SECTION 28 (1), ORGANISATION OF WORKING TIME ACT, 1997
BLACKROCK LEISURE LIMITED T/A BLACKROCK LEISURE
(REPRESENTED BY MS. SARAH JANE JUDGE B.L.
INSTRUCTED BY TIERNANS SOLICITORS)
- AND -
(REPRESENTED BY RICHARD H MC DONNELL SOLICITORS)
Chairman: Mr Geraghty
Employer Member: Ms Doyle
Worker Member: Mr Hall
1. Appeal Of Adjudication Officer Decision No. ADJ-00008267.
2. The Employer appealed the Decision of an Adjudication Officer to the Labour Court on the 17th October 2018 in accordance with Section 28(1) of the Organisation of Working Time Act, 1997. A Labour Court hearing took place on the 23rd July 2019. The following is the Determination of the Court.
Ms. Nulty, ‘the Complainant’, stated that she worked for Blackrock Leisure Ltd., ‘the Respondent’ from 2 September 2015 until 3 February 2017. This was disputed by the Respondent, who claimed that she was employed from 26 September 2016 .The Complainant raised a number of complaints regarding what she claimed as breaches of her rights under the Organisation of Working Time Act 1997, ‘the Act’.
The Complainant referred a case under the Act to the Workplace Relations Commission, (WRC). The Respondent did not attend the WRC hearing and the Adjudication Officer, (AO), found in favour of the Complainant and accepted that her rights had been breached under the Act.
Specifically, the AO found as follows;
1 That the Complainant worked 3 out of 4 Sundays and had not been paid a premium, contrary to s.14 of the Act
2 In the annual leave year 2016/17, the Complainant had not received her annual leave entitlements, (Ss. 19 and 23 of the Act)
3 Contrary to s.21 of the Act, the Complainant had not been given a day’s pay, a day off in lieu or a day off within one month of 4 Public Holidays that she had worked within the reference period.
Compensation was awarded for each of the breaches.
The Respondent appealed this decision to the Court.
The Complainant was employed as a cashier from 2 September 2015 until 3 February 2017. She was paid an hourly rate of €10.50 per hour, which was reduced unilaterally to €9.50 per hour from 9 January 2017. She worked 42 hours per week.
The Complainant was not paid a premium for Sunday work, although she worked three out of four Sundays every month.
The Complainant was not given her annual leave entitlement in the leave year 2016/17.
The Complainant worked Public Holidays in the reference period. None of the compensatory arrangements set out in s.21 of the Act were applied to her.
The Complainant did not receive her breaks, contrary to s.12 of the Act.
The Complainant was employed from 26 September 2016 to 3 February 2017.
The Complainant did not work three out of four Sundays, as claimed, and she did not work the Public Holidays concerned in the reference period.
The award in respect of annual leave was based on the incorrect assertion that the Complainant worked 42 hours per week. She worked 10 hours per week.
There must be a legal contract of employment between the parties if the Complainant is to be entitled to redress. If the Complainant’s version of events is favoured by the Court then the Complainant was aware that she would receive her wages in cash without deduction of income tax and was, therefore, fully complicit in the arrangement. In the case of a contract which is not entered into for an illegal purpose nor prohibited by statute, the performance of the contract to be unenforceable requires not just that it involves illegality but also that the employee actively participated in the illegality.
The case ofHayden v. Sean Quinn Properties Limited(1994) ELR 54is authority for the above proposition, (reference was made also to the ruling inHussein v The Labour Court (HC) (2014)).
Ms. Ann Connolly
Ms. Connolly stated that she was the Office Manager for the Respondent.
The witness stated that the Complainant worked 10 hours per week for the Respondent and that she commenced working for the Respondent in September 2016. She stated that the Complainant had started as a cashier and had helped out by emptying the machines and had assisted with events. She stated that the company employed three cashiers, each of whom worked 10 hours per week.
In respect of the various claims made by the Complainant, the witness stated as follows;
1 The Complainant never worked Bank Holidays
2 To the best of the witness’ knowledge, the Complainant never worked Sundays
3 As the Complainant only worked 10 hours per week, she did not have an entitlement to breaks
4 The Complainant received a cheque for €193.78 in respect of her holiday entitlements when she was dismissed
The witness was shown 2 photographs, one from 1 November 2015 and one from August 2016 from the Respondent’s Facebook page. Both showed the Complainant. The first showed a ‘Happy Halloween’ message from the Respondent and the second showed a ‘Thank you’ message from all the staff of the Respondent to all who came to the Respondent’s party. The witness confirmed that the Complainant was not in the photographs as a regular customer but she was unable to explain her presence. The witness also claimed not to recognise a number of those in the second photograph.
