PWD2319

1. Appeal of Adjudication Officer Decision No(s) ADJ-00039877,CA-00051296-001

BACKGROUND:

2. This is an appeal of an Adjudication Officer’s Decision made pursuant to Section 7(1) of the Payment of Wages Act, 1991. The appeal was heard by the Labour Court on July 13 2023 in accordance with Section 44 of the Workplace Relations Act, 2015. The following is the Court's Decision:

DETERMINATION:

This matter comes before the Court as an appeal by a worker (the Appellant) against a decision of an Adjudication Officer in his complaint made under the Payment of Wages Act, 1991 (the Act) against his employer (the Respondent). The complaints under appeal to the Court were made to the Workplace Relations Commission on 24^th June 2022.

The Adjudication Officer decided that the complaint of the Complainant was not well founded.

Motion of the Respondent

The employer made application to the Court to have the appeal hearing held otherwise than in public.

The Court invited the Appellant to comment on the request. The Appellant did not respond to that invitation.

The Court considered the motion of the Respondent and decided, in accordance with Section 41(14) of the Workplace Relations Act, 2015, that because of the existence of special circumstances, the proceedings of the within appeal should be conducted otherwise than in public. Consequent on that decision, this decision of the Court is anonymised.

Extension of time.

The Appellant’s complaint to the Workplace Relations Commission was made on 24^th June 2022. His representative submitted that the Court should extend time for the making of the within complaint in accordance with Section 41(8) of the Workplace Relations Act, 2015 (the Act of 2015) so as to comprehend alleged breaches of the Act which had occurred at any time in the period of 12 months prior to the making of the complaint. The Respondent contended that the cognisable period for the making of the within complaint was confined to the six-month period prior to the making of the complaint.

Law applicable to time limits

The Act of 2015 at section 41 in relevant part provides as follows:

• 41(6) Subject to subsection (8), an adjudication officer shall not entertain a complaint referred to him or her under this section if it has been presented to the Director General after the expiration of the period of 6 months beginning on the date of the contravention to which the complaint relates.

  (8) An adjudication officer may entertain a complaint or dispute to which this section applies presented or referred to the Director General after the expiration of the period referred to in subsection (6) or (7) (but not later than 6 months after such expiration), as the case may be, if he or she is satisfied that the failure to present the complaint or refer the dispute within that period was due to reasonable cause.
  
  

The Appellant submitted that reasonable cause existed which would allow an extension of time for the making of his complaint. The purpose of the Appellant’s submission in this regard was that he contended that, whereas the cognisable period applicable to his complaint was confined by the statute to the six months prior to the making of the complaint, the Court is empowered by Section 41(8) of the Act of 2015 to extend that period to 12 months. He contended that the employer had been in breach of the Act across a 12 month period prior to the making of his complaint.

He relied in his submission upon this Court’s decision in Cementation Skanska (formerly Kvaerner Cementation) v Carroll (DWT/03/38) where the Court stated

• “It is noted that the standard required by this subsection is that of “reasonable cause”. This may be contrasted with the much higher standard of “exceptional circumstances preventing the making of the claim” which is provided for in other employment related statutes. The Act gives no guidance as to the type of circumstances that can constitute reasonable cause and it would appear to be a matter of fact to be decided by the Rights Commissioner (and by extension the Court on appeal) in each individual case.

  It is the Court's view that in considering if reasonable cause exists, it is for the claimant to show that there are reasons which both explain the delay and afford an excuse for the delay. The explanation must be reasonable, that is to say it must make sense, be agreeable to reason and not be irrational or absurd. In the context in which the expression reasonable cause appears in the statute it suggests an objective standard, but it must be applied to the facts and circumstances known to the claimant at the material time. The claimant’s failure to present the claim within the six-month time limit must have been due to the reasonable cause relied upon. Hence there must be a causal link between the circumstances cited and the delay and the claimant should satisfy the Court, as a matter of probability, that had those circumstances not been present he would have initiated the claim in time.

