this was true for a few months and up until October 2023 he usually worked 5 days a week.    He stated that after that he was only rostered for 4 days a week in October 2023.

The complainant told the hearing that he raised this issue with the respondent but was told there weren't any other shifts available in Limerick or Ennis but that there were extra shifts in Cork.  The complainant said this was not suitable as it was too far to travel to work, but he acknowledged that the respondent had said they would cover his travel expenses.

The complainant stated that he asked the owner if he could locum in other local pharmacies to make up for his reduction in hours and he was given authorization to do so, but he stated that as he would only get the roster for the following week on Fridays, this didn’t give him enough time to book locums in advance.  

The complainant advised the hearing that he continued to work but in November the situation got worse, and he had some weeks with only three days working and finally only 2 days per week.   The complainant stated that it was when his rostered hours were reduced to two days a week that he decided he would have to leave and get a different job as he could not survive only working two or three days a week.

The complainant stated that he had to quit the job, as he needed a full-time job, and he was only getting part-time hours.  The complainant stated that he  handed in his resignation letter on the 28th of November 2023 with 3-months’ notice. 

Following his resignation the respondent contacted the complainant by e-mail saying that his contract had a clause that stated: "If the company incurs an agency fee for your recruitment and you hand in your notice or are let go within two years from the commencement of this contract then then company reserves the right, proportionally to your duration of employment, to recoup this fee from your final salary. Normal Retirement age is when you reach your 65th birthday on which date this contract automatically expires."

The complainant was advised that the recruitment fee the company had paid was roughly €10,073.

The respondent also sent him the math calculations and told him that he was liable to pay this to the company as he had left before the end of the 2-year period and so would have to repay them €5,230, which was the amount of the recruitment fee proportional to the time he had left to work out of the 2-year period.

In the following weeks a number of email exchanges took place and by end of February 2024, the complainant states that he realized he wasn't being paid any wages even though he was receiving the payslips, but the respondent was keeping the money .

The complainant advised the hearing that after 2 weeks without being paid he received an e-mail on the 13th of February 2024 from the company with his roster which included the calculations and stated that the recruitment fee was being deducted out of his working hours and holidays.

The complainant at the hearing stated that since his resignation he had sought advice from a free solicitor who told him that the clause in his contract outlining the recruitment fee was a  penalty clause and was not legal.  The complainant argued that given the recruitment fee paid was exceptionally high and above the norm, the company should have brought it to his attention prior to signing the contract and, by not doing so, the clause becomes unjust and unfair.

The complainant also stated that the contract did not specify the amount of the recruitment fee or that his employment had in fact attracted such a fee.

The Respondent argued that the complainant was aware that the Recruitment Fee would be repayable in the event of him leaving before the end of the 2-year period.  The respondent in its assertion relies on the contractual clause which states : "If the company incurs an agency fee for your recruitment and you hand in your notice or are let go within two years from the commencement of this contract then then company reserves the right, proportionally to your duration of employment, to recoup this fee from your final salary”.

In examining this clause,  I note that it states, ‘IF the company incurs an agency fee…’, it does not state definitively that an agency fee was incurred in employing the complainant and also does not provide details of the amount of such fee.   I also note that  the complainant in this case is a Portuguese national.   I note that no evidence was adduced by the respondent to suggest that any further clarification was provided to the complainant at the time of his recruitment and neither the amount of the recruitment fee or the fact that a recruitment fee had actually been incurred in this instance was discussed or disclosed.

I find that the vagueness of the reference to this in the contract weakens the respondent’s case and that it is not reasonable for the respondent to deem that the complainant’s contract clearly sets out that he will be required to reimburse a recruitment fee of €10,073 if he resigned before the end of a 2-year period.

In considering this matter, I also note that the complainant’s reason for resigning was due to a reduction in his rostered hours whereby he found himself reduced to working a two-day week when he had for the previous 6 months been working 5 days a week.  I note that the respondent did not deny that there was a reduction in the complainant’s weekly hours or provide any substantive explanation for the reduction in his hours but instead relied on the fact that his contract only guaranteed him 17 hours per week.

I also note that the complainant at the hearing stated that he had advised the respondent at the outset during the interview that he needed a full-time job and that he was told that he would receive up to 5 days a week between the respondents Limerick and Ennis shops.

