ADJUDICATION OFFICER DECISION
Adjudication Reference: ADJ-00016521
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
Date of Adjudication Hearing: 14/12/2018
Workplace Relations Commission Adjudication Officer: Davnet O'Driscoll
In accordance with Section 41 of the Workplace Relations Act, 2015 following the referral of the complaint to me by the Director General, I inquired into the complaint and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint.
The Complainant was employed as a Pilot with the Respondent from 30th September 2016, and he left employment on 25th August 2018.
Summary of Complainant’s Case:
The Complainant was employed as a Pilot with the UK company and completed his training in 2015. He paid for his training as a Pilot on their existing aircraft which was very costly. In September 2016 the airline introduced new aircraft. When another employee refused to sign a new training bond for the new aircraft, he was made redundant.
The Complainant signed a training bond on 7 September 2016, as he thought he was staying in London. He was then told that his base was changing to Dublin. He received a P45 from the UK company and was told he would be issued with an Irish contract. He had been forced to move his base for the second time in 9 months.
The Irish contract does not mention any bond and as he had agreed to move to Dublin he believed the training bond did not apply.
He made it clear to the company he did not agree to the deduction from his salary when it was raised after he handed in his notice and rang HR about this. On termination, the Respondent deducted 3,431.62 from his wages without his consent.
Summary of Respondent’s Case:
The Complainant was employed as a Pilot with the Respondent from 18 August 2015. He notified the Respondent of his resignation on 25 May 2018 giving 3 month’s notice.
The Respondent planned to change the aircraft it flies which required training of the Complainant. The cost of this was 10,000 euro which was paid on behalf of the Complainant subject to a training bond. This was signed by the Complainant on 7 September 2016, it provides a scaled level of repayment in the event of the Complainant leaving his position within 3 years of his training. The agreement authorises the deduction from salary. It says the Pilot has considered and understood its terms and has sought independent legal advice where fit to do so.
The training was completed in January 2017. The Respondent reminded the Complainant of the monies due and the Complainant suggested it be deducted from his last salary. The Respondent did not agree and said they would facilitate the deduction being taken out of the July pay. Agreement was not reached on how this would be paid, and the Respondent had no option but to deduct the amount from the Complainant’s final pay.
The Respondent relies on S5 of the Payment of Wages Act 1991, and submits the deduction is provided for in the Complainant’s employment contract. The bond is described as a special amendment to the Complainant’s contract of employment. This was accepted on 7 September 2016 and subsequently in correspondence by the Complainant.
It is authorised by a term of the contract of employment, it is of a fair and reasonable amount. The manner of payment was in the Complainant’s hands, the Complainant had the benefit of training and the value of the deduction is not more than paid by the Respondent.
Findings and Conclusions:
I have considered the evidence given and the written submissions of the parties at the hearing.
The complaint is made pursuant to S6 of the Payment of Wages Act 1991. S 5 of the Act regulates deductions and provides:
S5(1) An employer shall not make a deduction from the wages of an employee (or receive and 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 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
(6) 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
(7) 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.
(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 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).
The Respondent made a deduction from the Complainant’s pay on 28th August 2018 of 3, 431.62 euro and relies on S5 of the Act that the deduction was in respect of training necessary provided to the Complainant.
S 5 (1) (a) of the Act does not apply in this instance.
S 5 (1) (b) and S5 2 (b) of the Act requires that the deduction is required or authorised by virtue of a term in the Complainant’s contract of employment included in the contract before and in force at the time of the deduction. The Complainant’s contract of employment from 2015 relating to his time in the UK does not contain any consent to deductions or payments from his wages or salary by the Respondent. At the time the Complainant signed the Bond (which is referred to as a special amendment to the contract of employment) on 7th September 2016, the Complainant was employed in the UK. The Complainant then received a P45 from the UK company. His base moved to Dublin. He understood the training bond was no longer applicable as he moved to a new company in Ireland.
The Complainant received a new contract of employment commencing on 30th September 2016. The 2016 contract contains a general authority to the Respondent to deduct overpayments from salary or wages including (which is not limited) unauthorised business expenses, overpayments of salary, holiday or sick-pay, failure to return company property. There is no reference to training costs. The Complainant subsequently received training for the new aircraft in January 2017.
S 5 (1) (c ) of the Act requires that in the case of a deduction the employee has given his prior consent in writing to this.
The provisions of S5 (1) (a) (b) and (c) of the Payment of Wages Act 1991 were noted not to be conjunctive by Mr. Justice Kearns in his judgement in Earagail Eisc Teoranta v Doherty & Ors  26 ELR 326.
I am not satisfied that the Respondent has complied with the provisions of S 5 (1) (b) and S5 (2) (b) of the Payment of Wages Act 1991, that the deduction was authorised by virtue of a term in the Complainant’s contract of employment before and in force at the time of the deduction, in light of the termination of employment of the Complainant from the UK company. Nor am I satisfied that the Complainant consented to the deduction of training costs at any time later. The Complainant’s 2016 employment contract does not authorise deduction of the training costs, nor specify the amount owed, nor any calculation method for deduction of the training costs to ensure this is fair and reasonable on termination of his employment.
Accordingly, I find the complaint is well founded. I direct repayment of 3,431.62 euro gross deducted by the Respondent to the Complainant, together with 2 weeks compensation for breach of the Act of 1,583.82, total 5,015.44 euro.
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.
I find the complaint is well founded. I direct repayment of 3,431.62 euro gross deducted by the Respondent to the Complainant, together with 2 weeks compensation for breach of the Act of 1,583.82, total 5,015.44 euro.
Workplace Relations Commission Adjudication Officer: Davnet O'Driscoll
Authorised deductions from wages, termination from company, authority to make deductions