  The length of the delay should be taken into account. A short delay may require only a slight explanation whereas a long delay may require more cogent reasons. Where reasonable cause is shown the Court must still consider if it is appropriate in the circumstances to exercise its discretion in favour of granting an extension of time. Here the Court should consider if the respondent has suffered prejudice by the delay and should also consider if the claimant has a good arguable case.”

In July 2019 his allowance was cut unexpectedly, and he made representations to the Union, the Respondent and Government. The Respondent refused to meet him to discuss the matter and refused to provide an answer to his trade union.

In these circumstances the delay was reasonable, and the Respondent has not suffered any prejudice with regard to the delay. Accordingly, the cognisable period for the claim should be extended to 24^th June 2021.

Summary of the submission of the Respondent with regard to time limits

The Respondent submitted that the cognisable period for the within complaint is 25^th December 2021 to 24^th June 2022 and any claim in respect of any period outside that period is statute barred. The Appellant was aware of his alleged issues with the non-payment of the allowance at pre-March 2012 level from February 2019 at the very latest. There is no reason therefore for the Complainant not to have referred any complaint at this time.

Discussion and conclusion of the Court with regard to time limits

The essence of the Appellant’s application for an extension of statutory time limits is that he decided, in 2019, that it would be preferable to engage with the Respondent and exhaust his avenues of internal appeal internally. Additionally, he chose to make representations to the Union, the Respondent and Government rather than to initiate the within complaint. He chose to continue to approach the matter in that manner until the making of the within complaint on 24th June 2022.

The Court is of the view that the Appellant cannot circumvent the time limits set out in the Act of 2015 by seeking to rely on an internal procedure that did not prevent him from bringing his complaint within the statutory time limit. The Court addressed this issue in Brothers of Charity Services Galway v Kieran O’Toole [EDA 177] where it held:-

• “The Court cannot accept that deploying the Respondent’s internal procedures operated to prevent the Complainant from initiating the within complaints within the statutory time limit provided under the Acts.”

• “There was a delay in processing the grievance which lasted for more than six months. In the meantime, the Complainant was out of work on sick leave. Again, he decided to allow that procedure take its course while time was running under the Act. When the matter was eventually brought to a conclusion under the grievance procedure the time limit for bringing a complaint under the Act had expired……”

  The Court finds that in the particular circumstances of this case the Complainant made a choice and must take the consequences of that choice. He chose not to pursue a complaint under the Act, allowed time to pass and found himself statute barred when his chosen procedure did not resolve the matter to his satisfaction.”

In such circumstances, the Court has decided that the Appellant has not demonstrated reasonable cause such as to permit the Court to extend the cognisable period for the within complaint beyond that period set down in the Act of 2015 at Section 41(6).

Law applicable to the within complaint

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.

(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 Appellant took up an assignment in the Respondent’s employment on 1^st July 2013 having previously been employed by the Respondent since 17^th July 1979.

It is common case that the role to which the Appellant was assigned in July 2013 carried an allowance in the nature of pay of €18,653.90 per annum. It is also common case that, historically, a ‘retention allowance’ was paid to persons upon termination of their assignment to the role taken up by the Appellant in July 2013. That ‘retention allowance’ was paid for a period of seven years post termination of assignment and amounted to 50% of the full allowance for a period of five years post termination and 25% of the full allowance for years 6 and 7.

The Respondent submitted that the ‘retention allowance’ was abolished entirely by Government decision in 2012. Subsequently, in 2017, the Department of Public Expenditure and Reform sanctioned a retention allowance for four years post termination of assignment to be paid on the basis of 50% of the full allowance for one year post termination, 40% for the second year, 30% for the third year and 20% for the fourth year.

The Appellant submitted that the purported abolition of the retention allowance by Government decision in 2012 did not apply to him since this was not reflected in the terms and conditions of his employment.

