ADJUDICATION OFFICER DECISION
Adjudication Reference: ADJ-00008886
Ciaran Campbell Mandate Trade Union
Declan Thomas IBEC
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: 01/08/2018
Workplace Relations Commission Adjudication Officer: Emer O'Shea
In accordance with Section 41 of the Workplace Relations Act, 2015 [, and/or Section 6 of the Payment of Wages Act 1991] following the referral of the complaint(s)/dispute(s) to me by the Director General, I inquired into the complaint(s)/dispute(s) and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint(s)/dispute(s).
Summary of Complainant’s Case:
The claimant has been employed as a deli assistant with the respondent since 1986.He is aggrieved with the removal of a 7.5% pay differential by the respondent.It was submitted that :
The afore-mentioned pay differential is as a consequence of roles, responsibilities and associated duties above and beyond that of a General Sales Assistant and at the time of removal by the respondent was equivalent to €55.73/week (Appendices 1 & 2 re confirming payslips) every fortnight.
The claimant started employment as a General Sales Assistant with the respondent’s outlet on the 1st March 1986. He is employed on a full-time basis of 39 hours/week. His current rate of pay is €14.31/hour (Appendix 2 re payslip). The claimant has been and continues to work in the respondent’s outlet.
Alongside the aforementioned pay arrangements, the claimant like many others in the respondent’s business and which was normal procedure, received a 7.5% pay rate differential on top of his hourly rate of pay for any Chargehand ‘covering’ duties that he was required to do whenever his Chargehand was absent from work, e.g. on annual leave, etc. This effectively amounted to a 4 weeks pay/annum at the higher rate of the 7.5% pay differential.
Like other related colleagues in the respondent’s business where there were designated individuals – referred to as No.2s -who attracted this rate of pay in such circumstances, the claimant was the designated individual for Chargehand cover for his area of work in the counters.
Prior to and for a period following 2001 the respondent introduced into its new and replacement stores the Section Manager role. For a number of years this role was in obvious ‘conflict’ with that that had already existed, namely the Chargehand role which received a 7.5% pay differential rate on top of the maximum point of the General Sales Assistant pay scale. As such, through a number of protracted negotiations, in 2006 and 2010 the Company and Unions finalised agreements - the Security of Hours/Earnings Agreement 2006 & Management Structure Agreement, 2010 (Appendices 3 & 4 respectively) - that presented amongst other things, a suite of options to those staff currently in the Chargehand role, and which provided for the non-replacement of a Chargehand in the event he or she left the business. The same agreement also provided monetary relief for those individuals designated to cover their respective Chargehands during their absence from work. This agreement as designed and in the main, witnessed the gradual erosion of the Chargehand role in the respondent’s business. This agreement applied to all the existing Chargehands in the respondent’s business, including the claimant’s store.
On the 5th June 2009 the claimant had an in-store local management/union meeting. Present at that meeting were the claimant, his Shop Steward, the then local store manager –
Mr JS and his local management representative – Ms DM. At this meeting, the claimant asked the Store Manager why his and another colleague’s Chargehand rate of pay was being removed. He was advised that they were not performing any managerial duties but when the claimant referenced another colleague – Mr MMcT (who has subsequently left the employment) was in receipt of this rate of pay, the Store Manager stated that Mr McT was carrying out managerial duties, eg product ordering and organising staff rosters. When the claimant advised that he was doing similar duties the Store Manager, after apparent conferring with management above him, then informed the claimant and his fellow colleague they would each receive the 7.5% rate of pay differential shared on a fortnightly basis until a Section Manager was appointed. As such they were to continue to perform the associated managerial duties.
When a Section Manager was appointed the claimant and his colleague continued to receive the payment in light of the fact that they were still performing the duties for which they were awarded the payment in the first instance. This payment was maintained through 3 successive Store Managers in the period 2009 to 2017. A recent redundancy package offer by the respondent saw the claimant’s colleague leave his employment but the claimant continued to receive the 7.5% pay differential on a fortnightly basis.
Particular to a similar and not unrelated situation involving another work colleague which required the exercising of the respondent’s grievance procedures in 2014, the respondent’s Employee Relations Manager, Ms .LK was moved to investigate the grievance at
which she outlined the respondent’s position on same and further the continued payment of the 7.5% pay differential to the respondent and a number of named work colleagues. This is contained in correspondence dated the 12th November 2014 (Appendix 5). Mandate’s return correspondence dated the 13th November 2014 is contained at Appendix 6 and is self -explanatory. Again as it was clear that the respondent signalled its intention – please see respondent correspondence held at Appendix 5 – to have in-house meetings with all the relevant individuals and the obvious impact of the respondent’s failings regards the aforementioned 2006 and 2010 Agreements, Mandate provided the necessary space and time for these meetings to take place. It is Mandate’s position that none of these stated meetings took place.
