SECTION 28(1), ORGANISATION OF WORKING TIME ACT, 1997
CEMENTATION SKANSKA (FORMERLY KVAERNER CEMENTATION LIMITED)
- AND -
Chairman: Ms Jenkinson
Employer Member: Mr Grier
Worker Member: Mr. Somers
1. Appeal against Rights Commissioner's Decision WT5899/01/MR
2. The worker claims that he did not receive holiday/public holiday pay while employed by the Company. The Company states that it paid its workers a premium payment in lieu of holiday pay. The worker left his employment on the 6th May, 2000 and referred a claim to the Rights Commissioner service on the 6th September, 2001. The worker states that the reason he did not make a claim within the 6 months as specified in Section 27(4) of the Organisation of Working Time Act, 1997 (the Act) was that he was awaiting the results of a test case taken by a fellow employee.
The Rights Commissioner's Decision was issued on the 10th April, 2003 as follows:-
"In accordance with Section 27 of the Act, I hereby declare that this complaint
is out of time."
The worker appealed the Rights Commissioner's Decision on the 29th April, 2003 in accordance with Section 28(1) of the Organisation of Working Time Act, 1997. The Company's case is that (1.) the contracts of employment were very clear that workers were paid holiday pay by way of premium payments and (2.) that the worker's claim is out of time. The Court heard the appeal on the 12th August, 2003.
The following is the Court's Determination:
This is an appeal by the worker against the decision of the Rights Commissioner in WT5899/01/MR who found that the complaint under the Organisation of Working Time Act, 1997 (the Act) was out of time in accordance with Section 27 of the Act.
In this case the respondent made no defence to the claim other than to contend that the complaint was presented out of time.
The claimant in this case was employed by the respondent from 1st December 1999 until 6th May 2000. In common with other employees of the respondent he was initially employed on a contract of employment, which purported to incorporate an element into his basic pay to cover payment in respect of annual leave and public holidays. On or about January 2000 an employee of the respondent, Mr. Martin Treacy, referred a complaint to a Rights Commissioner, pursuant to section 27 of the Organisation of Working Time Act 1997 (the Act), in which he sought to challenge the validity of these arrangements.
By a decision dated 14th April 2000 the Rights Commissioner held with the claimant in that case and directed that he be paid in respect of the relevant periods of annual leave and public holidays. The respondent appealed that decision to the Court. By Determination DWT017, issued on 31st January 2001, the Court dismissed the appeal and affirmed the decision of the Rights Commissioner. In that Determination the Court held, inter alia, that the impugned contractual term was rendered void by the combined effect of section 37 of the Act and Article 7(2) of Directive 93/104/EC on the Organisation of Working Time.
On April 2001 the respondent issued amended contracts of employment to its employees which conformed to the requirements of the Act in respect to holiday entitlements. However, the amended terms were expressly limited in their application to the period from the 1st January 2001 onwards. The contract did provide that the leave year for the purpose of granting leave would be the period specified in section 2(1) of the Act, namely, a period commencing on 1st April in any year and terminating on 31st March in the following year. At that time the claimant had ceased to be employed by the respondent and was unaffected by this change.
The claimant’s employment with the respondent had terminated on 6th May 2000. On 6th September 2001, he presented a complaint to a Rights Commissioner pursuant to section 27 of the Act claiming redress in respect of alleged infringements of his statutory rights in relation to annual leave and public holidays. The complaint was heard by the Rights Commissioner on 12th March 2003.
The Scope of the Complaint.
The complaint herein relates to alleged continuing contraventions of the Act extending over the entire duration of the claimant's employment with the respondent. It was clearly presented outside the time limit prescribed by section 27(4) of the Act and the Rights Commissioner so held in his decision which issued on 10th April 2003. Further, the Rights Commissioner declined to apply the extended time limit permitted by section 27(5) and so declined to entertain the complaint. Consequently in this appeal the first issue to be decided is whether the benefit of section 27(5) can be afforded to the claimant so as to give the Court jurisdiction to adjudicate on his complaint.
Extension of the Time Limit.
Section 27(5) of the Act provides as follows: -
- “Notwithstanding subsection (4) a Rights Commissioner may entertain a complaint under this section presented to him or her after the expiration of the period referred to in subsection (4) (but not later than 12 months of such expiration) if he or she is satisfied that the failure to present the complaint within that period was due to reasonable cause”.
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 his or her 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.
Has the Claimant shown Reasonable Cause?
The claimant told the Court that the question of holiday entitlements became a live issue amongst the respondent’s workforce after the decision of the Rights Commissioner in Mr. Treacy’s case. The claimant had discussed the matter with Mr. Mark Sanky and he became aware that other employees had discussed the matter with Mr. Steve Barber (both of whom are managers with the respondent) and had been advised that Mr. Treacy’s case was a test case and that when this was finally determined the outcome would be applied to all employees. They also indicated to him that the matter was receiving attention by the company in the UK.
The claimant also became aware that following the determination of Mr. Treacy’s appeal certain employees had contacted the offices of the Labour Relations Commission with a view to presenting claims under the Act. The advice received was that it was unnecessary to make individual claims, as a number of claims already submitted would be treated as test cases. The claimant said that this understanding of the position was widely communicated amongst the workforce.