In response to a query on the attendance of the Director at the premises, the witness stated that the Director, Ms. McGarrity, was frequently on the premises alone.
Ms. Ann-Marie Nulty
Ms. Nulty is the Complainant.
The witness gave evidence that she was employed by the Respondent from September 2015 to February 2017. She said that she was appointed as a manager from August 2016. This involved, among other duties, putting a roster together. At all times there would be 2 or 3 cashiers on the premises.
The Complainant stated that she knew Mr. Gary Mullen to be the owner of the Respondent, who also owned similar businesses in Dublin, Newry and Dundalk.
The witness denied that she had only ever worked 10 hours per week. On the contrary, she stated that she worked 4 to 5 days per week with work days of up to 10 hours per day. She stated that the casino stayed open past midnight every night, with a cut off time of 4am.
The witness described how she had been called out one night to turn off the alarm after a break in.
The witness described how party events were held on Bank Holiday week-ends, Christmas and Halloween and that the photographs showing the staff in costume were photographs of these events.
With regard to claims made by her, the witness stated as follows;
1 She had been required to work Bank Holidays between September 2015 and February 2017 and had never received any additional payment
2 She had been required frequently to work Sundays for no extra payment
3 She worked a 42 hour week with no scheduled breaks
4 On occasions she worked double shifts of up to 16 hours per day
The witness denied that she had ever only worked 10 hours per week.
The witness stated that she had not claimed social welfare payments while working for the Respondent. She stated that she had repeatedly requested a contract of employment but had never received one. She stated also that she had been requesting pay slips for some time until they were provided for part of her earnings from September 2016.
Under cross examination, it was put to the Complainant that if, as she claimed, she was working full time from August 2015, then she had paid no tax and had benefitted accordingly up to September 2016, after which, she claimed, only part of her income was declared for tax, which also benefitted her. The Complainant agreed that she knew that she was liable to pay tax and said that she had sought pay-slips.
It was put to the witness that if, as she claimed, she worked full-time then her P60, which reflects her pay-slips, must be wrong. She was asked why, if this was so, she had not contacted her employer? She replied that she had not done so as she had left her employment.
It was put to the witness, and accepted by her, that she had no documentary evidence to support her claims.
The witness stated that, after pay-slips were introduced, she was given cheques for the amounts shown on the pay-slips and the remainder of her wages was paid in cash. Prior to that, all her wages had been paid in cash, which had been left in an envelope in the safe.
The Applicable Law
Organisation of Working Time Act 1997
Rests and intervals at work.
- 12.— (1) An employer shall not require an employee to work for a period of more than 4 hours and 30 minutes without allowing him or her a break of at least 15 minutes.
(2) An employer shall not require an employee to work for a period of more than 6 hours without allowing him or her a break of at least 30 minutes; such a break may include the break referred to in subsection (1).
(3) The Minister may by regulations provide, as respects a specified class or classes of employee, that the minimum duration of the break to be allowed to such an employee under subsection (2) shall be more than 30 minutes (but not more than 1 hour).
(4) A break allowed to an employee at the end of the working day shall not be regarded as satisfying the requirement contained in subsection (1) or (2).
- 14.— (1) An employee who is required to work on a Sunday (and the fact of his or her having to work on that day has not otherwise been taken account of in the determination of his or her pay) shall be compensated by his or her employer for being required so to work by the following means, namely—
( a) by the payment to the employee of an allowance of such an amount as is reasonable having regard to all the circumstances, or
( b) by otherwise increasing the employee’s rate of pay by such an amount as is reasonable having regard to all the circumstances, or
( c) by granting the employee such paid time off from work as is reasonable having regard to all the circumstances, or
( d) by a combination of two or more of the means referred to in the preceding paragraphs.
(2) Subsection (3) applies to an employee where the value or the minimum value of the compensation to be provided to him or her in respect of his or her being required to work on a Sunday is not specified by a collective agreement.