On the 1st December 2016 (Appendix 7 re meeting notes) the claimant was informed at a meeting with the Personnel Manager that, following an in-store employee and payroll audit and on foot of instruction by the respondent’s Store Manager, the 7.5% pay differential he was receiving every 2nd week would be removed within the next 2 weeks, but if he wasn’t happy with that it would be removed as and from January 2017. He was further informed that he was now the only individual receiving this pay differential and that it wasn’t in line with the 2006 Agreement. The claimant immediately invoked the respondent’s grievance procedures vis-à-vis Mandate correspondence dated the 1st December 2017 (Appendix 8). A related meeting then took place on the 12th January 2017. Following Mandate correspondence dated the 31st January 2017 (Appendix 9) requesting if the respondent was in a position to outline its findings on the grievance, a follow up meeting for the 17th February 2017 was notified (Appendix 10) to the claimant. Due to industrial action at that time Mandate wrote to the respondent (Appendix 11) requesting due postponement of this meeting. On the 26th April 2017 Mandate (Appendix 12) wrote to the respondent requesting that the postponed meeting should be suitably rescheduled. This meeting took place on the 30th May 2017, the agreed notes of which are held at Appendix 13. At this meeting Mandate informed the respondent of its intention to lodge an application for a Workplace Relations Commission (WRC) Adjudication Officer hearing for protective purposes, as the claimants pay had been unilaterally reduced from the end of January 2017 and potential timeframes were pending. This application was made on the 1st June 2017 (Appendix 14). On the 19th June 2017 Mandate wrote to the respondent regarding the outstanding matter of the grievance’s findings (Appendix 15). On the 12th July 2017 Mandate received from the WRC a ‘Written Statement from the Respondent’ (Appendix 16) as presented by the respondent’s representatives IBEC. Mandate’s response to the same is held at Appendix 17. On the 12th July 2017 Mandate again wrote to the respondent regarding the outstanding matter of the grievance’s findings (Appendix 18). Respondent correspondence dated 24th July 2017 regards its findings on the grievance is contained at Appendix 19.
Adjudication Officer, it is very clear that the respondent has, we assume in this particular store only and, for whatever particular reason unilaterally decided to step away from and outside what has been referenced in the 2006 and 2010 Company/Union Agreements particular to their management structures.
These same agreements provided for the removal of this pay differential, which if applied fairly and equitably in this store would have seen the pay differential removed completely, as were the agreement’s stated intention. In the case of the claimant this did not happen and did so for the period 2009 to 2017 in the full and repeated knowledge of the respondent…at its highest levels.
The Payment of Wages Act 1991, Section 5 at (1) states:-
‘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.’
The claimant never authorised the respondent to make the any deductions from his wages,let
alone the amounts that the respondent actually took and similarly there is no contractual
authorisation for the respondent to make the deductions as described.
And further at (2) of same said Section of the Act it states -
‘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,
(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,
(iv)in case the deduction is in respect of an act or omission of the employee, the employee has been furnished, at least one week before the making of the deduction, with particulars in writing of the act or omission and the amount of the deduction, ….’
It is evidently clear that there is nothing in the Payment of Wages Act 1991 including the
above stated parts of same Act that provides for the respondent to make the deduction it has
done in this case. In fact considering the same the respondent’s deductions are an obvious
breach of the law.
The respondent in 2009 entered into an agreement with the claimant and a number of his fellow colleagues that consequential of their duties and the fact that a new manager grade was not appointed for their particular spheres of work, the same would receive this payment as outlined. Even when the respondent appointed the requisite manager, there was still no attempt on the part of the respondent to alter the claimant’s role and duties within his workplace and he continued to be paid as was. The claimant through 3 successive managers and at Head Office level continued to receive this payment up to the end of January 2017. In December 2016 the claimant was made aware that this payment would be unilaterally withdrawn despite his clear opposition to any changes to his payments.
Given the foregoing, the payment cannot be represented as an oversight on behalf of the respondent as it was evidentially notorious, established and absolutely consistent for the said period and at all levels of the respondent’s management. Therefore in the absence of any expressed agreement between claimant and respondent on same, the former has a rightful expectation to receive this payment.
The respondent’s erroneous assertion that not only is the payment unjustified and unwarranted and thus the respondent is correct in removing it, but equally their stated intentions to seek re-imbursement of an overpayment is incredulous given their obvious contribution to the situation. If it was the case, and Mandate on behalf of the claimant contend that it is not, that an overpayment has been made then there is no conceivable logic to rule that the claimant should take the ‘hit’ for it. The claimant has always been of the view, aided and abetted by the respondent, that he was entitled to this payment and thus therefore cannot be held liable for a ruling that determines otherwise.
