FULL RECOMMENDATION
SECTION 7(1), PAYMENT OF WAGES ACT, 1991 PARTIES : AER LINGUS (IRELAND) - AND - COLIN MATCHETT (REPRESENTED BY FORSA) DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Marie Worker Member: Mr McCarthy |
1. Appeal Of Adjudication Officer Decision No ADJ-00008577.
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 27 April 2018 in accordance with Section 44 of the Workplace Relations Act, 2015. The following is the Court's Determination:
DETERMINATION:
This is an appeal by Mr Colin Matchett against a Decision of an Adjudication OfficerADJ-00008577 made under the Payment of Wages Act, 1991 (the Act) alleging that his employer Aer Lingus (Ireland) Limited had made an unlawful deduction from his wages.
The Adjudication Officer in his decision held that the complaint was not well founded.
For ease of reference the parties are given the same designation as they had at first instance. Hence Mr Colin Matchett will be referred to as “the Complainant” and Aer Lingus (Ireland) Limited will be referred to as “the Respondent”.
Background
The Complainant was employed as a Cabin Crew Member since 9thJune 2008. In 2014 he was promoted to a Senior Cabin Crew position. His letter of appointment provided details of his salary on promotion and stated that he was on point 2 of the Senior Cabin Crew Member (SCCM) scale. On receipt of his first wage he noticed that he was not being paid the stated amount. He queried the situation. Management adjusted his wages to the point 2 rate in accordance with the letter of appointment.
In October 2016, it was discovered by management that an error had been made and the Complainant should have been on point 1 of the scale from the date of his promotion. The Complainant was informed of this error and was furnished with details of the amount of overpayment made to him in error (€3,569.93). He was informed that this overpayment would be deducted from his wages over a period of 73 fortnights at a rate of €48.90 per fortnight.
Following representations from the Complainant, management agreed to reduce this amount and the Complainant was required to repay the sum of €1,289 over a period of 12 months. These repayments were paid in the period from 1stJanuary 2017 to 31stDecember 2017. The Union on behalf of the Complainant claimed that the Respondent had made an unlawful deduction of €1,289 from his wages.
Summary of the Complainant’s Case
Mr Michael Landers, F�RSA Trade Union, on behalf of the Complainant rejected management’s description of his placement on the second point of the SCCM scale as ‘an error’. He said that the SCCM in question was a new scale, consisting of five points, introduced for new entrants in 2009. He referred to a new scale having been agreed with SIPTU on behalf of new ground operations team members introduced at the same time, which placed operatives on point 2 of the scale on promotion.
Mr Landers also referred to the previous SCCM scale which applied prior to the new scale being introduced in 2009. He said that the previous scale always resulted in a placement above the initial point of the scale. Therefore, he submitted that it was reasonable for the Complainant to believe that on promotion to the new SCCM scale he would be placed on at least the second point, as notified to him in his letter of appointment, which he contends was a binding contract.
Summary of the Respondent’s position
Ms Elaine Mettler on behalf of the Respondent, stated that the policy within the Company is that on promotion to the position of SCCM, a Cabin Crew Member is moved to point 1 of the SCCM scale, similarly a SCCM who is on the Senior scale will move to point 1 of the Cabin Service Manager Scale. She stated that the reference to point 2 in the letter of appointment was an administrative error and was contrary to the established payroll policy for Cabin Crew. He should have been appointed on to the point 1 of the SCCM scale.
Ms Mettler said that the error was discovered in October 2016 when an audit was carried out. She said that taking account of the length of time that the overpayment had been paid a decision was taken to recoup the value of the overpayment for a 12-month period only (€1,289).
Ms Mettler said that the deductions made were in accordance with the Complainant’s contract of employment. Clause 5.2 states:-
- “The Company reserves the right to make deductions from payments due to you so as to reimburse sums due by you to the Company.”
Ms Mettler stated that the established Cabin Crew Scales are as agreed between the parties in 2009 which make no mention of assimilation to point 2 on promotion.
The Law
Section 5 of the Act deals with regulation of certain deductions made by employers, the relevant part are as follows:-
- S.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.
- (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
- (I) any overpayment of wages, or
- (i) the purpose of the deduction or payment is the reimbursement of the employer in respect of—
- (a) the deduction (or payment) is required or authorised to be made by virtue of any statute or any instrument made under statute,
The Act at Section 5 makes it clear that a deduction made by an employer is lawful only in circumstances where the employee has given his or her prior consent in writing. However, Section 5 does not apply to a deduction made in respect of an overpayment of wages, where the amount deducted does not exceed the amount due to the employer. Notwithstanding the provisions of Section 5 of the Act, the Court notes that Clause 5.2 of the Complainant’s contract of employment provides authority to the Respondent to make deductions where an overpayment has been made to him.
The Court must examine whether or not the actions of the Respondent in seeking reimbursement of an overpayment was appropriate in the circumstances. Therefore, the question arising for the Court in this case is whether or not point 2 of the SCCM salary scale was the appropriate salary point to pay the Complainant on his promotion to the Senior grade in 2014.
The Court notes that the agreement between the Company and SIPTU in respect of ground operations team members includes a clause on the assimilation of successful candidates on promotion from one grade to another. It states:-
- “On promotion staff move to the second point of appropirate Team Members scales, or the first point of the Team Supervisors scale.”
Management explained the rationale behind this arrangement and stated that as the difference between the maximum point of the Team Members scale and point 1 of the promotional scale was miniscule (less than €2.00 per week), it was specifically agreed with SIPTU that on promotion staff would move to point 2 of the promotional scale – except for Team Supervisors as there is a significant differential between the Team Members salary scales and the Team Supervisors’ salary scale.
The Court notes that there are considerable differences between the points on the Cabin Crew Members salary scale and the points on the SCCM salary scale and even more significant, it notes that there is no reference whatsoever to the assimilation of staff to point 2 of the Cabin Crew grades on promotion.
Having examined the agreed document setting out the salaries for three Cabin Crew grades in 2009 - Cabin Team Member; Cabin Team Senior; Cabin Team Manager, the Court notes that each scale has five points, the maximum point on each scale being lower than the minimum point on the next scale. Having examined the legacy scales furnished to the Court, the Court notes that the maximum point on each scale exceeds the minimum point on the next scale, thereby giving rise to a necessity to have an assimilation policy on promotion.
The Court is satisfied that taking all of the above into consideration, in the absence of any specific details on assimilation for the scales introduced in 2009, there were justifiable grounds for the Respondent’s assertion that on promotion, the appropriate salary to be paid to the Complainant was the first point of the SCCM scale. Therefore, it is clear to the Court that the salary set out in the letter of appointment (“point 2 of the SCCM scale”) was not the appropriate salary point to pay the Complainant on promotion and consequently must have been an error on the Respondent’s part, therefore, it was not unlawful for the Respondent to deduct the monies specified above.
In all of the circumstances, the Court finds that the Respondent, in making a deduction of €1,289 from the wages of the Complainant between 1stJanuary 2017 and 31stDecember 2017 was not in breach of the Act at Section 5.
Determination
Taking account of the Act at Section 5(1)(b), the Court finds that no unlawful deduction from the Complainant’s wages has taken place.
Therefore, the Court rejects the Complainant’s appeal and upholds the Decision of the Adjudication Officer.
The Court so Determines.
Signed on behalf of the Labour Court
Caroline Jenkinson
MK______________________
14 May 2018Deputy Chairman
NOTE
Enquiries concerning this Determination should be addressed to Mary Kehoe, Court Secretary.