ADJUDICATION OFFICER DECISION
Adjudication Reference: ADJ-00012842
| Complainant | Respondent |
Anonymised Parties | A sales director | A digital media company |
Representatives |
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Complaint:
Act | Complaint/Dispute Reference No. | Date of Receipt |
Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991 | CA-00017143-001 | 30/01/2018 |
Date of Adjudication Hearing: 25/04/2018
Workplace Relations Commission Adjudication Officer: Catherine Byrne
Procedure:
In accordance with Section 41 of the Workplace Relations Act, 2015, this complaint was assigned to me by the Director General. I conducted a hearing on April 25th 2018 and gave the parties an opportunity to be heard by me and to present evidence relevant to the complaints.
The complainant attended on his own and without representation. For the respondent, the Chief Executive Officer, who is a company director attended and he was not represented.
Background:
The respondent company produces video content for Youtube. The complainant started with the business as a sales director on October 9th 2017 on an annual salary of €40,000. His employment was terminated on March 6th 2018, due to cash flow problems that could not be resolved. His complaint is that he was not always paid his wages on time, and before his employment was terminated, he was not paid at all for the month of February. |
Summary of Complainant’s Case:
From the commencement of his employment, the complainant said that there was a cash-flow problem at the company and staff were not being paid on time. The situation reached a crisis point in December, when he got no salary. This was resolved at the end of January 2018, when he was paid for December and January. He was dismissed on March 6th, but, at the date of this hearing on April 25th 2018, he had not been paid for February or for the days that he worked in March. |
Summary of Respondent’s Case:
At the hearing, the chief executive officer (CEO) explained that around the 23rd of each month, the company normally gets paid for the content it produces, based on the number of views achieved. In the last quarter of 2017, cash-flow problems began to emerge and the CEO explained the background to these and the efforts he made to try to bring money into the company. A payment expected from one of the company’s main clients failed to arrive on December 19th 2017. The CEO said that he wasn’t alerted in advance to the fact that the payment would not be transferred and this impacted on the business’s ability to manage its liabilities, and particularly its obligations to pay employees. By the end of January 2018, having secured a director’s loan and with a payment from another client, employees were paid for the month of December and January. However, by February, there was still no payment in sight from the main client, and in March, the directors decided to sell the revenue-generating part of the business. The staff were informed of this on March 6th. At the hearing, the CEO said that the company’s total liabilities are manageable from the funds owed by the main client or, from the sales proceeds of the part of the business that is for sale. While he was not in a position to confirm exactly when the employees would be paid, he said that he intends to meet his obligations to pay outstanding wages and redundancy payments. |
Findings and Conclusions:
Findings In the case under consideration here, there was no disagreement about the fact that wages were not paid on time in December 2017 and that no wages have been paid in respect of February and March 2018. I accept that evidence of the CEO, when he said that he was making efforts to get the money to pay wages, and to this end, he has conceded that a part of his company will have to be sold. For this complainant, he started work with the respondent in October 2017 and his evidence at the hearing showed that he was optimistic and committed to the company and to contributing to its success. For most of his tenure however, he was concerned about getting paid. This is an unacceptable predicament for any employee to find themselves in. It undermines the trust that an employee is entitled to have in their employer and distracts from the work that the employee is employed to do. The Legal Framework Section 5(1) of the Payment of Wages Act 1991 provides that an employer “shall not make a deduction from the wages of an employee,” unless the deduction is regulated by Statute (for example, PAYE, PRSI and USC), agreed in the contract of employment or consented to in writing by the employee. Section 6 of the Act, at sub-section (b), provides that the failure to pay wages when they fall due “shall be treated as a deduction” from wages: “Where – (b) none of the wages that are properly payable to an employee by an employer on any occasion (after making any deductions as aforesaid) are paid to the employee, then, except insofar 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 that occasion.” Conclusion It is evident that regardless of the efforts of the CEO, the shortage of cash at the company has resulted in an illegal deduction of wages of this complainant. More than at any other time of the year, the non-payment of wages in December is particularly inconvenient. Although December’s salary was paid at the end of January, the stress of not being paid and the pre-occupation with wondering when he would be paid is an unacceptable burden to place on an employee. When his wages were not paid in December and again in February and up to when he was dismissed in March, the complainant could have no confidence in the efforts of the respondent to manage what had become a monetary crisis. I have to conclude that the respondent has not complied with his obligations under the Payment of Wages Act 1991 in respect of an illegal deduction from wages. |
Decision:
Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint in accordance with the relevant redress provisions under Schedule 6 of that Act.
This complaint under Section 6 of the Payment of Wages Act 1991 is upheld and I have decided that the respondent is to pay the complainant €4,000 gross, subject to the normal statutory deductions. This is based on an approximation of five weeks’ gross pay. |
Dated: 4th July 2018
Workplace Relations Commission Adjudication Officer: Catherine Byrne
Key Words:
Non-payment of wages |