EMPLOYMENT APPEALS TRIBUNAL
APPEAL(S) OF: CASE NO.
Colleen O'Neill – appellant1 PW254/2015
Racheal Mackey – appellant 2 PW251/2015
Patricia Tobin – appellant 3 PW250/2015
Marie Power– appellant4 PW249/2015
Pauline Clarke– appellant 5 PW253/2015
Frances Alcock – appellant 6 PW247/2015
against the recommendation of the Rights Commissioner in the case of:
Colleen O'Neill
Racheal Mackey
Patricia Tobin
Marie Power
Pauline Clarke
Frances Alcock
v
Kare Social Services – respondent
under
PAYMENT OF WAGES ACT 1991
I certify that the Tribunal
(Division of Tribunal)
Chairman: Ms F. Crawford B.L.
Members: Mr F. Cunneen
Mr D. Thomas
heard this appeal at Dublin on 20th November 2015
Representation:
_______________
Appellant(s) : Mr Ray Stanley
SIPTU, Health Division, Liberty Hall, Dublin 1
Respondent(s): Company representative
This case came before the Tribunal by way of six employees appealing the decision of a Rights Commissioner under the Payment of Wages Act, 1991, refs: r-144893-pw-14/DI, r-144894-pw-14/DI, r-144897-pw-14/DI, r-144898-pw-14/DI, r-144902-pw-14/DI, r-144904-pw-14/DI, r-144908-pw-14/DI.
The decision of the Tribunal was as follows:-
Appellant 2 was not present at the hearing.
The appellants in this case appealed the decision of a Rights Commissioner under the Payment of Wages Act, 1991. The Rights Commissioner found that cuts to the appellants’ wages were reductions rather than deductions and as such were not covered by the Act. The appellants argued that the Rights Commissioner relied on the High Court case of Michael McKenzie & another –v- The Minister for Finance & others [2010] IEHC 461 which focussed on deductions from travel and subsistence payments. The appellants argued that this case was erroneously applied to their claim where their pay was unilaterally cut from €15.05 per hour to €12.00 per hour in January 2014. The appellants argued that this had been a deduction rather than reduction of their wages and a breach of their contracts. The appellants’ pay was first cut from €15.85 to €15.05 in May 2012. The appellants believed that redundancies made in the office area had been replaced.
The respondent submitted that it is a stand-alone charity, with a voluntary board, which provides care services to people in the community. However, it receives a portion of its funding from the HSE and following the enactment of the Financial Emergency Measures in the Public Interest (No. 2) Bill, 2009, (FEMPI) the HSE funding was cut and ultimately it was instructed to reduce pay to its employees which it did in 2012. The company representative acknowledged that the employees may not have been informed that the pay cuts were as any result of the FEMPI regulations. She was not employed by the respondent at that time.
HSE funding has been reduced by 30% since 2009. The charity also saw donations from other areas fall year on year. A meeting was held a month in advance of the January 2014 pay cut to inform the employees. The pay cuts were not sufficient to avoid making nine positions redundant in late 2014.
The appellants’ contracts of employment included a clause which stated ‘[the company] reserves the right to amend your terms and conditions of employment from time to time. Any variation or change to your terms and conditions of employment will be notified to you in writing within one month of the date of the changes(s).’
Determination:
It is contended that the unilateral action regarding the deductions without consultation or prior written consent was in breach of the Payment of Wages Act 1991 (and in particular Section 5(1) (c) thereof).
Having regard to the decision of the High Court in Michael McKenzie & another –v- The Minister for Finance & others [2010] IEHC 461, the Tribunal adopts the principle that the Payment of Wages Act has no application to reductions in wages as distinct from “deductions”. The Tribunal is bound to follow this point of law of the High Court and therefore in the circumstances, the decision of the Rights Commissioner under the Payment of Wages Act, 1991 is upheld. The Tribunal feels sympathy for the appellants and appreciates the good work that the appellants undertake, but is bound by the case law at present.
Sealed with the Seal of the
Employment Appeals Tribunal
This ________________________
(Sgd.) ________________________
(CHAIRMAN)