Summary of the submission of the Appellant

The Appellant submitted that a retention allowance in accordance with arrangements in place since 2001 applied to him on his appointment to the role in question in June 2013. He submitted that his letter of appointment dated 11^th June 2013 stated as follows:

“It should be noted that the retention element of this allowance is longer applicable”

The Appellant submitted that the within appeal turns on the interpretation of this wording. He submitted that the Respondent would argue that the word ‘no’ is missing but, by corollary, it could be argued that the word longer should not be in the sentence.

The Appellant submitted that, at a minimum, there is doubt as to the meaning and effect of the sentence. That doubt is compounded by correspondence received from the Respondent which confirmed that three other officers were brought within a re-interpretation based on the date of their appointment in 2012.

The Appellant submitted that, having regard to authorities submitted by him, the Appellant’s letter of appointment dated 11^th June 2013 should be construed as a whole. Therefore, the Court, in the submission of the Appellant, was invited to constructively construe the context of the phrase ‘is longer applicable’ in accordance with the decision of McDonald J in Solicitors Mutual Defence Fund Limited v Costigan and others [2020] IEHC 13.

Accordingly, the Appellant has a contractual entitlement to the retention allowance at the level provided for by a 2001 circular and that allowance is properly payable within the meaning of the Act. The purported abolition of the retention allowance by the Government Decision of September 2012 did not apply to the appointment of the Appellant in 2013 since this was not reflected in the terms and conditions of his employment.

The Appellant submitted additionally that, if the Government decision of 18^th September 2012 did abolish the retention allowance for ‘new beneficiaries’ and this is found by the Court to have applied to the Appellant, he had a legitimate expectation that the terms and conditions of the 2012 circular advertising the position would be same as applicable to incumbent officers, i.e. that the retention allowance as provided by a 2001 circular, albeit abolished by Government decision of September 2012 for new beneficiaries, would be payable to him on cessation of his assignment which commenced in June 2013.

This legitimate expectation was based on the terms of the 2012 circular which did not refer to the abolition of the retention allowance, his letter of assignment which used the phrase ‘is longer payable’, the fact that negotiations on retaining the allowance for new beneficiaries continued into 2013 and on a mail from an official of the Respondent in 2017 which stated that the arrangements agreed in 2017 would not apply to individuals appointed ‘under certain terms and conditions’ prior to amendment.

When asked to clarify this submission by the Court, the Appellant’s representative submitted that the submission was to the effect that a Government decision abolishing an allowance could be negated on the basis of a legitimate expectation of a worker purported to be affected by that decision.

Summary of the testimony of the Appellant

The Appellant gave evidence in accordance with his submission.

He emphasised that it was his expectation on appointment that he would receive a retention allowance on cessation on the basis of the 2001 circular providing for a retention allowance. He stated that he further interpreted a letter from the Respondent dating from 2017 as creating an expectation in his mind that he would receive such a retention allowance on cessation on the basis that he was an officer appointed under a previous regime.

He did not accept when questioned by the Respondent that a Government decision communicated to the Respondent dating from September 2012 abolished the retention allowance for him as a ‘new beneficiary’ appointed in June 2013. He did not accept that the retention allowance was restored on different terms by agreement in 2017 and that the retention allowance thus restored applied to him. He stated that he had been appointed under the 2001 terms in place prior to the Government decision and consequently he was an officer appointed ‘under certain terms and conditions’ as referred to in a letter from the Respondent in 2017.

Summary of the submission of the Respondent

The retention allowance at issue in the within appeal was a prescribed rate of payment for a seven-year period following completion of the role assignment giving rise to the allowance. It was abolished entirely following a Government decision pertaining to allowances and premium payments made at a meeting of Government on 18^th September 2012. By letter dated 7^th March 2012, the Department of Public Expenditure and Reform (DPER) directed that, in the absence of a business case, no further retention allowance after the cessation of duties could be paid to any new appointee to the role. That decision was made following a thorough review of allowances within the civil service. Many other allowances were abolished at this time in order to secure savings in the civil service pay bill. The direction of DPER was formalised with effect from 18^th September 2012 by decision of Government.