(3) For the purposes of proceedings underPart IVbefore a rights commissioner or the Labour Court in relation to a complaint that this section has not been complied with in relation to an employee to whom this subsection applies (“the first-mentioned employee”), the value or the minimum value of the compensation that a collective agreement for the time being specifies shall be provided to a comparable employee in respect of his or her being required to work on a Sunday shall be regarded as the value of compensation to be provided under this section to the first-mentioned employee that is reasonable having regard to all the circumstances:
Provided that if each of 2 or more collective agreements for the time being specifies the value or the minimum value of the compensation to be provided to a comparable employee to whom the agreement relates in respect of his or her being required to work on a Sunday and the said values or minimum values are not the same whichever of the said values or minimum values is the less shall be regarded, for the purposes aforesaid, as the value of compensation to be provided under this section to the first-mentioned employee that is reasonable having regard to all the circumstances.
(4) Unless the fact of such a value being so specified has come to the notice of the rights commissioner or the Labour Court, as the case may be, it shall be for the person who alleges in proceedings referred to in subsection (3) that a value of compensation of the kind referred to in that subsection is specified by a collective agreement mentioned in that subsection to show that, in fact, such a value is so specified.
(5) In subsection (3)“ comparable employee” means an employee who is employed to do, under similar circumstances, identical or similar work in the industry or sector of employment concerned to that which the first-mentioned employee in subsection (3) is employed to do.
(6) References in this section to a value or minimum value of compensation that is specified by a collective agreement shall be construed as including references to a value or minimum value of compensation that may be determined in accordance with a formula or procedures specified by the agreement (being a formula or procedures which, in the case of proceedings referred to in subsection (3) before a rights commissioner or the Labour Court, can be readily applied or followed by the rights commissioner or the Labour Court for the purpose of the proceedings).
- 19.— (1) Subject to theFirst Schedule(which contains transitional provisions in respect of the leave years 1996 to 1998), an employee shall be entitled to paid annual leave (in this Act referred to as “ annual leave”) equal to—
( a) 4 working weeks in a leave year in which he or she works at least 1,365 hours (unless it is a leave year in which he or she changes employment),
( b) one-third of a working week for each month in the leave year in which he or she works at least 117 hours, or
( c) 8 per cent. of the hours he or she works in a leave year (but subject to a maximum of 4 working weeks):
Provided that if more than one of the preceding paragraphs is applicable in the case concerned and the period of annual leave of the employee, determined in accordance with each of those paragraphs, is not identical, the annual leave to which the employee shall be entitled shall be equal to whichever of those periods is the greater.
(1A) For the purposes of this section, a day that an employee was absent from work due to illness shall, if the employee provided to his or her employer a certificate of a registered medical practitioner in respect of that illness, be deemed to be a day on which the employee was —
(b) carrying on or performing the activities or duties of his or her work.
- (2) A day which would be regarded as a day of annual leave shall, if the employee concerned is ill on that day and furnishes to his or her employer a certificate of a registered medical practitioner in respect of his or her illness, not be regarded, for the purposes of this Act, as a day of annual leave.
(3) The annual leave of an employee who works 8 or more months in a leave year shall, subject to the provisions of any employment regulation order, registered employment agreement, collective agreement or any agreement between the employee and his or her employer, include an unbroken period of 2 weeks.
(4) Notwithstanding subsection (2) or any other provision of this Act but without prejudice to the employee’s entitlements under subsection (1), the reference in subsection (3) to an unbroken period of 2 weeks includes a reference to such a period that includes one or more public holidays or days on which the employee concerned is ill.
(5) An employee shall, for the purposes of subsection (1), be regarded as having worked on a day of annual leave the hours he or she would have worked on that day had it not been a day of annual leave.
(6) References in this section to a working week shall be construed as references to the number of days that the employee concerned usually works in a week.
- 21.— (1) Subject to the provisions of this section, an employee shall, in respect of a public holiday, be entitled to whichever one of the following his or her employer determines, namely—
( b) a paid day off within a month of that day,
( c) an additional day of annual leave,
( d) an additional day’s pay:
- Provided that if the day on which the public holiday falls is a day on which the employee would, apart from this subsection, be entitled to a paid day off this subsection shall have effect as if paragraph (a) were omitted therefrom.