I found the complainants evidence to be credible and consistent in this regard. 

The complainant advised the hearing that he had been working 5 days a week up to October 2023 and that he would not have resigned only that his hours were reduced to 3 days and then 2 days and he could not survive working only 2 days a week.

The respondent in reply to the assertion that the complainant’s hours were reduced stated that he had signed a contract for 17 plus hours and this was all he was guaranteed.  The respondent stated that they gave him additional hours whenever they could and had offered him extra hours in the Cork branch as well as offering to pay his travel expenses for this.   The respondent stated that the complainant asked if he could work as a locum in other pharmacies and was allowed to do this.

The respondent stated that according to the contract of employment it was entitled to recoup the full amount of the recruitment costs but that it had only sought to recoup the amount proportionate to the time left in the 2year period which would not be worked by the complainant . 

In this regard I note that the contract only makes reference to recouping a proportion of any agency fees ifincurred.

The respondent stated that the complainant signed the contract which contained the relevant clause.  The respondent advised the hearing that the complainant in email correspondence post his resignation acknowledged that he was aware that he had to repay the recruitment fee given the circumstances.  The complainant at the hearing disputed this and stated that his email merely acknowledged that he had signed the contract.

The respondent in reply to the complainant’s assertion that he was not aware of the amount of the fee stated that following the complainant’s resignation they had tried to engage with the complainant before making the deduction, but the complainant refused to engage and ignored their attempts to contact him.  The complainant stated that he was at this time awaiting advice from the free solicitor for about 2 weeks and so he did not reply to the respondent’s emails during that time as he was awaiting advice.    

The respondent added that it had invested a lot in recruiting and training the complainant only to have him leave before the end of the 2-year period.   

I appreciate that the respondent incurred financial cost in recruiting and training the complainant who resigned shortly afterwards.   However, I am not satisfied that the complainant was aware of this as the clause in his contract was not specific or detailed and did not state that such costs had been incurred in relation to his employment and did not specify an amount.

While I note that the WRC has on occasion previously enforced clauses which require an employee to reimburse reasonable costs incurred by their employer where an employee leaves their employment within a period of time following their recruitment,  I note that this case differs from others in that the amount of the fees to be reimbursed or indeed the fact that such fees were actually incurred was not clearly specified in the contract signed by the complainant.

In examining this matter, I am mindful of the case of Homebond Technical Services Limited -v- Mr David Faulkner PW/21/61 ADJ-00030850 wherein the Labour Court upheld the employee’s complaint in relation to an unlawful deduction of wages where wages were withheld from the employee as a reimbursement to the employer for the expense of course fees.

While the facts of that case centre around the applicability of a term in an employee handbook which was operative after the employee signed up to the course, the Court held that the “respondents relied on provisions in a handbook and in a contract , neither of which were specific enough to enable them to act as they did. As a result, the complainant never agreed to the deductions concerned, had no way of knowing that the deductions would be made and entered into commitments without being in full possession of the facts.”

The comments made by the Court in that case could easily be applied to the Complainant’s claim in this matter i.e. the contractual clause is not specific enough to be relied upon and the Complainant was not in receipt of the specific and relevant facts at the time he entered into the contract with the Respondent.

I am thus satisfied that the insertion of such a vague and unspecific clause is not sufficient to support an assertion that the complainant in this case was notified that a recruitment fee of c. €10,073 was incurred in connection with his employment and could be recouped in the event of his leaving before the end of a 2-year period.

I also note that the complainant in this case resigned due to a reduction in his hours of work which the respondent does not deny.  

Having given great consideration to the specific circumstances of this case I am satisfied that the deduction of €5,230.04 amounts to an unlawful deduction under the Payment of Wages Act and I find in favour of the complainant  in respect of this matter.

Accordingly, I declare this claim to be well founded, and I order the respondent to pay the amount of €5,230.04 to the complainant.

For the sake of completeness and while I note that the complainant’s stated reason for leaving was due to him not receiving enough hours, I note that no claim of constructive dismissal has been advanced.

Having considered the combined effect of all of the above I find the complaint to be well founded. Accordingly, I direct the respondent to pay the complainant €5,230.04.