That decision of Government, which explicitly abolished the retention element of the allowance to new beneficiaries, was conveyed to the Chairman of the Office of the Revenue Commissioners by the Secretary General of the Department of Public Expenditure and Reform by letter dated 4^th October 2012.

Thereafter, the retention allowance was not payable to officers taking up the role taken up by the Appellant in June 2013. At no time was the Appellant informed that he was entitled to the retention allowance which was abolished in March 2012.

Following negotiations between DPER and unions, the retention allowance was restored under new terms and conditions by agreement reached in or around December 2017. The correspondence surrounding that agreement between DPER and the Appellant’s representative trade union made it clear that the newly agreed arrangements were applicable to officers assigned to the relevant role after 1^st January 2012.

Upon cessation of his assignment, the Appellant received the retention allowance agreed and restored in 2012 in accordance with those agreed arrangements.

The Appellant has no entitlement to the allowance at the level he contends for.

Discussion and conclusion

In Marek Balans v Tesco Ireland Limited [2020] IEHC 55 Finnegan J. considered Section 5 of the Act as follows:

• Section 5 of the Act of 1991 prohibits the making of deductions from wages save in certain circumstances. Section 5(6) provides that where 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, then, except insofar as the deficiency or non – payment is attributable to an error of computation, the amount of the deficiency or non – payment should be treated as a deduction made by the employer from the wages of the employee on the occasion.

  Central to the court's analysis must be the concepts of wages properly payable and the circumstances in which, if there is a deficiency in respect of those such payments, it arose as a result of an error of computation.

  The provisions of s. 5(6) of the Act of 1991 were considered by Finnegan P. in Dunnes Stores (Cornelscourt) Limited v. Lacey [2007] 1 I.R. 478. A Rights Commissioner had found in favour of the respondents holding that the cessation of service pay amounted to an unlawful deduction, which was upheld by the EAT. It was argued that the EAT should address the question of remuneration properly payable to an employee before considering the question of a deduction or whether a deduction was unlawful. Finnegan P. concluded at p. 482:-

  • “I am satisfied upon careful perusal of the documents relied upon by the respondents that the same cannot represent the agreement or an acknowledgement of the agreement contended for but rather contain a clear denial of the existence of any such agreement. No other evidence of an agreement was proffered. In these circumstances I am satisfied that the Employment Appeals Tribunal erred in law in failing to address the question of the remuneration properly payable to the respondents, such a determination being essential to the making by it of a determination. Insofar as a finding is implicit in the determination of the Employment Appeals Tribunal that the appellant agreed to pay to the respondents service pay and a long service increment, then such finding was made without evidence and indeed in the face of the evidence: I am satisfied that there has been no deduction of pay from the respondents within the terms of the Act of 1991 but rather their remuneration has been unilaterally increased by the appellant making a payment which recognises their long service in excess of that which was payable prior to the 18th September, 2002. In either case there has been an error or law. Accordingly I allow the appeal.”
  This decision supports the proposition that the first matter which should be addressed by the Labour Court is to determine what wages are properly payable under the contract.

It is abundantly clear from the documentation provided to the Court, that the Respondent was, by direction of the Department of Public Expenditure and Reform in March 2012, prohibited from that date onwards from payment of the retention allowance to new appointees to the role to which the Appellant was appointed in June 2013. It is similarly clear from the documentation that, subsequently, a Government decision of September 2012 specifically and unambiguously confirmed the abolition of the payment of that allowance to ‘new beneficiaries’.

It is further clear that thereafter no retention allowance was in being until an agreement was reached in December 2017 between DPER and relevant trade unions to restore that allowance.

The Appellant ceased his assignment in August 2018 and a retention allowance became payable to him from that date. The Appellant contends that the difference between the value of the restored allowance which was agreed in 2017, which is the amount that was paid to the Appellant, and the value of the 2001 allowance which was abolished in 2012 amounts to a deduction within the meaning of the Act.