Mandate would draw the Adjudication Officer’s attention to pages 147 and 148 of Francis Meenan’s ‘Working Within The Law – A Practical Guide For Employers and Employees’ (Revised and Expanded Edition, 1999. Particular to the Payment of Wages Act 1991, these pages specifically refer to ‘Overpayment of Wages’ stating amongst other things the following:-
‘an overpayment of wages does not fall within the scope of the Act, so if an employee is overpaid wages in error, then it depends on whether it is a mistake of law or of fact. If the overpayment is a mistake of law, then the sun is not recoverable but if it is of fact, then the sum may be recoverable’.
Citing Avon County Council –v- Howlett (1983) IRLR 171, it is
‘held that that if an employer overpays and employee, the employer will be estopped from succeeding in the claim if the following conditions are satisfied:
1. The employer has led the employee to believe that they are entitled to treat the money as their own;
2. The employee receiving the money has in good faith altered their position as a result;
3. The overpayment was not caused primarily by the fault of the employee.
The Court intimated that that, if the employee still had the money in his possession, the decision might have been different.’
It is very clear that using the above decision the respondent should not be in a position to recover any monies it has consistently and regularly paid to the claimant.
That said Mandate contends that in the absence of any expressed contractual reason that demonstrates the claimant is not entitled to this payment, then the payment should continue as was. If this position is so ruled then the claimant is also entitled to a back payment of €114.46/month for the period February to date, i.e. 17 x €114.46 = €1945.82
Adjudication Officer, Mandate respectfully requests that you uphold the claimant’s complaint and thus recommend that the respondent retrospectively applies and maintains the 7.5% pay differential due to the claimant, reimbursing all entitled monies as outlined since the pay differential was removed.
Summary of Respondent’s Case:
(1) The Complaint
(1.1) Adjudicator, the complaint before you today relates to a claim by Mandate on behalf of the complainant in that the Respondent company unilaterally reduced the complainants wages whereby a Chargehand Allowance equivalent to 7.5 times his rate of pay was removed from him in January 2017. The Claimant alleges that as a result of same the Respondent has made an unlawful deduction from his wages contrary to the Payment of Wages, Act 1991. The Respondent refutes this claim in that the Claimant is paid the wages properly payable to him in accordance with his Contract of Employment and in full compliance with the said Act.
(1.2) The Claimant is currently employed in the Respondents store in Sligo and works as a General Assistant. The Claimant alleges that he is entitled to be paid a “Chargehand Allowance” equivalent to 7.5% above the General Sales Assistant maximum rate of pay.
(2) Background to the issue
(2.1) At one point in time the role of a Chargehand was a senior role in the Company in that it carried a management responsibility for a particular area of work within a store. From time to time colleagues would step up in some departments and would carry out temporary department chargehand relief duties for the permanent chargehand, for example when he/she was out on annual leave. For this they received a temporary 7.5% payment which was paid on top of the weekly pay 4 times per year. Colleagues who carried out this role were in receipt of a 7.5% ‘post of responsibility’ differential for managing their area and carrying out agreed roles and responsibilities (Appendix 1). From 2001, as Chargehands left the business and as the Company opened new stores, these Chargehands were replaced by Section / Line Managers.
(2.2) In 2006, the Company and the trade unions Mandate and SIPTU concluded the ‘Management Structures Agreement’ the purpose of which was to clarify the Store Management Structures in the company and in particular the role of Chargehands (Appendix 2).
(2.3) At that time it was agreed that as Chargehands performed the same duties as Section Managers that both roles would co-exist side by side as department managers. This agreement also clearly identified those colleagues who were acknowledged as permanent Chargehands, who received the 7.5% differential on a weekly basis, and who also were ‘number 2s’ to receive the payment four times a year (Appendix 3 – Permanent List, Appendix 4 – Number 2’s). The Claimant was one such ‘number 2’.
(2.4) In 2009 a temporary agreement was reached by the store manager at the time with 3 colleagues whereby they would carry out managerial duties for a period of time until a new Section Manager was appointed to the area they worked in. In acknowledgement of this they received a 7.5% differential payment on a bi weekly basis in the claimant’s case. It is not disputed by the claimant that an agreement was reached whereby he would receive a temporary payment until the appointment of a section manager into the department he works in.
(2.5) Due to an oversight when the store manager had left the store, and after the appointment of a new Section Manager, the Claimant continued to receive this payment in error resulting in an overpayment.