(2) An employee may, not later than 21 days before the public holiday concerned, request his or her employer to make, as respects the employee, a determination under subsection (1) in relation to a particular public holiday and notify the employee of that determination at least 14 days before that holiday.
(3) If an employer fails to comply with a request under subsection (2), he or she shall be deemed to have determined that the entitlement of the employee concerned under subsection (1) shall be to a paid day off on the public holiday concerned or, in a case to which the proviso to subsection (1) applies, to an additional day’s pay.
(4) Subsection (1) shall not apply, as respects a particular public holiday, to an employee (not being an employee who is a whole-time employee) unless he or she has worked for the employer concerned at least 40 hours during the period of 5 weeks ending on the day before that public holiday.
(5) Subsection (1) shall not apply, as respects a particular public holiday, to an employee who is, other than on the commencement of this section, absent from work immediately before that public holiday in any of the cases specified in theThird Schedule.
(6) For the avoidance of doubt, the reference in the proviso to subsection (1) to a day on which the employee is entitled to a paid day off includes a reference to any day on which he or she is not required to work, the pay to which he or she is entitled in respect of a week or other period being regarded, for this purpose, as receivable by him or her in respect of the day or days in that period on which he or she is not required to work as well as the day or days in that period on which he or she is required to work.
23.— (1) (a) Where —
(i) an employee ceases to be employed, and
- (ii) the whole or any portion of the annual leave in respect of the relevant period remains to be granted to the employee,
the employee shall, as compensation for the loss of that annual leave, be paid by his or her employer an amount equal to the pay, calculated at the normal weekly rate or, as the case may be, at a rate proportionate to the normal weekly rate, that he or she would have received had he or she been granted that annual leave.
‘ relevant period ’ means —
- (i) in relation to a cessation of employment of an employee to whom subparagraph (i) of paragraph (c) of subsection (1) of section 20 applies, the current leave year,
(ii) in relation to a cessation of employment of an employee to whom subparagraph (ii) of the said paragraph (c) applies, that occurs during the first 6 months of the current leave year —
(II) the leave year immediately preceding the current leave year,
- (iii) in relation to a cessation of employment of an employee to whom subparagraph (iii) of the said paragraph (c) applies, that occurs during the first 12 months of the period of 15 months referred to in the said subparagraph (iii) —
(II) the leave year immediately preceding the current leave year,
- (iv) in relation to a cessation of employment of an employee to whom subparagraph (iii) of the said paragraph (c) applies that occurs during the final 3 months of the period of 15 months referred to in the said subparagraph (iii) —
(II) the 2 leave years immediately preceding the current leave year. ]
- ( a) an employee ceases to be employed during the week ending on the day before a public holiday, and
( b) the employee has worked for his or her employer during the 4 weeks preceding that week,
the employee shall, as compensation for the loss of his or her entitlements undersection 21in respect of the said public holiday, be paid by his or her employer an amount equal to an additional day’s pay calculated at the appropriate daily rate.
(3) If an employee ceases to be employed by reason of his or her death, any compensation payable under this section shall be paid to the personal representative of the employee.
(4) Where compensation is payable under subsection (2), the employee concerned shall, for the purpose of Chapter 9 of Part II of theSocial Welfare (Consolidation) Act, 1993(which relates to unemployment benefit) and Chapter 2 of Part III of that Act (which relates to unemployment assistance), be regarded as not having been, on the public holiday concerned, in the employment of the employer concerned.
(5) In this section “ appropriate daily rate” and “ normal weekly rate” mean, respectively, the appropriate daily rate of the employee concerned’s pay and the normal weekly rate of the employee concerned’s pay determined in accordance with regulations made by the Minister for the purposes of this section.
- (3) A decision of an adjudication officer undersection 41of the Workplace Relations Act 2015 in relation to a complaint of a contravention of a relevant provision shall do one or more of the following, namely:
( b ) require the employer to comply with the relevant provision,
- ( c ) require the employer to pay to the employee compensation of such amount (if any) as is just and equitable having regard to all of the circumstances, but not exceeding 2 years ’ remuneration in respect of the employee ’ s employment.
Decision of Labour Court on appeal from decision referred to in section 27(3)
- 28. A decision of the Labour Court undersection 44of the Workplace Relations Act 2015 on appeal from a decision of an adjudication officer referred to in subsection (3) of section 27 shall affirm, vary or set aside the decision of the adjudication officer.
