PWD2533

PARTIES:

DIVISION:

SUBJECT:

Appeal of Adjudication Officer Decision No's: ADJ-00043451 (CA-00054120-001)

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 in accordance with Section 44 of the Workplace Relations Act, 2015. 

The following is the Court's Decision:

DECISION:

This is an appeal by Barry McKelvey of a Decision of an Adjudication Officer CA-00054120-001 made under the Payment of Wages Act 1991 (“the Act”) in relation to complaint against Iarnród Eireann Irish Rail.

The Adjudication Officer found that the complaint was well founded and ordered Iarnród Eireann Irish Rail to pay the sum of €500 as compensation.

This case is linked to two other complaints CA-00055250-001 and CA-00057050-001 which were heard by the Court on the same day. At the hearing, the Court heard submissions from both parties. The parties declined to proffer witness testimony as the factual matrix was not in dispute.

In this Decision the parties are referred to as they were at first instance. Hence, Barry McKelvey is referred to as “the Complainant” and Iarnród Eireann Irish Rail as “the Respondent”.  

Agreed factual Matrix

In 2017, following the initiation of disciplinary procedures, the Complainant commenced High Court proceedings against the company in relation to legal representation at the disciplinary hearing.  Those proceedings were disposed of in a judgment delivered by the Supreme Court on 11 November 2019. As part of the disposal of the legal proceedings, the Complainant was ordered to pay the company’s legal costs which, following an adjudication of costs, amounted to €83,174.62.

The Complainant and the company failed to reach agreement on a repayment plan.

The company commenced deductions from the Complainant’s pay of €200 per week in Week 36, 2022. The company ceased deductions in Week 46, 2023, when the Complainant became involved in a formal insolvency process. The Complainant’s rate of pay during the relevant period was €1200 per week.

The Complainant contends that the deduction amounts to an unlawful under the Act. The Respondent company refutes that contention.

Summary Position of the Complainant

The non-payment of the Complainant’s wages amounts to an unlawful deduction under the Act.

The Complainant explicitly declined to give his consent for a deduction of €200 per week from his wages. There is no term in the Complainant’s contract of employment or in any collective agreement between the company and Group of unions that provide for such a deduction from his wages. The company has not satisfied any of the requirements set down in the Act, allowing for a lawful deduction from his wages.

The deduction was unlawful. The Complainant is entitled to receive €8,200 which is the amount that is properly payable to him. The compensation awarded should reflect the amount of the unlawful deduction. 

Summary of Respondent’s position

The Complainant is aware since October 2019 that he owes the company a considerable sum of money following the conclusion of his legal proceedings. This was subsequently confirmed as being €83,174.62. At no point since 2019 has he proposed any realistic payment plan for this amount to be paid in a reasonable timeframe. The Complainant has not engaged meaningfully with the company regarding his debt.

The Complainant chose to legally challenge the company in relation to his representation at a disciplinary hearing. In doing so he made a decision not to cooperate with the collectively agreed disciplinary procedures. Collective Agreements are the foundation of industrial relations between the company and the Trade Unions. Existing collective agreements form part of the contracts of employment of company employees. Any new collective agreement may alter the terms and conditions of employment of employees, e.g. a pay deal, a new policy etc. The company’s Grievance, Disciplinary Policies and Procedures were agreed between the company and the Trade Unions in 1994. The legal costs arose due to the Complainant’s failure to cooperate with the collective agreed disciplinary procedures.

The company made a reasonable decision to commence recouping the money through a payroll deduction. The deductions were stopped in November 2023 following legal advice relating to the Complainant’s insolvency procedures.

The Applicable Law

Section 5 of the Payment of Wages Act 1991 provides in part as follows:

(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.

(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.

Deliberations

The Complainant lodged his complaint to the Workplace Relations Commission on 13 December 2022. Accordingly, the Court’s jurisdiction, having regard to the time limits set out at section 41(6) of the Workplace Relations Act 2015, is confined to assessing alleged contraventions of the Act that occurred in the period from 14 June 2022 to 13 December 2022.

The Court needs in the first instance to ascertain what wages were properly payable to the Complainant during the relevant period. Having established that the Court must ascertain whether there was a shortfall in the proper payment and, if that was the case, whether the shortfall arose for one of the reasons set out in section 5(1) above.

What is properly payable?

It is accepted that the Complainant’s gross pay in the relevant period was €1,200 per week. 

Accordingly, the Court finds that in this case the amount properly payable to the Complainant in the relevant period was €1,200 per week.

Was there a shortfall?

It is accepted that the company commenced deducting €200 per week from the Complainant’s pay in Week 36, from 5 September 2022. Deductions continued on a weekly basis up to 13 December 2023.

Accordingly, the Court finds the Complainant was subject to shortfall in his wages each week for a 14-week period amount to €2,800 (€200 x 14).

Was the deduction required or authorised within the meaning of section 5(1) of the Act?

The Respondent does not argue that the deductions made were required or authorised to be made by virtue of statute, or that the Complainant consented to the deductions made. It relies on section 5(1)(b) of the Act and contends that it is entitled to make deductions from the Complainant’s wages by virtue of his contractual obligation to follow the policies and procedures in the employment.

Section 5(1) of the Act prohibits an employer from making deductions to an employee’s wages except in accordance with the provisions of that section. Section 5(1)(b) allows for a deduction to be made where “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”.

In reply to questions from the Court, the Respondent confirmed that there is no written contract of employment in place between the Respondent and the Complainant. It further accepted that there is no express term specified in a policy, procedure or collective agreement that provides for the deduction of wages from the Complainant, as occurred in this complaint.

Based on the submissions made, the Respondent has not established to the satisfaction of the Court that it can rely on any express term to assert that the deduction or shortfall was authorised by the Complainant’s contract of employment, such as to allow the Respondent to rely on Section 5(1)(b) of the Act.

The Act at Section 5 prohibits an employer from making a deduction from the wages that are properly payable to an employee unless the deduction (a) is required or authorised to be made by virtue of any statute, (b) is required or authorised to be made by virtue of a term of the employee's contract of employment or (c) the employee has given her prior consent in writing to it.

In the circumstances outlined to the Court the Respondent cannot rely on Section 5(1) of the Act to say that the deductions made from the Complainant’s salary were lawful.  Accordingly, the Court finds that an unlawful deduction from the Complainants wages occurred during the relevant period and so determines that the complaint is well founded.

Deduction

The Court is satisfied from the submissions made to the Court and relied upon by the Respondent that it did not require or provide authorisation for the deduction made. In those circumstances, the Court is satisfied there was an unlawful deduction of the Complainant’s wages that resulted in a shortfall in pay of €2,800.

Decision

The Court finds that the complaint is well founded.

The Court determines that the Complainant suffered a deduction from his wages during the cognisable period for the within complaint of €2,800 and that this deduction was unlawful.

The Court directs the Respondent to pay the Complainant the sum of €2,800 by way of compensation.

The decision of the Adjudication Officer is varied accordingly. 

The Court so Determines.

	Signed on behalf of the Labour Court
	Katie Connolly
AL	______________________
17 September 2025	Deputy Chairman

NOTE

Enquiries concerning this Decision should be addressed to Ms Amy Leonard, Court Secretary.