(2.6) Following the appointment of the Section Manager the claimant was not required to, nor did he do so, carry out managerial duties to entitle him to any additional payments. Since then the claimant does not carry out the role of a manager and is not entitled to be remunerated as if he did carry out the role of a manager.
(2.7) In 2010 the role of Chargehand ceased to exist in the Company following an agreement reached with the unions where the Company moved to one management team (Appendix 5). Despite the fact that the Chargehand role no longer existed, the colleagues who were on the named list of number 2’s as part of the 2006 Management Structures Agreement, were left as they were to continue to carry out the duties and responsibilities of stepping up to manage departments during holidays and therefore continued to receive a temporary 7.5% pay adjustment on those occasions.
(2.8) The weekly duties performed by the Claimant are consistent with those of the customer assistant role as outlined in the job description which supports same and for which the claimant is fully remunerated for. He carries out the same role as all customer assistants working on the counters area across all stores.
(2.9) Therefore, the claimant currently receives the wages that are properly payable to him in accordance with the Payment of Wages Act, 1991.
(3) Company’s Position
(3.1) The subject matter of this case first came to the attention of the respondent in March 2014 when Mandate Trade Union raised the issue regarding entitlement of this 7.5% pay differential in regards another employee of the Store. This matter eventually led to an Adjudication hearing before the WRC which was subsequently appealed to the Labour Court and returned in favour of the respondent company (referred to herein below and copy of the Labour Court decision). At that time a number of correspondences were exchanged between the respondent and Mandate Trade Union regarding the issue and a copy of said correspondences are attached hereto at (Appendix 6). The said correspondence sets out and explains how the issue of the 7.5% pay differential came about and in particular sets out the circumstances in which the complainant and another employee continued to receive the 7.5% pay differential for which they were not entitled. The attached letters clearly establish that the complainant was receiving this payment in error and Mandate were advised at that time that the payment would cease. The complainant and his representative were on notice of the overpayment from early 2014 despite the fact that the company had yet to cease the payment. The Complainant continued to receive this payment in error until it ceased in January 2017.
(3.2) At a meeting on 1st December 2016 the Claimant was advised by Mr. AH, Personnel Manager that this 7.5% payment would cease to be paid from the end of January 2017 and in accordance with same the Respondent ceased paying this 7.5% payment from the end of January 2017. Notes from the said meeting are attached hereto at (Appendix 7).
(3.3) The claimant through his trade union raised a grievance by way of letter also dated 1st December 2016 regarding the removal of the 7.5% pay differential for which he remained in receipt of (Appendix 8).
(3.4) A Grievance hearing subsequently took place on 12th January 2017 with Mr M McC who heard the grievance and a copy of the notes from the said hearing are attached at (Appendix 9).
(3.5) A further meeting took place on 30th May 2017 between the complainant and his representative Mr. Ciaran Campbell of Mandate and the Company. A copy of the notes from said meeting are attached at (Appendix 10).
(3.6) The Claimant then submitted his claim to the WRC under the Payment of Wages Act, 1991 on the 7th June 2017.
(3.7) On 26th July 2017, Mr McC issued his findings in relation to the grievance and provided that;
“I find that when the counters manager was appointed you were not required to carry out the managerial duties however you continued to receive the 7.5% payment in error. I find that this was an oversight on the stores behalf as when Mr Scully left the store he did not pass on the information to the new store manager in relation to the agreement he reached with you. You should not have continued to receive this payment from the date that the counters manager was appointed which was when you ceased carrying out any managerial duties…..”
“My overall findings in this matter based on your representations and the evidence gathered is that you were in receipt of a bi weekly payment of 7.5% that you were not entitled to which resulted in an overpayment. This is not a disputed matter as you accept that you continued to receive payment even though you do not and have not for a considerable period of time carried out managerial duties. I find that this payment was never intended to be a permanent adjustment but was provided as a short term recognition that you carried out managerial roles in full. The agreement was that you would receive the 7.5% differential payment until such time as a section manager was appointed to the relevant departments. The fact they you continued to receive this payment when a section manager was appointed was an oversight on behalf of the Company and therefore constitutes an overpayment….”
“Whilst I accept that the store did not act on this matter when it came to their attention through Ms K’s investigation it cannot be the case that this payment should continue due to this. I find that the stores decision to cease this payment was the correct decision so as to not compound the overpayment any further. I find that the store were fully entitled to cease this payment and recover any monies owed as a result of the overpayment. Furthermore I find you were given more than 1 weeks’ notice that the payment would cease.”