There was a direct conflict of evidence by the parties . The Court prefers the evidence of the Complainant. The Court was persuaded by the demeanour of the Complainant when giving her evidence and by the fact that the Respondent’s evidence lacked credibility. The Court is of the view that the suggestion that this enterprise could have functioned for up to 18 hours per day with so few staff, all working a mere 10 hours per week, is not logical or believable. The Court notes also the photographic evidence that appears to substantiate the Complainant’s claim to have been in the relevant employment on dates prior to the date which the Respondent claims to be the commencement date of the Complainant’s employment.
In the absence of any documentary evidence to support either version of events, the Court has to rely on its judgement regarding the credibility of the evidence given to the Court.
The second line of defence for the Respondent is that a contract whose performance is illegal is unenforceable. The legal principle was enunciated in a case from 1772 calledHolman v Johnsonin which Lord Mansfield summed it up as follows; ‘No court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act’.
As case law has developed, the courts have taken the view that much depends on the importance of the term that involves the illegality and the extent to which the person seeking to enforce the contract participated in the illegality.
InRed Sail Frozen Foods v Companies Acts (2007) ELR 246Laffoy J. noted the comments of Gibson J inHall v Woolston Hall Leisure Limitedas follows; ‘In cases where the contract of employment is neither entered into for an illegal purpose nor prohibited by statute, the illegal performance of the contract will not render the contract unenforceable unless in addition to knowledge of the facts which make the performance illegal the employee actively participates in the illegal performance. It is a question of the facts in each case whether there has been a sufficient degree of participation by the employee’.
The case ofHall v Woolston Hall Leisure Limited  EWCA Civ 170involved a situation where the employee negotiated a pay rise. She asked for £250 per week net of deductions and that was what she got. The pay slips which accompanied her wages however, showed gross pay of £250, deductions of £63.35 and a net sum of £186.65. She said that when she queried this she was told ‘this was the way we do business’. The Tribunal found that the employee was turning a blind eye to the illegality and that she knew the Inland Revenue was being defrauded and, in those circumstances, participated in the illegality.
The Court of Appeal disagreed with this finding. It said:“There was nothing illegal about Mrs Hall's contract when she was first appointed sous chef on 15thJuly 1994, or when it was varied by her promotion to head chef in or about September 1994 at an increased pay of £250 per week net of deductions. There is nothing necessarily wrong or illegal in agreeing to pay an employee a sum net of deductions: seeMiller v. Karlinski(1945) 62 TLR 85, 86 per du Parcq LJ cited inNewland v. Simons & Willer Ltd. ICR 521, 527D-E. After her pay increase, however, although Mrs Hall received £250 net as agreed, she noticed that her pay slips showed a gross pay of £250 and a net pay of £186.65, with deductions purportedly made of £63.35 per week. On querying this with the respondent she was told simply "It's the way we do business". So matters continued, evidently, for some 5 or so months. The Industrial Tribunal held that Mrs Hall was turning a blind eye to the fact, and knew, that the Revenue was being defrauded.
It is a fact that Mrs Hall continued to receive payslips and did not report her employers to any authorities. But, as Peter Gibson LJ has said, there was no positive duty on Mrs Hall to pay or do anything (cfRC v. Herd 1 WLR 1090), nor was she herself guilty of any unlawful conduct. Her continuing passive receipt of payslips, after her initial query, cannot in my view be regarded as making her a party to her employers' plan to deceive, or as amounting to participation in it such as to preclude her from enforcing her contract of employment.
I consider that the Industrial Tribunal and Employment Appeal Tribunal were wrong to regard Mrs Hall as involved in her employer's unlawful scheme in any way that disabled her under English law from enforcing her contract of employment, even if she had, by her present claim, been seeking to enforce it.”
In the Supreme Court decision ofQuinn -v- Irish Bank Resolution Corporation Limited (In Special Liquidation) & Ors  IESC 29Clarke J,said as follows, albeit obiter: “ the case ofLewis v. Squash Ireland  I.L.R.M. 363,can, I think fairly, be said to represent the orthodox position in this jurisdiction and has also been implicitly recognised by the courts.
