PWD2463

PARTIES:

DIVISION:

SUBJECT:

Appeal of Adjudication Officer Decision No's: ADJ-00043509 (CA-00054428-001)

BACKGROUND:

This is an appeal of an Adjudication Officer’s Decision made pursuant to the Payment of Wages Act, 1991. The appeal was heard by the Labour Court on 17th October 2024 in accordance with Section 44 of the Workplace Relations Act, 2015.

The following is the Court's Decision:

DECISION:

This matter comes before the Court by way of an appeal by Zenoz Ltd (the Appellant) of the decision of an Adjudication Officer in a complaint made by Mckella Daly (the Complainant) under the Payment of Wages Act, 1991 (the Act).

The Adjudication Officer decided that the complaint was well founded.

Summary submission of the Complainant

The Complainant submitted that she applied for a job with the Appellant in October 2021 and was offered a ‘Non-Disclosure Agreement’ (NDA) and a temporary contract of employment on 9th November 2021 which she accepted. The temporary contract was sent to the Complainant via e-mail by the Appellant. That mail from the Appellant advised her that “I’m just going to do this here because I can’t seem to find the time to send proper letter headed document. But an e-mail will suffice until we get a proper contract in place”

The contract proffered on the 9th November specified the tasks which would be required of the Complainant and set out the terms of her employment which included details of a trial, daily updates showing what has been achieved on the day, details of a review of performance if projects were delayed, a rate of pay of €11 per hour and a bonus arrangement, details of a daily lunch break and a 15 minute paid break. The mail also confirmed that matters such as sick pay and holidays would be discussed.

The Appellant never received another contract of any sort from the Appellant nor entered into any other arrangement following her acceptance of the terms offered to her by e-mail on 9th November 2021.

The Complainant commenced employment on 12th November 2021 and worked remotely and was paid at the agreed rate of pay from November 13th to December 13th 2021. On 31st January 2022 she commenced working from the office of the Appellant rather than remotely and continued to do so until the termination of her employment on 21st December 2022.

The Complainant was required to provide an invoice to the Appellant in order to secure payment of wages due to her. She was not paid in respect of wages owing to her for September, October, November and December 2022 in the amount of €6,101.30. She submitted that the failure to make payment in respect of wages in this amount was a deduction within the meaning of the Act from the wages properly due to her during that period.

Summary submission of the Appellant

The Appellant submitted that the Complainant was not an employee of the Appellant within the meaning of the Act at any material time.

She had identified herself in her original complaint form as a ‘freelance product designer for the Appellant from 12th November 2021 to 21st December 2022. She was a self-employed worker and her engagement with the Appellant was that of a contract for services. The Appellant held no sufficient control over the Complainant in how she carried out her work; when she carried out her work; or how long it took her to carry out that work. She was free to carry out work for other customers of hers during that period. She was not open to discipline nor was she paid for annual leave or public holidays.

The Appellant relied upon Revenue Commissioners v Karshan (Midlands) Ltd t/a Dominos Pizza [2023] IESC 24 to assert:

• There was no exchange of wage, but a contract was in place involving the exchange of remuneration for work done.
• She was providing her own services and not that of a third party, albeit as a freelance worker she was not restricted in having third parties carry out her work.
• The Appellant exercised limited control over the Complainant and any such control was limited in that it occurred only when the Complainant agreed to carry out work and in no other circumstance.
  
  

Summary of testimony on behalf of the Appellant.

Mr Oz Ibrahimi, managing Director of the Appellant gave evidence that the Complainant was not engaged as an employee within the meaning of the Act. The witness stated that a contract as set out by the Complainant was given to her on the 9th November 2021 and that she commenced working on 12th November. He said that a different arrangement was put to the Complainant at the end of November 2021 wherein the Complainant’s arrangements were those of a freelance self-employed worker engaged on a contract for service. He stated that the Complainant accepted these terms.

The Witness, when asked by the Court to clarify whether this evidence under oath supported the proposition that the Complainant commenced her engagement on 12th November 2021 under the terms as set out to her on 9th November 2021 by the Appellant, clarified that in fact the new set of arrangements were put to the Complainant some short time after 12th November 2021 and not as earlier attested to at the end of November. He said that these new arrangements were conveyed to the Complainant by phone rather than by e-mail, hard copy or text message. He stated that these new terms were never reduced to writing.

When asked by the Court to clarify whether the evidence which he was now giving had the meaning that the terms of employment upon which the engagement of the Complainant commenced on 12th November 2021,were those set out to her by e-mail on 9th November 2021, the witness again corrected his evidence to say that in fact the new arrangements were given to her by ‘phone on the 10th or 11th November 2021 and not some time after 12th November as earlier attested to, and she then commenced her engagement on the new terms on the 12th November.