A copy of the letter issued to the complainant is attached at (Appendix 11). A copy of the respondents “Pay Arrangements Policy” is attached at (Appendix 12). The complainant was given the right to appeal the decision stemming from his grievance but to date has not done so.
(4.1) The Company does not accept this claim due to a number of factors including the fact that the Claimant does not carry out any managerial duties on a weekly basis for which would entitle him to any 7.5% pay differential. The weekly duties performed by the Claimant are consistent with those of the customer assistant role as outlined in the job description which supports same and for which the claimant is fully remunerated for.
(4.2) The claimant has not since 2010, and does not now, carry out management duties. Nor is he required to do so. The section manager in the area that the claimant works in as a customer assistant, has full responsibility of the counters which has consistently been the case.
(4.3) The Company/Union 2006 Management Structures Agreement provided for the removal of this pay differential and since 2010 the role of Chargehand no longer exists.
Furthermore, it was an oversight by the Respondent that the Claimant continued to be paid this 7.5% differential after such time as he was no longer entitled and this was essentially an overpayment by the Respondent Company for which the Claimant was not entitled. The pre 1996 contract to which he is a holder of is under review.
(4.4) It cannot be the case that the Respondent, through this oversight has to further pay the Claimant a 7.5% weekly differential for duties he does not carry out and in contravention of the Collective Agreements of 2006 and 2010 referred to above.
(4.5) It is the Respondents position that the Claimant is paid the wages that are “properly payable” to the Claimant in accordance with Section 5(6) of the Payment of Wages, Act 1991. Furthermore the Claimant is being remunerated in accordance with the 2006 and 2010 collective agreements between the parties.
(4.6) In the event the Adjudicator decides that the removal of the 7.5 % differential payment constitutes a deduction as opposed to a reduction then it is the Respondents position that such a deduction constitutes an “overpayment of wages” made by the employer to the employee for which the employer is entitled to recover as per Section 5(a) of the Payment of Wages, Act 1991. The Respondent is further of the position that although it is entitled to recover the money in accordance with the above provision it has to date chosen not to do so ahead of the pending case.
Section (5) (a) of the Payment of Wages Act provides;
Nothing in this Section applies to-
(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
(ii) the amount of the deduction or payment does not exceed the amount of the overpayment.
(4.7) Furthermore, it is the Respondents position that the “reduction” in the Claimants wages as and from the end of January 2017 is in accordance with the terms of the Collective Agreements referred to and that such a reduction does not fall to be regarded as a “deduction” made by the employer from the wages of the employee on this occasion and therefore, falls outside of the terms of the Payment of Wages, Act 1991.
(4.8) A similar issue was before the Labour Court on 25th April 2017 in regards a worker in the same Store. The decision of the Labour Court in that case is significant in that the Labour Court stated; “The Court is satisfied that the Claimant is being remunerated in accordance with the 2006 and 2010 collective agreements between the parties and can find no basis for concession of the Trade Union side claim”. A copy of the Labour Court decision in this case is attached at (Appendix 13).
(4.8) On behalf of the Respondent we respectfully request that the Adjudication Officer uphold the Respondent’s position in this matter and reject the Complainant’s claim under the Payment of Wages, Act 1991.
(4.9) The Respondent reserves the right to adduce any further or other grounds of defence and adduce all and any evidence at the hearing of this case before the Adjudication Officer.
Section 6 of the Payment of Wages Act 1991 requires that I make a decision in relation to the complaint in accordance with the relevant redress provisions under the Act
I have reviewed the evidence presented at the hearing and the comprehensive submissions made by the parties.
The company submitted documentation following the hearing which set out the duties and responsibilities of a customer assistant and I note that the higher level duties of stock ordering and rostering are not included in the list of duties.At the hearing , the claimant advised that he was continuing to do duties over and above his substantive grade of customer assistant although he acknowledged that they were “ stripped off him in 2016”.I note in the minutes of his grievance meeting that he acknowledged that ordering for the counters was removed from him in Sept. 2016 and that rostering ceased at an unclear date but he maintained “ I gave advice on rostering”.
I accept that the pay arrangements set out in the respondent’s terms of employment constitute terms of the claimant’s contract of employment and that they provide for the rectification of overpayment errors.
On the basis of the evidence presented , I accept the respondent’s contention that the claimant is not working beyond his grade and that accordingly he is currently in receipt of wages properly payable.
I note that subsection (5) of Section 5 of the Act specifically provides that
“ Nothing in this section applies to –
(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-
(1)any overpayment of wages …….”
Consequently , I do not accept that the respondent’s actions were in breach of the Act and accordingly , I do not uphold the complaint.
Workplace Relations Commission Adjudication Officer: Emer O'Shea