The case concerned the alleged unfair dismissal of a director of the respondent company. The decision focused on a sum of €2,000 which the appellant director received annually in addition to his annual salary. This sum was treated by the company as an expense for the purpose of tax evasion, thereby defrauding the Revenue. The Tribunal, having distinguished the case from St. John Shipping, held the illegality did not render the contract of employment void, but that the illegality caused the contract to be unenforceable.
In the view of the Tribunal, public policy rendered the illegal contract unenforceable. The Tribunal considered, relying on the decision of the Tribunal inNewland v. Simons and Willer Ltd.(1981) I.C.R. 521, that the essential question is “Has the employee knowingly been a party to the deception on the Revenue?”. The Tribunal decided, on a subjective test, that the employee in question had been party to the deception.
Since then, the Unfair Dismissals Act has been amended by the Unfair Dismissals (Amendment) Act 1993 so that an employee now is, notwithstanding a contravention of the type which occurred in Lewis, entitled to redress under the Act in respect of his/her dismissal. This was observed by Laffoy J. inRe Red Sail Frozen Foods Ltd. (In Receivership)  2 I.R 361.
It was held that the amendment to the Unfair Dismissals Act 1977 did not impede an employee from successfully pursuing a claim under that Act. As regards holiday pay and arrears of wages, which were governed by the Protection of Employees (Employers' Insolvency) Act 1984, there was no such statutory provision and the common law rules on illegality were found to apply. However, the Department had adopted a pragmatic approach and made payments to the former employees on the basis of taxed payments to employees. Laffoy J. found that the Department made this decision either without regard to the issue of enforceability of the contracts of employment or, perhaps, was satisfied that no issue of enforceability arose. Laffoy J. held that it was lawful for the receiver to pay the arrears of wages and holiday pay to the Department in the circumstances. The test therefore is active participation in addition to knowledge. It is for the person seeking to rely on the illegality to prove knowledge and participation.
In the instant case, some comparison can be drawn with the circumstances of theHallcase. The Complainant was certainly aware of the fact that her income was potentially subject to income tax and she was aware that this income was not being declared. She gave evidence under oath, however, that she had repeatedly requested a written contract and pay slips. The Court finds her evidence on this to be credible. Therefore, the Court accepts that she made efforts to put her contractual relationship on a legal footing. Any legal obligations to make deductions of tax and social protection payments rest with an employer and no evidence was offered to the Court of any illegal act on the part of the Complainant.
Under cross examination, it was put to the Complainant that she was a beneficiary of any alleged illegality. However, the Court is of the view that the efforts made by the Complainant to change this situation illustrate the difficulties in which she found herself as an employee in circumstances where, it is alleged, her employer was not compliant with the legal requirements to make accurate returns to the State authorities. Both the power and the responsibility to do so rested with her employer and, as Gibson LJ noted in the case of Ms. Hall, there is no positive duty on the Complainant to pay or do anything in such circumstances.
It is worth noting again the significant observation in that judgement that the continued passive acceptance of the situation ‘cannot, in my view, be regarded as making her a party to her employer’s plan to deceive, or as amounting to participation in it, such as to preclude her from enforcing her contract of employment’.
It is a reasonable interpretation of Laffoy J’s judgement in theRed Sailscase to say that she did not demur from the broad approach adopted in theHallcase that the test in such cases depends on evidence of active participation in any alleged illegality and that knowledge, of itself, is an insufficient basis to render contractual obligations to be unenforceable. While there is no doubt in the instant case that the Complainant had knowledge, it is up to the Respondent to prove active participation. The facts , as outlined to the Court, do not support such an assertion.
In view of this consideration, the Court accepts that the Complainant is entitled to the protections of the Act.
The Court determines that the Complainant should be compensated, in accordance with s.27(3)(c) of the Act for each of the Respondent’s failures, as follows;
1 Compensation for the failure to pay a premium for Sunday work, contrary to s.14 of the Act-€1800
2 Compensation for failure to meet the requirements of the arrangements set out in s.21 of the Act in respect of Public Holidays-€1800
3 Compensation for breaches of Ss 19 and 23 of the Act in respect of annual leave entitlements-€1800.
The decision of the AO is varied accordingly.
Signed on behalf of the Labour Court
30 August 2019Deputy Chairman
Enquiries concerning this Determination should be addressed to Fiona McCarthy, Court Secretary.