The witness stated that the complainant initially worked remotely until January 2022, and that she thereafter worked from the company premises. He confirmed that he provided her with work thereafter and engaged with her daily, or almost daily, including as regards progress on the work assigned to her. He stated that whereas he did provide work to her in this manner from September 2022 to December 2022 he never checked on her progress in relation to that work over those months, and that she did not produce any output from the work assigned to her. He stated that, although the work was due to be delivered to the client in early 2023, he never checked on progress, albeit he did meet the Complainant on the company premises almost every day and engaged with her constantly across the period.

He confirmed that the Complainant was paid on the basis of invoices submitted by her every month until September 2022, and that those invoices included invoices for hours worked and, in the case of some invoices, included holiday periods where no work was carried out. He stated that it was not noticed by the Appellant that the invoices included payment for holidays. The invoices were paid on the basis of the hourly rate set out to the Complainant on 9th November 2021 and her hours of work were fully recorded on those invoices.

The Law

The Act at Section 5(1) provides as follows:

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.

Section 5(6) of the Act provides:

(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.

Discussion and conclusions

The High Court in Marek Balans v Tesco Ireland Limited [2020] IEHC 55, made clear that this Court, when considering a complaint under the Act, must first establish the wages which were properly payable to the employee on the occasion before considering whether a deduction had been made. If it is established that a deduction within the meaning of the Act had been made from the wages properly payable on the occasion, the Court would then consider whether that deduction was lawful.

In the appeal before the Court there is no dispute that the Appellant made no payment to the Complainant for the period from September 2022 to December 2022. There is no dispute that the Complainant attended the Appellant’s premises each working day in that period and was assigned work by the Appellant throughout the period. Similarly, it is not disputed that the Appellant did provide the Complainant with the basic terms of her employment on 9th November 2021 which included details of a trial, daily updates showing what has been achieved on the day, details of a review of performance if projects were delayed, a rate of pay of €11 per hour and a bonus arrangement, details of a daily lunch break and a 15 minute paid break. The mail also confirmed that matters such as sick pay and holidays would be discussed at a later date. It did not appear to be in dispute that, as of the 9th November 2021, the intention of both parties was that the Complainant would be employed by the Appellant under a contract of service.

The Appellant contends, including in testimony, that these arrangements were set aside by a subsequent arrangement which was not reduced to writing. The Appellant’s witness, under oath, contended initially that this change of arrangement occurred in a ‘phone call at the end of November 2021. It was then contended that, in fact, the change occurred shortly after the commencement of engagement of the Complainant on 12th November 2021, and finally it was contended that in fact this change of arrangement occurred either on 10th November or 11th November 2021. The Complainant submitted that no new arrangement was ever put to her after 9th November 2021, albeit the Appellant insisted that she would invoice the Appellant each month in order to be paid her wages.

The Court is not persuaded by the submission and evidence of the Appellant as regards the institution of an arrangement different to that set out to the Complainant on 9th November 2021 or that any such arrangement was set out to the Complainant prior to or since the commencement of her engagement on 12th November 2021 by the Appellant.

It is clear that the Complainant was remunerated for her work each month on the basis of invoices which were submitted by her, and which contained the details of hours worked and holidays taken with all calculations based on the hourly rate of pay set out to her on 9th November 2021. It is not possible, against that background, to conclude that the Complainant was engaged on anything other than a contract of service on the summary terms of employment set out to her on 9th November 2021.

In all of the circumstances, the Court concludes that wages in the amount of €6,101.30 is the amount of wages properly payable to her in respect of September, October, November and December 2022.

It is not disputed that the amount of wages paid to the Complainant in respect of this period was nil.

It is therefore clear that a deduction within the meaning of Act was made from the wages properly payable to her on the occasion.

No submission has been made to the Court that the deduction was required by statute. Neither has the Appellant pointed to any provision of the contract of employment of the Complainant or to any agreement with the Complainant which authorised the deduction.

The Court concludes that the deduction of €6,101.30 from the wages of the Complainant on the occasion was unlawful and that the within complaint is well founded.

Decision

For the reasons set out above, the Court decides that the within complaint is well founded and orders the Appellant to pay compensation to the Complainant in the amount of €6,101.30, being the amount which the Court considers reasonable in the circumstances.

The decision of the Adjudication Officer is affirmed

The Court so decides.

	Signed on behalf of the Labour Court
	Kevin Foley
CC	______________________
18th November 2024	Chairman

NOTE

Enquiries concerning this Decision should be addressed to Ceola Cronin, Court Secretary.