FULL RECOMMENDATION
SECTION 7(1), PAYMENT OF WAGES ACT, 1991 PARTIES : BORD GÁIS ENERGY LTD (REPRESENTED BY ARTHUR COX) - AND - NIALL THOMAS DIVISION : Chairman: Ms O'Donnell Employer Member: Ms Doyle Worker Member: Mr Shanahan |
1. Appeal Of Adjudication Officer Decision No ADJ-00006952
BACKGROUND:
2. This is an appeal of an Adjudication Officer's Decision made pursuant to Section 7(1) of the Payment of Wages Act 1991. The appeal was heard by the Labour Court on the 31 October, 2017 in accordance with Section 44 of the Workplace Relations Act 2015. The following is the Court's Determination:
DETERMINATION:
Determination
This is an appeal by Bord Gais Energy Ltd against an Adjudication Officer’s Decision ADJ-00006952 given under the Payment of Wages Act 1991(the Act) in a claim by Mr Thomas that he suffered an unlawful deduction from his wages when he was not paid his 2016 bonus. The Adjudication Officer found in favour of the workers claim and directed that the Bonus be paid as soon as is practicable.
In this Determination the parties are referred to as they were at first instance. Hence Bord Gais is referred to as the ‘Respondent’ and Mr Thomas as ‘the Complainant’.
Background
The Complainant is a former employee of the Respondent. He ceased employment with them on 6th January 2017. The Respondent operates a Performance Related Award (PRA) scheme and any payments arising from that scheme are normally paid in the February following the year under assessment. One of the requirements of the scheme is that in order to receive an award you must still be in employment on the date that payment is to be made. The date of payment can vary because the scheme includes a number of factors such as corporate performance and business unit performance. The payments in previous years have been made in mid-February or early March. The complainant believes that excluding people who have resigned from receiving a payment is unfair and discriminatory particularly as pro rata payments are made to people who retire or commence work during a review period. The Complainant worked for the full year of the review January 2016- December 2016. He left the employment in January 2017 and therefore did not receive any payment under the PRA scheme
Complainant’s case
The Complainant’s case is that he is entitled to the bonus for 2016 and that the non- payment of same by the Respondent was an illegal deduction from his wage and a breach of the Act. The scheme allows for payment to workers who retire, or are on long term sick leave on a pro rata basis and the same formula should apply to a worker who resigns. He believes that clause 61 of the “Bord Gais Introduction of a Market Bases Reward Model FAQ’s” is unfair and discriminatory.
The Complainant also argued that the respondent did not fully comply with the scheme themselves when they asked him and the rest of his business unit to write their objectives retrospectively therefore they have the flexibility to deviate from the scheme if they want.
Respondent’s case
The Complainant has been with the company for a number of years and during that period he was promoted on a number of occasions. On each occasion he was promoted it was a contractual requirement that he participate in the PRA scheme. It is not disputed by the Complainant that he was familiar with the requirements of the scheme. Therefore he would have known when he handed in his notice with a termination date in early January that he would not qualify for the PRA payment even though his performance was assessed for that period.
It is the respondent’s position that the Complainant’s contract clearly states that payment of the PRA is solely at the discretion of the company and is dependent on compliance with the criteria established by the Company. The requirement to be still in employment at the time of payment of award is one such criteria.
The Respondent in support of their argument citedSullivan v Department of Education [1998] 9 E.L.R. 217where “payable” was defined to mean “properly payable” and argues that the PRA only became properly payable if you were still in employment at the time of payment or were covered by one of the exemptions in the scheme.
They distinguished this case from the case ofCleary & Ors v B&Q LTD [2-16] 27 ELR 121on the basis that the respondent in that case was relying on a general variation clause. Whereas in this case the Complainant did not meet one of the criteria of the scheme.
The applicable law
Section 5 of the Payment of Wage Act 1991 deals with regulation of certain deductions made and payments received by employers, section5(6) states;
- “Where—
- (a) the total amount of any wages that are paid on any occasion by an employer to an employee is less than the total amount of wages that is properly payable by him to the employee on that occasion (after making any deductions therefrom that fall to be made and are in accordance with this Act), or
(b) [….]
- (a) the total amount of any wages that are paid on any occasion by an employer to an employee is less than the total amount of wages that is properly payable by him to the employee on that occasion (after making any deductions therefrom that fall to be made and are in accordance with this Act), or
There was no dispute on the facts of this case. Both parties accepted that one of the criteria attaching to the PRA scheme was, that to benefit you must be in employment at the payment date. Nor was it disputed that the Complainant’s contract set out the circumstances in which the PRA became payable including the following phrase “…your eligibility for such a PRA payment in any year shall be considered and determined in accordance with the criteria established by the company”.
The question that arises is whether, or not the PRA payment was properly payable to the complainant. In considering that question the Court places considerable weight on the fact that the complainants contract sets out the eligibility requirements for payment of the PRA and that the Complainant confirmed in evidence that he was aware that one of the criteria of the scheme required that he be in employment on the date of payment.
Conclusion
In all the circumstances of this case and on the evidence before it the Court is satisfied that the Complainant did not meet the criteria to be eligible for a payment under the scheme. Therefore, the bonus arising from the PRA scheme was not “properly payable” and no contravention of the Act occurred.
Finding
The within appeal is allowed and the decision of the Adjudicator is set aside.
Signed on behalf of the Labour Court
Louise O'Donnell
8 November, 2017______________________
CCDeputy Chairman
NOTE
Enquiries concerning this Determination should be addressed to Ceola Cronin, Court Secretary.