Complainant

Respondent

Parties

Peter  Healy

Hickey Fabrication Services

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-00063677-001

24/05/2024

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 parties agreed that there was no evidence in contention, the hearing proceeded in the absence of the oath or affirmation.

The complainant submitted that he was not paid a Christmas bonus, tool allowance nor payments for Health Insurance to which he was contractually entitled.

The complainant stated that he has been out on sick leave since 5 October 2021. 

The respondent submitted that as the complainant has not been working since 5 October 2021, his normal working weeks’ pay amounted to zero accordingly he was not entitled to a bonus payment. It was submitted that there was no contractual requirement to pay a bonus while an employee was out on sick leave.  The respondent noted that the payment in relation to health insurance amounted to benefit in kind and was outside the scope of the Act.

As regards the tool allowance, the respondent submitted that this was not a matter of custom and practise, that it had paid it previously on the basis of gesture of goodwill.

This complaint mirrors ADJ 51914 to a large degree.  That complaint related to the issue of tool allowance and the twice-yearly bonus payment.  The respondent and Union representation was the same in both cases.

The Payment of Wages Act, 1991, as amended defines wages as follows:

"wages", 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 of employment 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:

Provided however that the following payments shall not be regarded as wages for the purposes of this definition:

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

(ii) any payment by way of a pension, allowance or gratuity in connection with the death, or the retirement or resignation from his employment, of the employee or as compensation for loss of office,

(iii) any payment referable to the employee's redundancy,

(iv) any payment to the employee otherwise than in his capacity as an employee,

(v) any payment in kind or benefit in kind,

(vi) any payment by way of tips or gratuities.

Documentation provided by the union indicate how bonuses are due to be paid to members. Is outlines how a contractual bonus payment of a week's wages twice yearly, is to be paid around the summer shutdown and Christmas. Section 17 of the Union/Employer agreement also provides the day rate and the shift rate payable to employees.  It also includes following sentence “the Christmas and summer bonuses of one week's salary will also be based on a normal week.”

The argument put forward by the respondent is that the complainant was out sick for more than the past two years and in that time his ‘normal’ week amounted to zero. Accordingly, it argues that he was not entitled to a bonus because he was not in work.

The agreement concluded between the Employer and the complainant’s Union is silent on whether a bonus is payable when a worker is absent for work for a prolonged period.

Having regard to the definition of wages contained in the Act and to the terms of his contract of employment, I find that the respondent may have been obliged to pay the complainant a bonus of a normal week’s wages.  However, during a period when he was out on long term sick leave, for more than three and a half years, his normal rate of pay amounted to zero and given the wording of the contract, I find that the Act has not been contravened.

As regards the payment of a tool bonus, the complainant outlined how the allowance was payable to staff to replace worn out tools with local suppliers.  As such I find that this does not fall into the definition of wages in the Act but is comprehended as an exclusion at (i) above by the phrase “any payment in respect of expenses incurred by the employee in carrying out his employment”.

As regards the payment of health insurance, I find that this falls within the definition of what does not amount to wages in that it constitutes a benefit in kind and is comprehended as an exclusion at (v) above in relation to the definition of wages contained in the Act.

Accordingly, I find that the Act has not been contravened.

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

Payment of Wages – definition of wages – exclusions – no contravention