FULL RECOMMENDATION
SECTION 7(1), PAYMENT OF WAGES ACT, 1991 PARTIES : DEPARTMENT OF DEFENCE (MINISTER FOR DEFENCE) (REPRESENTED BY CHIEF STATE SOLICITORS OFFICE) - AND - BRENDAN LANE DIVISION : Chairman: Mr Hayes Employer Member: Ms Connolly Worker Member: Ms Tanham |
1. Appeal of an Adjudication Officer's Decision
BACKGROUND:
2. The Claimant appealed the Decision of the Adjudication Officer in accordance with Section 7(1) of the Payment of Wages Act, 1991. A Labour Court hearing took place on 28th March, 2018. The following is the Determination of the Court:
DETERMINATION:
This is an appeal by Mr Brendan Lane against a decision of an Adjudication Officer in which it was decided that a weekly deduction from his pay made by the Department of Defence did not constitute an infringement of the Payment of Wages Act 1991. The Complainant appealed against that decision to this Court.
Mr Lane is a member of the Defence Forces. He submits an amount of money is deducted from his pay each week for services that he does not receive. He submits that the deduction infringes section 5 of the Payment of Wages Act 1991.
The Relevant Regulations and Law
Defence Force Regulations S3 para 34 states:
(1)There shall be deducted from the pay of a soldier the sum of 24p per week which he is required to contribute towards meeting the following expenses incurred by the appropriate welfare authorities as prescribed in Defence Force Regulations Q.11:
1) The expenses of haircutting
2) Administrative expenses in connection with arrangements made for personal laundry services where feasible; and
3) The provision of sports equipment and such other articles and services as may be provided for his welfare, recreation and comfort.
This deduction does not cover the actual cost of laundering which shall be a matter for arrangement directly between the welfare authority and a soldier availing of the service.
(2) This deduction shall cease as from the pay day following that upon which the soldier proceeds on leave pending transfer to the Reserve Defence Force or discharge.
Section 5 of the Payment of Wages Act 1991 states:
5.—(1) An employer shall not make a deduction from the wages of an employee (or receive any payment from an employee) unless—
(a) the deduction (or payment) is required or authorised to be made by virtue of any statute or any instrument made under statute,
(b) the deduction (or payment) is required or authorised to be made by virtue of a term of the employee's contract of employment included in the contract before, and in force at the time of, the deduction or payment, or
(c) in the case of a deduction, the employee has given his prior consent in writing to it.
(2) An employer shall not make a deduction from the wages of an employee in respect of—
(a) any act or omission of the employee, or
(b) any goods or services supplied to or provided for the employee by the employer the supply or provision of which is necessary to the employment,
unless—
(i) the deduction is required or authorised to be made by virtue of a term (whether express or implied and, if express, whether oral or in writing) of the contract of employment made between the employer and the employee, and
(ii) the deduction is of an amount that is fair and reasonable having regard to all the circumstances (including the amount of the wages of the employee), and
(iii) before the time of the act or omission or the provision of the goods or services, the employee has been furnished with—
(I) in case the term referred to in subparagraph (i) is in writing, a copy thereof,
(II) in any other case, notice in writing of the existence and effect of the term,
and
(iv) in case the deduction is in respect of an act or omission of the employee, the employee has been furnished, at least one week before the making of the deduction, with particulars in writing of the act or omission and the amount of the deduction, and
(v) in case the deduction is in respect of compensation for loss or damage sustained by the employer as a result of an act or omission of the employee, the deduction is of an amount not exceeding the amount of the loss or the cost of the damage, and
(vi) in case the deduction is in respect of goods or services supplied or provided as aforesaid, the deduction is of an amount not exceeding the cost to the employer of the goods or services, and
(vii) the deduction or, if the total amount payable to the employer by the employee in respect of the act or omission or the goods or services is to be so paid by means of more than one deduction from the wages of the employee, the first such deduction is made not later than 6 months after the act or omission becomes known to the employer or, as the case may be, after the provision of the goods or services.
(3) (a) An employer shall not receive a payment from an employee in respect of a matter referred to in subsection (2) unless, if the payment were a deduction, it would comply with that subsection.
(b) Where an employer receives a payment in accordance with paragraph (a) he shall forthwith give a receipt for the payment to the employee.
(4) A term of a contract of employment or other agreement whereby goods or services are supplied to or provided for an employee by an employer in consideration of the making of a deduction by the employer from the wages of the employee or the making of a payment to the employer by the employee shall not be enforceable by the employer unless the supply or provision and the deduction or payment complies with subsection (2).
