ADJUDICATION OFFICER DECISION AND RECOMMENDATION
A Business Development Manager
A Gin Distillery Company
John Dunne Solicitor
Complaint/Dispute Reference No.
Date of Receipt
Date of Adjudication Hearing:
Workplace Relations Commission Adjudication Officer:
In accordance with Section 41 of the Workplace Relations Act, 2015 and Section 8 of the Unfair Dismissals Acts, 1977 – 2015 and Section 13 of the Industrial Relations Acts 1969following the referral of the complaints and dispute to me by the Director General, I inquired into the complaints and dispute and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaints and dispute.
The Respondent is a gin distillery business and commenced operating in 2016. The Complainant joined it as a Business Development Manager on the 3rd of October 2016.
The Complainant resigned from his position on the 17th September 2018.
Summary of Complainant’s Case:
The Complainant’s case is that he not paid wages or holiday pay.
His case is that he never received payment for the first seven months of employment with the Respondent. His contract stated that he would be paid monthly in arrears. The first payment of expenses he received was in January 2017. The first payment for wages he received was in May 2017.
He was hired as a business development manager. He did not receive a brief of what his exact role was but a general outline that it was to be in the area of driving sales, marketing events and social media.
The working environment only deteriorated as time went on. He was saving to purchase a house and he believed he would get paid eventually.
The complaint is of constructive dismissal as the Complainant left his employment on the 17th of September 2018. His chosen redress was compensation. The Complainant explained that he had taken up employment since the dismissal on the 8th of October 2018. This replacement employment paid a salary more than the salary being paid by the Respondent. The Complainant gave evidence that he left that employment at the end of March 2019 due to stress and anxiety issues related to these claims being brought. He has since taken up new work.
The Complainant’s case is that he resigned due to breach of contract on behalf of the Respondent. His expenses were not paid on time. In certain months they were two to three months late. He himself bought props and paid for fuel for the business. He alleged that the company vehicle had no tax or insurance for certain periods.
He explained how he went to festival events and had to build stands to sell the Respondent’s product. He was not provided with expenses to pay for supplies, so he would have to pay suppliers himself. At the end it was costing him money to work for the company.
The Complainant had to go to his GP for work related stress issues.
The financial issues with the Respondent delayed him in trying to get a mortgage.
When he raised these issues with the Managing Director (MD), the reply received was that it wasn’t that the MD didn’t want to give him the money that was due to him, but the money just wasn’t there. The MD advised that he had cashed in all his savings to try and keep the business afloat after a terrible period of trading.
The Complainant brought his issues to the MD in April 2018 but very little if anything changed between then and his resignation in September 2018.
The Complainant also had issues with the fact that the Respondent hired other people to work in the company. He thought that was well and good but not at the expense of him losing out on his wages. The Respondent hired a marketing manager but when queried by the Complainant, he was let go.
Evidence was provided of an email sent by the Complainant to the MD in March 2018. This was an email from the Complainant looking to set up a meeting with the MD about money that he was due and how he would be paid. The email went on to state that he was due expenses dating back to October 2017.
The email went on
“being honest, the stress I am under with the whole situation is getting out of hand, I have already been to the doctor about stress at work but because of commitments I made with suppliers I couldn’t fully take the time I need to clear my head. It’s having a serious effect on my personal life and I have just been sitting in at home because of it. I have never received any bonuses from what we agreed on initially which to be honest is a little disheartening. You also promised me a share with the company which I am yet to hear anything about.”
It went on how his role had changed to Head of Sales and new staff were brought in and he wasn’t included in any of these decisions or emails.
The email set out how the Complainant knew that the MD was up to his eyes with his day job and suggested that he should just be the owner of the company and let someone else run it. The email listed the grievances the Complainant had and ended
“I have commitments up until Friday, but I have agreed to meet with clients and suppliers and I won’t stop working, but after that I can’t keep up with the conditions I see myself under”.
The MD replied to this email answering the issues raised line by line. He advised him to take some time off as he wasn’t going to be doing himself any good if he was stressed out. He asked him “what was stressing him the most”.
After the emails the Complainant and the MD had a conversation over the phone. They went to a trade show in Germany and the Complainant was paid some expenses.
Despite the above, the Complainant submitted that the main issues were “just swept back under the carpet”.
This is an industrial relations claim in relation to a weekly allowance of €25.00 for lunches.
The Complainant’s case is that this was agreed at the start of his employment. On the second year of employment, the Complainant was advised that he couldn’t expenses his lunches anymore.
The Complainant also stated that on a night out he was encouraged to buy the Respondent’s own brand product as a form of marketing and that this was to be claimed back. These expenses were not reimbursed.
Summary of Respondent’s Case:
The Respondent’s case is that the Complainant was out of time to bring a claim under the Payment of Wages Act. Seven months payment were due in 2016 and up to May 2017. The Complainant had six months to bring the complaint and in exceptional circumstances would have had twelve months to bring the complaint.
The Respondent submitted that it was not a deduction but was instead a deferral which was different and not covered by the Payment of Wages legislation.
The Respondent submitted that these wages were deferred to an undefined date in the future. It was agreed between the parties that when the company could pay, it would pay.
On the claim of holiday pay and wages in 2018, I was provided with emails from the Respondent 17th of September 2018 which stated that the MD would revert back once he had spoken to the accountant on holiday pay, monies owed etc. I was also furnished emails from the Respondent requesting the return of stock.
The Respondent’s case was that the Complainant declined to accept the company debit card, any assistance or the services of a carpenter.
The Complainant didn’t raise a grievance with the managing director, he just resigned.
The Respondent stated that expenses properly vouched were paid. The Respondent submitted that the Complainant was claiming inappropriate things such as drinks and sweets and snacks that were not reimbursable.