The respondent denied that they regarded Mr. Treacy’s case as a test case or that the claimant had been told that his holiday entitlements would be determined by its outcome. Neither Mr. Barber nor Mr. Sanky were present in Court to give evidence.
The company accepted that it was not prejudiced in its defence by the delay in the presentation of the claim.
Conclusions of the Court.
The Court is satisfied that when Mr. Treacy succeeded in his claim before the Rights Commissioner his colleagues, including the claimant, would have pursued similar claims had they not been deflected from so doing by the belief that the final outcome of that case would be of general application.
All parties viewed Mr. Treacy’s case as a test case in the sense that it would decide whether the respondent could fulfil its statutory obligations under the Act by incorporating an element in basic pay to cover holidays. The Court is satisfied that this view was held by some members of management and was conveyed to the workforce including the claimant.
Whilst the appeal in Mr. Treacy’s case was pending it was perfectly reasonable for the claimant to suppose that the respondent would comply with the law when its import was finally decided. Thereafter, there was confusion amongst employees, including the claimant, as to whether or not it was necessary for them to make individual claims under the Act or whether a number of cases then in progress would decided the matter.
Finally, the Court notes that the claimant did not have the benefit of independent professional advice in relation to his rights or on the procedures for the making of complaints under the Act.
In all the circumstances of the case the Court is satisfied that in respect of those contraventions of the Act which occurred up to 12 months after the expiry of the time limit at section 27(4), reasonable cause has been shown for the claimant's failure to present the complaint within that time limit. The Court is further satisfied that the respondent has not suffered any prejudice by reason of that delay and that the claimant has a good arguable case which ought be heard.
The Court therefore determined to entertain all complaints appertaining to contraventions of the Act alleged to have occurred on or after 7th March 2000 (hereafter the relevant period).
The Claimant’s Holiday Record.
The leave year 1999 to 2000 ended on 31st March 2000. Hence any contravention of the Act arising from the respondent’s failure to provide the claimant with the requisite leave in respect of that leave year accrued within the relevant period. Further, any contravention arising from the respondent’s failure to pay the claiment in respect of outstanding holidays on the cesser of his employment also accrued within the relevant period. However, in so far as the complaint relates to the respondent's failure to pay the claimant in respect of annual leave or public holidays actually taken on dates prior to the relevant period, it is statute barred and, to that extent it is not cognisable by the Court.
Leave Year 1999 – 2000
The records show that in the period from the commencement of his employment on 1st December 1999 the claimant received one day’s leave up to 7th March 2000, accordingly the respondent was obliged to provide the claimant with 5 days paid leave before the expiry of the leave year on 31st March 2000.
In relation to public holidays, only those, which fell after 7th March 2000, can be taken into account – 17th March 2000 for which he received a day off without pay.
Leave Year 2000 – 2001
The records show that in the period up to the termination of his employment on 6th May 2000, the respondent was obliged to provide theclaimant with one and three quarter’s days paid leave for period 1st April to 6th May 2000 and the claimant is entitled to redress for the loss of the annual leave.
In relation to public holidays, there were two in the leave year 2000 – 2001 until the date of his termination of employment on 6th May 2000 - 24th April (Easter Monday), and 1st May 2000, both of which were paid at double time.
It is clear from the foregoing that the claimant did not receive his full entitlements in respect of both annual leave and public holidays throughout the relevant period. This complaint is, therefore, well founded.
Where a claimant has not received his or her statutory period of leave a claim cannot be made nor can an award be formulated as being for payment in lieu of holidays. Article 7 of the Working Time Directive expressly prohibits the payment of an allowance in lieu of annual leave except where the employment relationship has ended. In such cases the proper award should be in the form of compensation for loss of annual leave. Such an award need not be limited to the value of the lost holidays.
The obligation to provide annual leave is imposed for health and safety reasons and the right to leave has been characterised as a fundamental social right in European Law (see comments of Advocate General Tizzano inR v Secretary of State for Trade and Industry, ex parte Broadcasting, Entertainment Cinematography and Theatre Union  IRLR 559which were quoted with approval by Lavin J in the Royal Liver case). InVon Colson & Kamann v Land Nordrhein – Westfalen  ECR 1891the ECJ has made it clear that where such a right is infringed the judicial redress provided should not only compensate adequately for economic loss sustained but must provide a real deterrent against future infractions.
In this case the Court is satisfied that the appropriate form of redress is an award of compensation. In considering the element of its award to cover the economic loss suffered by the claimant the Court has had regard to the rate of pay applicable to the claimant at the material time and the average bonus calculated in accordance with Regulation 3(3)(a) of the Organisation of Working Time (Determination of Pay for Holidays) Regulations SI No. 475 of 1997.
In this case the Court is satisfied that the appropriate form of redress is an award of compensation. The Court measures the quantum which is fair and reasonable in all the circumstances at €1000 and directs the respondent to pay to the claimant compensation in that amount.
Accordingly, the decision of the Rights Commissioner is set aside and the appeal is allowed.
Signed on behalf of the Labour Court
Enquiries concerning this Determination should be addressed to Larry Wisely, Court Secretary.