The first matter which must be addressed by the Court is to determine what wages were properly payable to the Appellant at the material time.

The Appellant, in his submission, submitted that ‘this case turns on the interpretation’ of the sentence

‘It should be noted that the retention of this allowance is longer applicable’

as contained in his letter of assignment to the role at issue in June 2013.

The Respondent has submitted that the sentence contains a typographical error whereby the word ‘no’ was omitted. The Appellant submits that ‘by corollary, it could be argued that the word longer shouldn’t be there’.

No submission has been made that a written contract is or was in being which provided a clear entitlement to the retention allowance to the Appellant on his appointment to the role at issue. Therefore, the contractual question does, as submitted by the Appellant, substantially turn on the interpretation to be applied to the sentence in the Appellant’s letter of appointment which clearly contains a typographical error. This is so because the sentence as written does not make clear sense in the English language.

In the view of the Court, having regard to the context and the undisputed factual matrix which includes a direction from DPER and a Government decision, the typographical error was the omission of the word ‘no’ rather than an inexplicable addition of the word ‘longer’. Having reached that conclusion, the Court must conclude that the letter of June 2013 cannot form a basis for a decision that the abolished retention allowance was properly payable to the Appellant on the basis of his contract of employment.

The Court notes that no other written communication is contended to have been made at that time which is contended to have created a contractual entitlement to payment of the retention allowance which was abolished in 2012.

The Appellant has submitted that he had a legitimate expectation to receive the abolished allowance upon cessation of his appointment. He submits that his expectation was fortified by correspondences surrounding the conclusion of an agreement in 2017 to restore that allowance.

The Appellant specifically submits that his legitimate expectation was based on

• 
  • The 2012 circular: This is the advertisement for appointment which resulted in the Appellant being assigned to the role in 2013. The Court notes that this ‘circular’ makes no reference to the retention allowance and gives no indication that such an allowance will be paid to the successful candidate.

  • The June 2013 letter of assignment containing a typographical error: The Court has earlier concluded that the error related to the omission of the word 'no'. The Court does not accept that the error created a legitimate expectation on the part of the Appellant that a retention allowance would be paid to him.

  • The fact that ‘negotiations’ on retaining the retention allowance for new beneficiaries continued into 2013: This is a reference to what appears to have been communications between senior officials of the Respondent and officials of a number of Government Departments / agencies in relation to a business case for the retention of the allowance. These communications are submitted by the Appellant to have concluded with a final business case for continuation of the allowance being made in February 2013. On his own submission, it is clear that if the Appellant was aware of such communications at that time he was aware of the background context which was the earlier decision to abolish the allowance for ‘new beneficiaries’ made in 2012. In any event, the communications at issue are submitted by him to have concluded in February 2013. Consequently, the Court cannot accept that these interactions could not be taken to have created an expectation on the part of the Appellant that he was entitled to the retention allowance on his appointment in June 2013.

  • A letter from an official of the Respondent written in 2017: This was a letter from an official of the Respondent which, inter alia, clarified that individuals appointed since 2012 that were not eligible for retention of the allowance will benefit from the 2017 restoration agreement. The Court can find no basis in this letter to support a contention that the Appellant could have held a legitimate expectation to anything other than the terms of the 2017 agreement.

The Court therefore concludes that the wages properly payable to the Appellant at the material time were equal to the wages which were in fact paid to him at that time.

In those circumstances, no deduction within the meaning of the Act has been made from the wages of the Appellant as contended by him.

The Court, having determined that the wages paid to the Appellant were the wages which, within the meaning of the Act, were properly payable on the occasion, must find that the complaint of the Appellant is not well founded.

Determination

For the reasons set out above the Court determines that the within appeal must fail.

The decision of the Adjudication Officer is affirmed.

The Court so decides.

	Signed on behalf of the Labour Court
	Kevin Foley
DC	______________________
17 August 2023	Chairman