SECTION 28(1), ORGANISATION OF WORKING TIME ACT, 1997
CEMENTATION SKANSKA (FORMERLY KVAERNER CEMENTATION LIMITED)
(REPRESENTED BY J.J. FITZGERALD & CO. SOLICITORS)
- AND -
(REPRESENTED BY JAMES O'BRIEN & CO SOLICITORS)
Chairman: Ms Jenkinson
Employer Member: Mr Doherty
Worker Member: Mr O'Neill
1. Appeal against Rights Commissioner's Decision WT6732/01/MR.
2. The worker claims that he had not received holiday pay or public holiday pay in respect of the bulk of his employment and that the Company is in breach of the Organisation of Working Time Act, 1997. The Company claims that the worker had been paid holiday pay and public holiday pay under revised contracts of employment which applied from 1st January 2001 onwards.
The worker referred a claim to the Rights Commissioner service on the 13th October, 2001. The reason for the worker's failure to formally submit a complaint within the period required by Section 27 sub-section 4 of the Organisation of Working Time Act, 1997 was because he genuinely believed that this employer would recognise and honour the workers entitlements to paid annual leave and paid public holiday leave as provided for under Section 20 and 21 of the Organisation of Working Time Act, 1997, once the outcome of Labour Court appeal was known in the case of determination number DWT017. The worker regarded that case to be a test case and believed that the outcome if successful from the workers point of view would be honoured by the employer.
A Rights Commissioner's hearing took place on the 9th April, 2003 and his decision was issued on the 28th 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 6th June, 2003, in accordance with Section 28(1) of the Organisation of Working Time Act, 1997. The Company claims that if the worker case is based on the outcome of determination DWT017 dated 31st January, 2001, than time should run from that date. On that basis the Company submit that the worker's claim is statute barred. A Labour Court hearing took place on 1st June, 2004. The following is the Court's Determination:
This is an appeal by the worker against the decision of the Rights Commissioner in WT6732/01/MR who found that the complaint under the Organisation of Working Time Act was out of time in accordance with Section 27 of the Act.
Counsel for the appellant submitted a case concerning the company’s failure to comply the following provisions of the Organisation of Working Time Act, 1997:
(a) Sections 19, 20 and 21 dealing with an employee’s entitlement to pay annual leave as well as an employee’s entitlement in respect of public holidays.
(b) Section 14 which deals with Sunday work.
(c) Section 15 dealing with weekly working hours.
(d) Counsel also stated that the employer has failed to comply with and honour the terms of Programme for Prosperity and Fairness (PPF) by failing to make the appropriate pay awards to the employee as recommended under the terms of the programme during the time the employee was employed by the employer.The Court pointed out to Counsel that other than (a) these matters were not the subject of the Rights Commissioner’s recommendation and could not therefore be the subject of a Labour Court appeal. Furthermore, a failure to honour the terms of the PPF is not a matter within the remit of the Organisation of Working Time Act, 1997. Consequently, the Court will only deal with item (a).
In this case the respondent contended that the complaint was presented out of time and is therefore statute barred. It submitted that the six months period provided by section 27 (4) of the Act, begins to run on the 31st day of January 2001, being the date that the Labour Court issued Determination DWT017. Alternatively, if the annual leave period, as defined by section 2 (i) of the Act as 1st April, is taken to mean the 31st March 2001, then the claim may begin to run from that date and consequently the claim of the appellant is also statute barred.
The claimant in this case was employed by the respondent from 1st November 1998 until 28th September 2001. 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 Tracey, 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.
The claimant’s employment with the respondent terminated on 28th September 2001. On 24th October 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 9th April 2003.
The Scope of the Complaint.
The complaint herein relates to alleged continuing contraventions of the Act extending over the entire duration of the claimants employment with the respondent. The Court is satisfied that the claim in respect of the leave year 1st April 2001 to 31st March 2002 was presented within the time limit prescribed by section 27(4) of the Act. Consequently the Court overturns the Rights Commissioner’s decision issued on 28th
April 2003. The Rights Commissioner declined to apply the extended time limit permitted by section 27(5) and so declined to entertain the complaints in respect of previous leave years. 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 Courts 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.
In the context in which the expression reasonable appears in the statute it imports an objective standard, but it must be applied to the facts and circumstances known to the claimant at the material 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. Tracey’s case. The claimant 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. Tracey’s case was a test case and that when this was finally determined the outcome would be applied to all employees.
Following the determination of Mr. Tracey’s appeal the claimant submitted that it was a widely held view amongst the workforce that it was unnecessary to make an individual claim to the Labour Relations Commission, as a number of claims already submitted would be treated as test cases.
The respondent has consistently denied that they regarded Mr. Tracey’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 respondent contends that in any event, given that the determination of the Court in Mr. Tracey’s case was made on 31st January 2001, then the time period should run from that date.
Conclusions of the Court.
The Court is satisfied that when Mr. Tracey 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. Tracey’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. Tracey’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 decide the matter.
Finally, the Court notes that the claimant did not have the benefit of independent professional advice at the time, 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, determines to entertain all complaints appertaining to contraventions of the Act alleged to have occurred on or after 25th April 2000 (hereafter the relevant period).
The Claimant’s Holiday Record.
The leave year 2000 to 2001 ended on 31st March 2001. 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 respondent in respect of outstanding holidays on the cesser of his employment accrued within the permitted time limit under section 27 (4). 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 barred and, to that extent it is not cognisable by the Court.
Leave Year 2000 - 2001
The records show that in this period the claimant received 20 days leave, however, as the annual leave was not paid the claimant is entitled to redress for the loss of the annual leave.
In relation to public holidays, only those, which fell after 25th April 2000 and prior to 31st March 2001, can be taken into account in the claim before the Court. From the records, it appears that he did not receive an entitlement in respect of one public holiday in that period, which fell on 17th March 2001, consequently the claimant is entitled to redress for this loss.
Leave Year 2001 - 2002
The appellant confirmed for the Court that he received his full paid annual leave entitlement and public holiday entitlement for the leave year 2001 to 2002 and the records show that a termination payment in respect of outstanding holidays for the amount of £6119.04 was paid on 4th October 2001.
It is clear from the foregoing that the claimant did not receive his full entitlements in respect of both annual leave and a public holiday for the leave year 2000 - 2001. This complaint is, therefore, well founded.
As the claimant received his statutory period of leave but did not receive payment in accordance with the provisions of section 20 and 21 of the Act, then he is entitled to seek redress under the Act. 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.]
The Court measures the quantum which is fair and reasonable in all the circumstances at €3800 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 Jackie Byrne, Court Secretary.