SECTION 28(1), ORGANISATION OF WORKING TIME ACT, 1997
CEMENTATION SKANSKA (FORMERLY KVAERNER CEMENTATION) LIMITED
- AND -
Chairman: Mr Duffy
Employer Member: Mr Grier
Worker Member: Mr O'Neill
1. Appeal of Rights Commissioner's decision WT5921/01/MR
2. The worker claims that he did not receive any holiday/public holiday pay while employed by the Company. The Company states that the claimant was paid holiday pay and public holiday pay under revised contracts of employment which applied from 1st January, 2001.
The worker 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 waiting the results of a test case taken by a fellow employee.
The Rights Commissioner's Decision issued on the 31st December, 2002 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 28th January, 2003, in accordance with Section 28(1) of the Organisation of Working Time Act, 1997. The Company's case is that the worker's claim is out of time. A Labour Court hearing took place on the 22nd April, 2003. The following is the Court's Determination:
In this case the respondent made no defence to the claim other than to contend that the complaint was presented out of time.
The factual background to this case, as admitted or as found by the Court, is as follows:
The claimant in this case was employed by the respondent from 1st November 1998 until 21st 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.
In 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 21st 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 1st August 2002.
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 issued on 31st December 2002. 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 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 claimwithin 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 or she 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 became aware that other employees had discussed the matter with Mr Steve Barber and Mr Mark Sanky (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.
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. Mr Barber did give evidence to the Court in which he said that he believed that the outcome of the Treacy case would affect other employees and that he may have so indicated to the claimant. He did emphasise that this was a personal view and that he was not authorised by the company to give any such assurances to employees nor did he purport to do so. Mr Sanky did not 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 circumstance 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 claimants 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 respondent’ records show that the claimant took annual leave and public holidays as follows:
Leave year 2000 – 2001.
The relevant period in this leave year is from 1st April 2000 to 21th May 2000. He was entitled to 2.8 days annual leave in this period. He received 2 days holidays in week commencing 7th March 2001 for which he was not paid. There were 2 Public Holidays in the period on which he worked and received double time.
The claimant is entitled to redress in respect of the loss of cesser pay for 0.8 days and non payment for 2 days
Leave Year 1999-2000
The leave year 1999 to 2000 ended on 31st march 2000. Hence any contravention of the Act arising from the respondents failure to provide the claimant with the requisite leave in respect of that leave year accrued within the relevant period. However, in so far as the complaint relates to the respondents 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 bared and, to that extent it is not cognisable by the Court.
It appears that the claimant received a total of 3 annual holidays during this leave year They were taken in April 1999, and December 1999. The claimant was not paid for this leave but his claim in respect of it accrued outside the relevant period and cannot be taken into account. However, at the close of the leave year he was due 17 days holidays and this can be taken into account for the purpose of providing redress.
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. His complaint is, therefore, well founded. Accordingly the decision of the Rights Commissioner is set aside and the appeal herein is allowed.
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 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.
Having regard to all relevant considerations the Court measures the quantum which is fair and reasonable in all the circumstances at €1,600 and directs the respondent to pay to the claimant compensation in that amount.
Signed on behalf of the Labour Court
28th October, 2003______________________
Enquiries concerning this Determination should be addressed to Jackie Byrne, Court Secretary.