EMPLOYMENT APPEALS TRIBUNAL
Alice Fuller Lavery
against the recommendation of the Rights Commissioner in the case of:
Cremur Heating Centre Limited
PAYMENT OF WAGES ACT 1991
I certify that the Tribunal
(Division of Tribunal)
Chairman: Ms. K. T. O'Mahony B.L.
Members: Ms M. Sweeney
Ms H. Kelleher
heard this appeal at Killarney on 14th September 2015
Appellant: Mr Pat O Donoghue, SIPTU, Liberty Hall, Dublin 1
Respondent : Mr Damien Cahill, IBEC, Knockrea House, Douglas, Cork
This case came before the Tribunal by way of two appeals by an employee against a recommendation of a Rights’ Commissioner reference r-140082-pw-13 and reference r-145770-pw-14. Both appeals were heard together. .
The decision of the Tribunal was as follows:
First Preliminary Issue
The respondent contended that following HSE v McDermott  IEHC 331 the appellant must nominate the date of the contraventions of the Act to which the appellant’s complaint relates, as required by section 6 (4) of the Payment of Wages Act 1991.
Determination on First Preliminary Issue
This issue does not arise in the case of appeal PW134/2014 because in her original complaint lodged with the Rights Commissioners Service on 22 November 2013, the complainant nominated 1 June 2013 as the date of the commencement of the contraventions to which her complaint related. Both appeals were heard together.
In the case of appeal PW210/2015 the original complaint lodged with the Rights Commissioners Service was not before the Tribunal on the day of the hearing or lodged with it within a reasonable time thereafter. Accordingly, the Tribunal will not consider that appeal.
Second Preliminary Issue The respondent contended that a reduction in wages is not a deduction from wages and accordingly does not come within section 5 of the Act.
Determination on Second Preliminary Issue
In Earagil Eisc Teoranta v Doherty and others  IEHC 347 due to the company’s financial difficulties it implemented a 10% cut in payroll. On the issue as to whether a reduction in pay constituted a reduction, Kearns P stated:
“The Court is also satisfied that the decision in McKenzie is distinguishable from the facts of the present case in a number of respects. The Court accepts the submissions of the respondents that the remarks of Edwards J. in relation to ‘reduction v. deduction’ issue were obiter. Furthermore, McKenzie related to the reduction in an allowance payable in respect of motor travel and subsistence. The definition of ‘wages’ in the 1991 Act expressly excludes any payment in respect of expenses incurred by the employee in carrying out his employment and so the finding by Edwards J. that the ‘RDF Allowance’ did not come within the scope of a deduction under the Act relates to an entirely different situation to that the present case where employees salaries were reduced. I am satisfied therefore that the Tribunal was entitled to proceed to consider the complaints on the basis that the reduction to the employees’ wages in the present case may have constituted a deduction in breach of the 1991 Act”.
The Tribunal notes Kearns P’s use of the word “may” in the last sentence of this paragraph and feels this may not be the final decision of the Courts on the issue as to whether a reduction in pay constitutes a deduction from pay bringing a complaint within the Act. However, following Earagil the Tribunal finds that a reduction in wages constitutes a deduction from wages contrary to section 5 of the Act. Accordingly, the Tribunal has jurisdiction to hear the appeal.
The appellant commenced employment with the previous owner of the respondent in January 1984. There was a change of ownership in May 2012. In January 2013 the respondent presented the appellant with a job description and the terms and conditions of her employment. It included what the company called an employment agreement which was to form an integral part of her contract of employment with the respondent. However, since the appellant objected to some aspects of that agreement she did not sign up to it. When it was altered to her satisfaction the Employment Agreement was signed by both parties 16 January 2013. The parties to the Agreement could vary its terms by agreement in writing.
Following discussions on the issue the appellant received a letter, dated 20 May 2013 from the operations manager stating that her salary was to be reduced by almost ten percent effective from the following week. By return letter the appellant objected to the decrease. None the less the respondent went ahead and made a deduction from the appellant from 1 June 2013.
She contributed to building up the company. She had a good relationship with customers and suppliers. A worker from JobBridge was taken on and got some of her work. Nine months on he became a full-time employee. She was on short-time from September to mid-November. Throughout the period there were changes to her role and scheduling was given to the JobBridge worker. She felt that part of her pay cut was going to pay him. He left some eighteen months later of his own accord. MD had asked her to work 40 hours for 35 hours pay. This led to a grievance that was resolved through mediation and she worked and was paid for 35 hours. The respondent now has eighteen employees as opposed to around twelve or thirteen in 2013.
The company was loss making in 2012 when he took over. He could not get money from the banks. He put a lot of his own money into the company and tried to sort something out with creditors and the landlord. He got a decrease in the rent. He took no salary for around eighteen months. Today he has fifteen on the books, two of whom are contractors. There is a history of short-time in the company. The JobBridge worker was a qualified engineer. He did scheduling as you need somebody who knows the business. He agreed that cutting her pay without her agreement was a breach of her contract of employment. The claimant was not the only one whose hours were cut. The reduction in the appellant’s salary was a temporary measure which hopefully could be rectified when conditions allowed. He accepted that this was a unilateral move. He now has 16 staff.
The Tribunal has already found that the reduction in the appellant’s pay constituted a deduction from wages contrary to section 5 of the Payment of Wages Act, 1991 (see above). Having considered the evidence and employment history of the claimant with the respondent the Tribunal varies the Rights Commissioner’s decision reference r-140082-pw-13 and awards the appellant the sum of €1,480 under the Act.
The appeal against the recommendation of a Rights’ Commissioner’s decision reference r-145770-pw-14 is dismissed. (See Determination on First Preliminary Issue, above.)
Sealed with the Seal of the
Employment Appeals Tribunal