INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 27(1), NATIONAL MINIMUM WAGE ACT, 2000
SLIEVE RUSSELL HOTEL PROPERTY LIMITED
(REPRESENTED BY O'SHEA BARRY, SOLICITORS)
- AND -
(REPRESENTED BY RICHARD GROGAN & ASSOCIATES, SOLICITORS)
Chairman: Mr Hayes
Employer Member: Ms Cryan
Worker Member: Mr Shanahan
1. Appeal of Rights Commissioner's Decision r-132625-mw-13/SR.
2. The Complainant in this case is employed by the Respondent as an Accommodation Assistant. On March 4th 2013, in accordance with Section 23 of the Minimum Wage Act 2000 (the Act) she requested a statement of her average hourly rate of pay to determine if it was in line with the National Minimum Wage which at that time stood at €8.65 per hour (S.I. No. 667/2006). The Respondent replied in writing on 8th March 2013 within the 6 week time limit set out in the Act. It stated that the Complainant was paid an hourly rate of pay of €9.09 per hour which included “a meal allowance deduction” of €0.57 per hour. It stated that her rate of pay in the reference period 8th February 2012 to 14th February 2012 was €8.52 per hour Monday to Saturday and €12.12 per hour on Sunday of that week together with an allowance of €0.57 per hour board allowance.
The Complainant submits that her rate of pay was not compliant with the National Minimum Wage.
She submitted a complaint to the Rights Commissioner under Section 24 of the Act. She argued that the deduction made by the employer in respect of board was not lawful as it was not declared for tax or social welfare purposes. She argued that it was against public policy to permit an employer to make a deduction from pay in respect of such a benefit in kind under the Minimum Wage Act while at the same time not declaring the payment to revenue for tax purposes.
- The Rights Commissioner decided that the deduction made by the employer was lawful and must be added to the hourly rate of pay which taken together brought her hourly rate of payment to at least €8.65 per hour and was therefore at least in line with the National Minimum Wage in force at that time.
The Complainant appealed against that Decision to this Court under Section 27 of the Act. The case came on for hearing before the Labour Court on 8th January 2014.
Findings of the Court
Pay under the Act is defined as
“pay” means all amounts of payment, and any benefit-in-kind specified in Part 1 of the Schedule , made or allowed by an employer to an employee in respect of the employee's employment;
Section 3 provides
3.—(1) The Minister may make regulations prescribing such matters as may be prescribed under this Act by the Minister, and may make such other regulations as are necessary or expedient for the purpose of giving effect to this Act (2) Regulations made under this section may contain such incidental, supplementary and consequential provisions as appear to the Minister to be necessary.
Section 19 of the Act states
19.—(1) Subject to Section 18 , all the pay of an employee in a specific pay reference period shall be included in calculating the employee's average hourly rate of pay in that period for the purposes of determining under this Act whether an employee is being paid not less than the minimum hourly rate of pay to which he or she is entitled in that period.
(2) Any payments or benefits-in-kind listed in Part 2 of the Schedule are not included as pay of an employee for the purposes of Subsection (1).
(5) For the purposes of this Section, the amount, if any, that shall be allowed for board with lodgings, board only, and lodgings only in calculating the hourly rate of pay of an employee in a pay reference period shall be the amount declared as such under Section 11 .
Schedule 1sets out what constitutes reckonable and non-reckonable pay for the purposes of the Act.
In relevant part it states
PART 1 — RECKONABLE COMPONENTS
1. Basic salary.
4. The monetary value of board with lodgings or board only or lodgings only, not exceeding the amount, if any, prescribed for the purposes of this item.
It is common case that the contract and company handbook documents issued to the Complainant by the Respondent contain no reference to deductions for meals it provides to employees. It is also common case that the Complainant was provided with and availed of such meals as provided. The Minister in S.I. No. 95/2000 set the maximum deduction in respect of 'board' to be taken into account when calculating the hourly rate for the purposes of the Act. It is common case that the Respondent did not exceed that amount in this case.
The sole argument advanced by Mr Grogan, Solicitor, on behalf of the Complainant was that the deduction for 'full board' was not declared for tax purposes and, as a matter of public policy, could not therefore be taken into account for the purposes of determining the hourly rate of pay under the Act.
The Court finds no support for that proposition in the Act. The Act provides that the reckonable components of pay include Basic Pay and "the monetary value of board with lodgings or board only or lodgings only, not exceeding the amount, if any, prescribed for the purposes of this item.".There are no qualifications placed on this obligation in the Act.
The question of compliance with tax and social welfare obligations are dealt with in Section 40 of the Act. It states: -
(1)Where a term or condition of the contract of employment concerned contravenes theTaxes Consolidation Act, 1997, or the Social Welfare Acts, the employee concerned shall, notwithstanding the contravention, be entitled to redress under thisActfor any under-payment of an amount of pay to which he or she would otherwise be entitled under thisAct.
(2)Where, in proceedings under thisAct, it is shown that a term or condition of a contract of employment contravenes theTaxes Consolidation Act, 1997, or the Social Welfare Acts, the Rights Commissioner, the Labour Court, an inspector or the Circuit Court, as the case may be, shall notify the Revenue Commissioners or the Minister for Social, Community and Family Affairs, as may be appropriate, of the matter.
In this case no term or condition of a contract of employment that contravenes the Taxes Consolidation Act, 1997 or the Social Welfare Acts, has been brought to the Court’s attention. The Complainant’s Contract of Employment states, “PRSI, PAYE and USC are automatically deducted from your pay.” The pay slips submitted to the Court show the Complainant’s hourly rate of pay as €8.52 per hour. It contains no reference to “board”. If PAYE, PRSI or USC are due to the state in respect of the value of the board provided by the Respondent to the Complainant the amounts outstanding to Revenue and the Department of Social Welfare is a matter that falls to be addressed by employer and the relevant authorities. There is no evidence that an underpayment, if any, is a term or condition of the contract of employment in this case.
The Court finds therefore that the Act contains no provision along the lines contended for by the Complainant.
Hourly Rate of Pay
The Court, in determining whether the hourly rate of pay of the Complainant is compliant with the National Minimum Wage in force at the relevant time is required under Schedule 1 to take take into account the combined value of the basic pay and the monetary value, determined by the Minister under the Act, of “board” provided by the employer to the employee.
The Court finds that, taken together, the combined value of basic pay and the monetary value of board in this case exceeds € 8.65 per hour.
Accordingly, the Court finds that the complaint is not well founded and affirms the Decision of the Rights Commissioner.
The Court finds that the complaint is not well founded and affirms the Decision of the Rights Commissioner.
The Court so determines.
Signed on behalf of the Labour Court
15th January, 2014______________________
Enquiries concerning this Determination should be addressed to John Foley, Court Secretary.