(5) Nothing in this section applies to—
(a) a deduction made by an employer from the wages of an employee, or any payment received from an employee by an employer, where—
(i) the purpose of the deduction or payment is the reimbursement of the employer in respect of—
(I) any overpayment of wages, or
(II) any overpayment in respect of expenses incurred by the employee in carrying out his employment,
made (for any reason) by the employer to the employee, and
(ii) the amount of the deduction or payment does not exceed the amount of the overpayment,
or
(b) a deduction made by an employer from the wages of an employee, or any payment received from an employee by an employer, in consequence of any disciplinary proceedings if those proceedings were held by virtue of a statutory provision, or
(c) a deduction made by an employer from the wages of an employee in pursuance of a requirement imposed on the employer by virtue of any statutory provision to deduct and pay to a public authority, being a Minister of the Government, the Revenue Commissioners or a local authority for the purposes of the Local Government Act, 1941 , amounts determined by that authority as being due to it from the employee, if the deduction is made in accordance with the relevant determination of that authority, or
(d) a deduction made by an employer from the wages of an employee in pursuance of any arrangements—
(i) which are in accordance with a term of a contract made between the employer and the employee to whose inclusion in the contract the employee has given his prior consent in writing, or
(ii) to which the employee has otherwise given his prior consent in writing,
and under which the employer deducts and pays to a third person amounts, being amounts in relation to which he has received a notice in writing from that person stating that they are amounts due to him from the employee, if the deduction is made in accordance with the notice and the amount thereof is paid to the third person not later than the date on which it is required by the notice to be so paid, or
(e) a deduction made by an employer from the wages of an employee, or any payment received from an employee by his employer, where the employee has taken part in a strike or other industrial action and the deduction is made or the payment has been required by the employer on account of the employee's having taken part in that strike or other industrial action, or
(f) a deduction made by an employer from the wages of an employee with his prior consent in writing, or any payment received from an employee by an employer, where the purpose of the deduction or payment is the satisfaction (whether wholly or in part) of an order of a court or tribunal requiring the payment of any amount by the employee to the employer, or
(g) a deduction made by an employer from the wages of an employee where the purpose of the deduction is the satisfaction (whether wholly or in part) of an order of a court or tribunal requiring the payment of any amount by the employer to the court or tribunal or a third party out of the wages of the employee.
(6) 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) none of the wages that are properly payable to an employee by an employer on any occasion (after making any such deductions as aforesaid) are paid to the employee,
then, except in so far as the deficiency or non-payment is attributable to an error of computation, the amount of the deficiency or non-payment shall be treated as a deduction made by the employer from the wages of the employee on the occasion.
Complainant’s Case
The Complainant acknowledges that the deduction at issue is made pursuant to a statutory instrument or an instrument made under statute namely Defence Force Regulations S.3. Pay and Allowances (Permanent Defence Forces) Second Edition. He acknowledges that those Regulations are made under the Defence Act 1954.
He submits however that he receives no benefits from those deductions and submits that as a consequence the deduction is contrary to section 5 of the Payment of Wages Act 1991.
Respondent’s Case
The Respondent submits that the deductions are made under an instrument made under the Defence Act 1954 and accordingly comes within the scope of s5(1) of the Payment of Wages Act 1991.
It further submits that this is not a deduction made in respect of goods or services supplied to or provided for the employee by the employer the supply or provision of which is necessary to the employment.
It submits that the purpose of the deduction and the application of the monies deducted are irrelevant and it is not a matter for the Labour Court under the 1991 Act to enquire into the purpose of the deduction or the application of the monies deducted.
It submits that the deducted monies constitute a contribution to the expenses incurred by the appropriate welfare authorities under sub-paragraphs (i), (ii) and (iii) of para. 34 of S(3) of the Defence Force Regulations.
It submits that the deducted monies do not constitute a contribution to the expenses incurred by non-commissioned officers or privates but expenses incurred by the appropriate welfare authorities. It further submits that the regulation does not provide each Non Commissioned Officer or Private must in fact receive benefits referred to at sub-paragraph (i),(ii) or (iii). It submits that the Air Corps Welfare Board has utilised the monies to defray expenses incurred by the Board in respect of laundry facilities and the provision of sports equipment and other articles and services provided for the welfare, recreation and comfort of members stationed in Baldonnell, including the claimant, as contemplated by sub-paragraphs (ii) and (iii) of para. 34.
Findings of the Court
The Court finds that the deductions at issue in this case come within the scope of section 5(1) of the Act being deductions authorised by an instrument made under statute namely Defence Force Regulation S3 para 34 made under the Defence Act 1954.
The Court finds that the deduction is not made in respect of goods or services supplied to or provided for the employee by the employer the supply or provision of which is necessary to the employment.
The Court further finds that the deduction at issue in this case comes within the scope of section 5(5)(c) of the Act of 1991 which states
c) a deduction made by an employer from the wages of an employee in pursuance of a requirement imposed on the employer by virtue of any statutory provision to deduct and pay to a public authority, being a Minister of the Government, the Revenue Commissioners or a local authority for the purposes of the Local Government Act, 1941 , amounts determined by that authority as being due to it from the employee, if the deduction is made in accordance with the relevant determination of that authority,
In this case the deduction is made in accordance with the Defence Force Regulations that are made by the Minister under the Defence Act 1954. The deducted Monies are paid to the Minister who transfers them to the Welfare Board to provide services to members of the Defence Forces in accordance with the terms of the Regulations.
It is not for this Court to enquire into the expenditure of those monies. The only matter for this Court is to determine whether the deductions that are made contravene section 5(1) of the Act of 1991.
Determination
Having considered the information before it the Court decides that the deductions at issue in this case do not contravene section 5(1) of the Act of 1991 and determines accordingly.
The appeal is not allowed. The decision of the Adjudication Officer is affirmed.
The Court so determines.
Signed on behalf of the Labour Court
Brendan Hayes
19th April 2018______________________
SCDeputy Chairman
NOTE
Enquiries concerning this Determination should be addressed to Sharon Cahill, Court Secretary.