Complainant

Respondent

Parties

Charles Cleary

Dense Air Ireland Limited

Representatives

Self-represented

Did not attend the hearing

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-00065603-001

26/08/2024

The respondent was engaged in telecommunications services and was licensed by Comreg to provide mobile technology services across networks in Ireland.  The complainant commenced employment on September 20th 2021 as a senior radio access network (RAN) manager.  Clause 6 of his contract of employment shows that his annual salary was €90,000 and that he was entitled to a bonus of 5% of base salary “payable upon completion of specific objectives as defined by your manager.”

The complainant’s first complaint is that he was not paid his contractual bonus of 5% although he achieved his objectives every year.

In his evidence, the complainant said that, in April 2022, the respondent was acquired by a Google subsidiary called Sidewalk Investment Partners (SIP).  In March 2024, the respondent’s employees were informed that SIP decided that the company would cease trading and the licence was relinquished to Comreg.  All the employees were made redundant in August 2024.  The complainant provided a letter in evidence which shows that his last day of employment was August 31st 2024 and that he received a statutory redundancy payment.

At the hearing, the complainant provided a copy of a letter he received in May 2022 which indicated that the board of directors agreed to pay a company-wide short-term incentive (STI) bonus of 15% of base pay to employees for 2022.  Correspondence he provided at the hearing show that he received this 15% bonus for 2022 on January 20th 2023.  On February 20th 2024, he received a bonus of 20%.  His second complaint is that, having worked for eight months in 2024, he did not receive this STI bonus at the time he was made redundant on August 31st.

The Relevant Law

This complaint was submitted under the Payment of Wages Act 1991 (“the Act.”)  Section 1 of the Act sets out 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.”

It is apparent therefore, that a bonus is included in the definition of “wages” and the failure to pay a bonus may be considered to a breach of section 5(6) of the Act:

“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 therefore 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 deductions as aforesaid) are paid to the employee,

then, except insofar 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 that occasion.”

Complaint about the 5% Contractual Bonus

It is the complainant’s case that he had a contractual entitlement to a bonus of 5% of his base salary, on condition that he met his objectives every year.  Clause 6.3 of his contract makes no reference to the date on which the 5% bonus will be paid and it is not conditional on being in employment or not on notice of termination on the date of the payout.

The complainant said that his manager was always satisfied that he achieved his targets and he claims that he is entitled to 5% of his salary for work done in 2022, 2023 and 2024.  At the hearing, I explained that, in accordance with s.41(6) of the Workplace Relations Act 2015, I have authority to consider a complaint that relates to a breach of the Payment of Wages Act occurring in the six months before this complaint was submitted to the WRC.  As this complaint was submitted on August 26th 2024, the reckonable timeframe for which I can consider a complaint regarding the non-payment of the bonus is from February 27th until August 26th 2024.

I note from the documents submitted by the complainant that his STI bonuses were paid out on January 20th 2023, in relation to work done from January to December 2022, and on February 20th 2024, in relation to work done from January to December 2023.  It is apparent therefore, that bonuses were paid between January 20th and February 20th each year.  The complainant submitted this complaint to the WRC on August 26th 2024 and the earliest date for which I have authority to consider a breach of the Payment of Wages Act is February 27th 2024.  Based on the respondent’s policy of paying bonuses at the latest, on February 20th in any year, I must conclude that I have no jurisdiction to adjudicate on this complaint because it has been submitted outside the statutory time limit.

Complaint about the Short-term Incentive Bonus

Details of the 15% STI bonus introduced in May 2022 were set out in a letter to the complainant dated simply “May 2022.”  The purpose of the bonus is said to be to “attract, retain and motivate outstanding performers who contribute personally to Dense Air’s success while operating with a company-first mentality.”  The final paragraph of this letter states as follows:

“You will be ineligible for a bonus payment if your employment terminates for any reason, or you are under notice of termination (whether given by you or the company) prior to the date when it is payable.  Full details of the scheme can be found in the attached scheme rules.”

Although the complainant could not provide a copy of the scheme rules, it is clear from this paragraph that it is a condition of the payment of the bonus that an employee is in employment on the date that the bonus is paid out.  The complainant said that, if he had continued in employment, the bonus would have been paid in May 2025.  As he was made redundant on August 31st 2024, he expected that, having met all the objectives he was set, he would have received a bonus based on the proportion of the year that he worked up to that date.

The circumstances in which the complainant found himself were similar to the circumstances of Mr Niall Thomas which were considered by the Labour Court in his complaint against Bord Gáis Energy Limited in 2017[1].  Mr Thomas left his job with Bord Gáis on January 6th 2017.  If he had remained in employment, he was due to be paid a bonus in February 2017, contingent on certain performance criteria.  Finding that he was not entitled to the bonus, the Labour Court Chairman, Ms O’Donnell said,

“…the Courtplaced considerable weight on the fact that the complainant’s contract sets out the eligibility requirements for payment of the PRA (performance-related allowance) and that the Complainant confirmed in evidence that he was aware that one of the criteria of the scheme required that he be in employment on the date of payment.”

While the details of the complainant’s bonus are not included in his contract of employment, it is my view that the letter issued in May 2022 makes it clear that the bonus is conditional on an employee being in employment on the date that the bonus is due for payment.  Based on the fact that he received this bonus on January 20th 2023 and February 20th 2024, it is apparent that, if the company had continued trading, and, if he had achieved his objectives, the complainant would have received the bonus before February 20th 2025 at the latest.

While I have some sympathy for the predicament in which the complainant found himself, I am required to adjudicate on this complaint under the provisions of the Payment of Wages Act.  I find that, in failing to pay the bonus to the complainant when he was made redundant on August 31st 2024, the respondent did not make an illegal deduction from his wages and, contrary to s.5(6)(b) of the Act, the bonus was not properly payable.

For the reasons I have set out above, I decide that both components of this complaint are not well founded.

Statutory time limit, wages properly payable, bonus