Findings and Conclusions:
I have reviewed the contract of employment provided to me at the hearing. It contains clauses in compliance with the Terms of Employment (Information) Act 1994. In relation to remuneration, it states the amount of salary the Complainant was to receive, and it stated that it was to be paid monthly in arrears. The payment was to be made by cheque or directly into his bank account by credit transfer. There is no reference to deferral in the contract of employment.
There is a standard type clause in relation to deductions which are not relevant to this claim.
I accept therefore that the wages for the period 3rd of October 2016 to an unknown date in May 2017 were properly payable to the Complainant.
Under Section 41 (6) of the Workplace Relations Act 2015 a complaint should be presented within six months beginning on the date of the contravention to which the complaint relates. Under Section 41 (8) of the Workplace Relations Act 2015 I have limited power to extend time by a further six months where the failure to present the complaint within the initial six months was due to reasonable cause.
This complaint relates to a time well beyond the six-month period and even the extended period if reasonable cause was shown. It is not the case that the deduction of these wages continued post May 2017 and was ongoing.
The complaint is therefore out of time and is not well founded.
The Payment of Wages Act 1991 governs the method of payment of wages. The act is very specific. It protects workers against unlawful deductions of money properly payable to them. Section 5 regulates deductions made and payments received by employers
Section 5 (2) (b) (ii) sets out that the deduction must be of an amount that is fair and reasonable having regard to the circumstances (including the amount of wages of the employee).
The evidence presented to me by the Complainant is that he did not get paid for two weeks prior to his resignation in September 2018 and that he did not receive his accrued holiday pay on termination of his employment. These are in the sum of €1,666.50 for each claim totalling €3,333.00.
The failure to make any payment for wages to the Complainant cannot be considered fair and reasonable.
I find that this aspect of the claim is well founded and I award the Complainant the sum of €3,333.00 gross payment to be taxed in accordance with the normal pay roll deductions.
The email of the 14th of March 2018 from the Complainant to the Managing Director set out the Complainant’s position about the seven months of outstanding wages, the delay in getting paid expenses, the failure to receive any bonuses or his promised shareholding in the company. The response from the managing director was half hearted and I accept the evidence from the Complainant that the issues raised were swept back under the rug. He received some payment, but the outstanding issues continued.
I was furnished emails from the Complainant to the managing director dating back to September 2017 looking for his expenses to be paid. He also set out that his mortgage advisor needed all his paperwork and how it looked bad that he had taken out a loan for business expenses while he should be saving.
Much of the interaction between the parties was by text. The texts furnished to me show issues between the parties about payment of expense, claiming personal items as expenses, that the Respondent was losing money, disputes between the parties as to how the Respondent was spending its income on items considered unnecessary by the Complainant such as an unsuitable van, issues on accountability for cash taken by the business.
The email sent from the Complainant to the Managing Director setting out his resignation was the 17th of September 2018 at 9.37am. The Managing Director responded at 10.43 a.m. confirming receipt of the resignation and accepting it. He asked the question could the claimant elaborate on the alleged breach of contract. No further query was raised by the Managing Director.
Generally, I believe that the Respondent had a lax view of its contractual requirements with the Complainant. I appreciate that this was a start-up business, however there is no written agreement regarding the deferral of the wages or late payment of expenses. Overall, I prefer the evidence of the Complainant. The Respondent had a full-time role in a multinational company and this was a side venture for him. The Complainant did set out his grievances to the Respondent. The interaction between the parties was by remote means and they didn’t meet very often. The Complainant’s issues were raised over several months and years and the Respondent paid lip service to them but did nothing to address them head on.
Constructive dismissal is defined in s.1 of the Unfair Dismissals Acts 1977-2007 (the “UDA”) as:
“The termination by the employee of his contract of employment with his employer, whether prior notice of the termination was or was not given to the employer, in circumstances in which, because of the conduct of the employer, the employee was or would have been entitled, or it was or would have been reasonable for the employee, to terminate the contract of employment without giving prior notice of the termination to the employer”.
I accept that the Complainant has met the “Contract” test and he had an entitlement to resign on the basis that there has been a significant breach of contract by the Respondent going to the root of the contract (payment of wages and expenses).
I accept that resignation was not the first option taken by the Complainant and he explored outlining his grievances to the Respondent. However, they were not adequately addressed by the Respondent.
This is an industrial relations claim in relation to a weekly allowance of €25.00 for lunches.
I have reviewed clause 7 (iii) Expenses of the contract of employment. The Respondent stated that expenses properly vouched would have been paid. The Respondent submitted that the Complainant was claiming inappropriate things such as drinks and sweets and snacks.
I recommend that the Respondent pay the Complainant for expenses incurred by the employee in carrying out his employment for which receipts or vouchers are provided. As the Complainant is no longer in employment, I recommend a payment of €200.00 to cover outstanding expenses be paid to him.
Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint(s)/dispute(s) in accordance with the relevant redress provisions under Schedule 6 of that Act.
Section 8 of the Unfair Dismissals Acts, 1977 – 2015 requires that I make a decision in relation to the unfair dismissal claim consisting of a grant of redress in accordance with section 7 of the 1977 Act.
Section 13 of the Industrial Relations Acts, 1969 requires that I make a recommendation in relation to the dispute.
This complaint is well founded and I award the sum of €3,333.00 gross payment.
This complaint is well founded and I award the sum of €6,000.00 gross payment being financial loss incurred by the Complainant arising from his forced resignation. I have not received any evidence to attribute ongoing financial loss to the Respondents behaviour.
I recommend the sum of €200.00 is paid to the Complainant for outstanding expenses.
Workplace Relations Commission Adjudication Officer: