Complainant

Respondent

Parties

Izabella  De Oliveira Conde

Compass Catering Services, Ireland Limited

Representatives

Aleksandra Tiilikainen IBEC

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997

CA-00055804-001

29/03/2023

The Complainant was employed as a Barista with the Respondent from 28th February 2022.

The Complainant was due to go on maternity leave on 6th March 2023. However, she was not able to continue at work due to her pregnancy and was signed off work on sick-leave by her GP on 21st January until 18th February 2023. She requested two weeks paid holiday from 20th February to 3 March 2023.

The Complainant was not paid her two weeks holiday pay. The Complainant received a payslip on 3rd March 2023 with 3 holidays and 270 worked hours overpaid 3,831.75 gross net 1,997.96 which was a mistake. This was stressful when she was going on maternity-leave.

She received a payment on 4th May 2023 of 1,203.77 net and payslip showing payment of 1,179.00 euro gross for holidays and 982.50 for 75 hours. She emailed the Respondent regarding the 75 hours paid saying this was an error and no money was received.

She subsequently received a payslips 6th July 2023 for statutory sick pay of 136.87 and no money was received. The Respondent wrote to her seeking recovery of the net sum of 3,571.86 euro.

Following the Complainant’s maternity-leave on 3rd September 2023 she went on parental leave until 22nd October 2023. She resigned on 13th September 2023 providing four week’s notice of resignation. However, the Respondent removed her from payroll as of 13th September 2023.

The Complainant received a payslip on 2nd November 2023 for 112.50 hours gross 1,473.45 978.45 net but no money was paid.  She was notified after the first hearing on 10th November 2023 that the overpayment was incorrect and the correct figure is £2,593.41 sterling.

The Complainant submits that if an overpayment occurs it is usual for the employer to agree a reasonable repayment schedule by the employee. It is prohibited for an employer to make unauthorised deductions from salary under the Payment of Wages Act 1991 and employers should follow fair procedures.

The Complainant was employed with the Respondent from 28th February 2022 until 22nd October 2023.

In 2022, the Respondent introduced new system to assist in payment of wages, time and attendance. From 21st January to 18th February 2023, the Complainant was on certified sick leave.

The Complainant had an entitlement of 3 days Statutory Sick Pay which were used on 6th January, 18th January, 23rd January 2023. SSP was not processed in error by the manager.

The Complainant asked to take 2 weeks of her annual leave before her maternity leave, this was to be processed between 20th February and 3rd March, however, due to an incorrect input on the system, only Statutory Maternity Leave was processed instead of annual leave. No payment of annual leave was processed at the time as the system does not allow processing of annual leave while on maternity leave.

The Complainant started her maternity leave on 6th March 2023. On the 23 March 2023, there was an error in payment of wages as only holiday hours should have been paid, which was due to the correction of the maternity leave dates. Additionally, while 22.50 hours of annual leave were paid at this time, 90 hours should have been paid.

The Complainant received an overpayment for 270 hours which were not due to her. The Complainant received a payment of €3,831.75 gross ( €1,997.96 net). On receipt of the WRC claim, Ms Kerr engaged with payroll and requested that the outstanding annual leave be paid. This was to be processed at the beginning of May 2023, however, the Complainant did not receive the payment due to the system flagging an overpayment. When the system shows an overpayment, no payment can be processed to the employee.

Following this, the absences were corrected where 90 hours of annual leave at a value of 1,179.00 and 75 hours of at value of 982.50 and 2 days of statutory sick pay at 137.56 were subtracted from total overpayment. At this stage the total overpayment was net 2,613.44. After the holidays were processed the total overpayment net was 2613.44. In July 2023, the Statutory sick pay was processed due to the complainant being on Week 1 Month 1 tax bases this changed the overpayment value to 3571.86. The increase in overpayment is reflective of Week 1 tax basis and the declaration the company has made to revenue, our records show that the employee should be due a refund of all the tax paid to date which balances out the overpayment.

An overpayment letter and explanation were issued to the complainant on 7th July and 3rd October 2023. The Complainant did not make the repayment. The Complainant resigned on 13th September and her last day of service was 22nd October 2023. Due to an error, her manager terminated the employment with immediate effect on 13th September 2023. Once the Respondent became aware of this error, this was rectified, and correct leaving date was processed. Between 1st of April and her termination date the complainant accrued 11 days annual leave and 4 public holidays, which was processed on payroll and this reduced the overpayment again.

The Respondents states that the complaint is not valid as the deduction was in respect of an overpayment and not the Complainant’s wages and does not fall within the Payment of Wages Act. The fact is that on 23 March the Complainant received the payment for 25 hours of annual leave and an overpayment of 270 hours of basic hours which was not due to her. This totalled to the overpayment of gross €3,831.75 which was further reduced to €3,571.86 due to statutory sick pay being balanced against the total amount owed.

The Respondent position is that the overpayment value was reduced by the statutory annual leave. As the Complainant was overpaid, the hours processed for week 44 were not paid, but, it instead reduced the Net Overpayment owed to the company. Due to the fact that the Complainant is on a Week 1 basis for her Tax, the overpayment will seem higher than the Net amount she has received. This is due to the fact that the company paid over the Tax/USC & PRSI to the Revenue, and when the hours were recalculated the system has not automatically recovered the Tax etc. The Complainant is more than likely due a Tax & USC refund from The Revenue, based on her Earnings YTD, however, she will need to request this direct from them through her 'My Account'.

The correct amount of the overpayment is €2,593.41, and a letter is going to be sent with details of how it can be repaid. The system was also corrected as the overpayment was not reflected correctly when originally processed, and therefore there will be a final payslip generated for week 46 (pay date 16.11.2023). This payslip will show her correct YTD Values for Gross Pay, Tax, USC & PRSI as already reported to the Revenue.

The Complainant was asked to return the money to the Respondent and she has not done so. The Respondent argues that no deduction took place as the Complainant was paid for 270 hours of basic pay and 25 hours of annual leave, whereas she was only due payment for 90 hours of annual leave. The Respondent argues that it was reasonable not to process the payment for 65 hours of the annual leave where the complainant is in receipt of 205 hours of pay which was not due.  The Respondents employee handbook provides the Company is authorised to deduct any overpayments from pay. The Respondent requests the complaint be dismissed.

I heard and considered the written and oral submissions of the parties.

The Complainant was provided with her terms and conditions of employment on 17th February 2023. This contains a clause which states “As stated in your contract of employment the company is entitled to deduct from your pay (including holiday pay, sick-pay, bonus or commission, payment in lieu of notice any amounts which are owed by you to the company. This includes any loans, excess holidays taken, expenses, uniform costs or overpayments”.

The Complainant went on sick-leave from 21st January 2023 until 18th February 2023. She was due to take holidays from 20th February 2023 until 3rd March 2023. She had notified her employer that she was going on maternity-leave on 6th March 2023.

The Complainant was not paid for two weeks holiday pay agreed in February and March 2023 on 6th March 2023. The company commenced her maternity-leave on 22nd January 2023 without her agreement.

On 23rd March 2023, the Complainant was paid for three days holiday leave of 22.50 hours and overpaid for 270 hours (total 292.50 hours) by 3,537.00 euro gross net 1,997.96 euro due to a payroll error by the company.

Subsequently, the company reversed 375 hours 4,912.50 gross euro on 30th March 2023. There was a further error as this should have been a reversal of 292.50 hours not 300 hours and an additional 7.5 hours was deducted in error.

The Complainant was then issued with payslips for two weeks holidays and 75 hours wages of 2,161.50 euro gross, net 1,203.77 on 4th May 2023, and 137.50 gross euro 136.87 net statutory sick pay on 6th July 2023. No monies were received by the Complainant on 4th May or 6th July 2023 as the company retained monies owed to the Complainant setting this sum off against the overpayment made. 7.5 hours deducted on 30th March 2023 were not repaid by the company.

On 7th July and 3rd October 2023, the Complainant received letters from the company seeking repayment of 3,708.73 net (taking into account statutory sick pay due) now 3,571.86 euro. This is incorrect as the net sum due to be repaid by the Complainant was then 657.32 euro. In addition, payment of 7.5 hours owed to the Complainant had not been credited to her.

Subsequently, the Complainant decided to resign following her maternity-leave and parental leave and provided four week’s notice of termination of her employment on 22nd October 2024. Due to an error on the part of the company, the Complainant was dismissed on 13th September 2023 by the company. The Complainant brought this issue to the attention of the company, and a payslip issued to her for holiday leave of 112.50 hours (15 days) on 2nd November 2023 of 1,473.75 gross euro net 978.45. Again, the Complainant was not paid any money by the company into her bank account for holiday leave due although not withstanding the set off, a sum of 321.13 net euro was due to her plus 7.5 hours.

In October 2023, the Complainant was due 1.66 days per month annual leave for her maternity and parental leave of 7 months plus public holidays of 6 days. This totals 17.66 days. The Complainant was credited with 15 days and there was a shortfall of 2.66 days leave owed.

 S 5 of the Payment of Wages Act 1991 regulates deductions and payments by employers:

(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.

At the time

S 5 (5) Nothing in this section applies to—

(a) a deduction made by an employer from the wages of an employee, or any payment received from an employee by an employer, where—

(i) the purpose of the deduction or payment is the reimbursement of the employer in respect of—

(I) any overpayment of wages, or

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

made (for any reason) by the employer to the employee, and

(ii) the amount of the deduction or payment does not exceed the amount of the overpayment,

(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.

The Complainant was due to be paid holidays on 6th March 2023 which were not paid. Subsequently there was an overpayment by the company on 23rd March 2023. I am satisfied that the company are entitled to withhold funds due to the Complainant and set them off against the overpayment given the agreement of the Complainant to this provision in her terms and conditions of employment and I find this does not amount to a deduction from the wages of the Complainant.

However, it is clear from an examination of the payments, that the company incorrectly demanded repayment of the gross sum overpaid which was never received by the Complainant. The Complainant had at all times received a lesser sum net of taxes and other statutory deductions. In addition, 7.5 hours deducted on 30th March 2023 were not credited to the Complainant.

 On 2nd November 2023, 321.13 net euro was due to the Complainant for annual leave but it was not paid. There was a shortfall in the company’s calculation of holiday pay due of 2.66 days of 261.35 euro, plus 7.5 hours from 30th March 2023 98.25 euro, a total of 359.60 euro gross and 321.13 net due to the Complainant. I find the complaint well founded and direct payment of 359.60 euro gross and 321.13 net euro by the company to the Complainant.

In addition, I award the Complainant compensation of one week’s net wages for breach of the Act and direct payment by the Respondent.

The complaint is well founded and I direct payment of 359.60 euro gross and 321.13 net euro by the company to the Complainant.

I award the Complainant compensation of one weeks net wages for breach of the Act and direct payment by the Respondent.