Complainant

Respondent

Anonymised Parties

Complainant

Respondent

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-00060953-001

11/01/2024

This matter came before the Workplace Relations Commission dated 11/01/2024.  The Complainant alleges contravention by the Respondent of provisions of the above listed statute in relation to her employment with the Respondent.  The date of the alleged deduction is 22/12/2023.  The aforesaid complaint was referred to me for investigation.  A hearing for that purpose was scheduled to take place on 29/08/2024. 

The Complainant commenced employment with the Respondent as a Sales Representative on 09/10/2023 and she worked a 40 hour week for which she was paid €770.75 gross per week.  The Complainant’s employment terminated by way of dismissal on 15/12/2023.  The Respondent is an office equipment supplier. 

Both parties provided helpful written submissions in advance of hearing for which I am grateful. 

The case concerns the non-payment of a Christmas bonus of €500.  The Respondent disputes the claim advanced and submits that as the Complainant was still on probation she was entitled to receive €250 in what the Respondent submits is a discretionary bonus in any event.

CA-00060953-001

The Complainant submits on the 16th of September 2023 she received a message on LinkedIn from the Respondent regarding a potential job offer at [redacted].  The Complainant submits they arranged to have a phone call on the 18th of September which led to an invitation for an in-person interview. This took place on the 26th of September 2023. 

During this interview a Christmas bonus of €500 was discussed and was later outlined in an email which contained her job offer also on the 26th of September 2023. 

The Complainant submits that on the 14th of December, a member of staff notified her that some of her colleagues had already received their Christmas bonus.   The Complainant submits she messaged the Respondent enquiring about the €500 Christmas bonus and when she could expect to receive it.

The Complainant submits the Respondent told her that she would be receiving a Christmas bonus of €250 as opposed to the €500 outlined in her job offer.   The Complainant submits she proceeded to question this, and the Respondent apologised for the confusion and offered to check.

The Complainant submits that on the morning of the 15th of December 2023 she received a follow up email from the Respondent stating that the Christmas bonus is half of the amount when on probation and that he should have clarified this in the job offer.

The Complainant submitted she responded to this, saying that she didn’t feel that this was fair as she was never made aware of this, and the Christmas bonus was one of the main attractions presented to her in the job offer when she was approached about the role. 

CA-00060953-001

The Respondent submits that in his original job offer he mentioned that they offer a Christmas bonus of €500 to staff.   In December when the Complainant asked about the bonus the Respondent submits he explained that because she was still on probation the bonus was €250 One4all, but in 2024 it would be €500 One4all.  The Respondent submits he appreciates he did not explain this in his job offer, but he submits he also feels that the Christmas bonus is discretionary. The Respondent submits the bonus does not appear in the employee contracts.

CA-00060953-001 complaint under section 6 of the Payment of Wages Act, 1991

The Relevant Law

The Law:

The Payment of Wages Act 1991 as amended (the “PWA”) regulates deductions to an employee’s wages and prohibits unlawful deductions.

Under the PWA, “wages” are defined as:

"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”.

It is well established that the payment of a bonus falls under the definition of wages as defined by the PWA. 

Section 5 of the PWA deals with the regulation of certain deductions made by employers.

Section 5(6)(b) of the PWA states that failure to pay amounts due on the occasion when due “…shall be treated as a deduction made by the employer from the wages of the employee on the occasion.”

In the case of Marek Balans v. Tesco Ireland Limited [2020] IEHC 55 the High Court made it clear that the WRC, when considering a complaint under the 1991 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, the WRC would then consider if that deduction was lawful.      

Therefore, the question to be decided is whether the wages claimed by the Complainant were properly payable. 

As regards discretionary bonus payments, in Cleary & Others v. B&Q Ireland Limited [2016] IEHC 119, McDermott J accepted that while an employer has a wide discretion under the terms of the contract and scheme, it must act reasonably.  Moreover, he found that “[t]he discretion to withdraw the bonus scheme at any time, in my view, was always intended to apply in futuro and attached to the conferring of bonuses, as yet un-accrued, under the terms of the scheme.”

The interpretation of this decision is that once a bonus has been earned it cannot be revoked. However, it’s important to note that this is in the context of a written contractual obligation.  In this case, the employees had been provided with written details of the bonus calculation and the bonus scheme eligibility criteria. Moreover, the bonus was not contingent upon the profitability of the company or the satisfactory performance of the employee.

The Relevant Facts

The facts in the within case relate to a discretionary bonus at Christmas.  I note there is no annual bonus policy that sets out any conditions for an employee to be eligible to receive the annual Christmas bonus. 

I note details including eligibility criteria and any restrictions thereto are not set out in the Employee Handbook or in the contract of employment as confirmed by the Respondent at hearing further to my inquiry. 

I note it is a bonus comprising of a One4all voucher as the Respondent has availed of the tax efficiencies made available by Revenue by way of the small benefit exemption.  I note the Complainant expected the €500 by way of a cash bonus. 

Notwithstanding, I accept the €500 Christmas bonus was discussed at interview and it was clearly set out in the letter of offer from the Respondent to the Complainant of 26 September 2023 in the following terms:

“It was lovely to meet you in person today, thanks for calling over to us. 

On the basis of our discussions we’d like to offer you a position as TELESALES AGENT as we feel you’d be a great fit for the business. As discussed, this is our first time to formally hire for a telesales role so the role will evolve over the months ahead but I’ve detailed below the job description that we feel will give us the best chances of success!

1.      Base Salary €35K

2.      Monthly targets with bonus & commission

3.      Christmas Bonus €500

4.      Stocked kitchen for breakfast & lunch”

It is common case the Complainant did not receive the Christmas bonus by way of either a €250 or a €500 denomination voucher.  I note the Complainant submitted at hearing the €500 Christmas bonus was one of the main reasons she took the job.    

I note the Respondent submitted at hearing the bonus is discretionary upon which he placed emphasis more than once. 

I am mindful of Lord Denning in Amalgamated Investment & Property & Co Ltd v. Texas Commerce Investment Bank Ltd [1982] QB 84, 122 where he held as follows: 

“When the parties to a transaction proceed on the basis that an underlying assumption  - either of fact or law – and whether due to misrepresentation or mistake makes no difference – on which they have conducted the dealings between them – neither of them will be allowed to go back on that assumption when it would be unfair or unjust to allow him to do so.  If one of them does seek to go back on it, the courts will give the other such remedy as the equity of the case demands.”

I am satisfied the payment of the €500 Christmas bonus as represented to the Complainant by the Respondent at interview and in her job offer letter was an integral part of the agreement between the parties.  I find that it would be “unfair and unjust” that the Respondent should now be allowed to resile from the representations made both at interview and set out clearly and unambiguously in the job offer letter that the Complainant would receive a Christmas bonus of €500. 

In the circumstances and I find the €500 bonus was properly payable to the Complainant and she was entitled to receive it.  I find the non-payment of the bonus constitutes an unlawful deduction within the meaning of the PWA.   

CA-00060953-001 complaint under section 6 of the Payment of Wages Act, 1991

For the reasons set out above I decide this complaint is well-founded.  I direct the Respondent to pay to the Complainant the Christmas bonus of €500 [One4all voucher] within 42 days of the date of this decision. 

Christmas bonus; probation;