ADJUDICATION OFFICER DECISION
Adjudication Reference: ADJ-00024983
Fintan O'Reilly Fintan O'Reilly & Co
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: 16/01/2020
Workplace Relations Commission Adjudication Officer: Conor Stokes
In accordance with Section 41 of the Workplace Relations Act, 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 respondent provides capital equipment to the printing sector. The complainant was employed with the respondent from March 2016 until he resigned in July 2019. The complaint revolves around deductions made from the complainant last paycheck. It was agreed that there were deductions from the complainant’s final salary in the amount of €3076.64
Summary of Complainant’s Case:
The complainant’s case is that when he finished up with the respondent, €3076.64 was deducted from him unlawfully. This amount can be broken down into €2350 that the company claim relates to 3rd level fees that they paid on his behalf, €566.64 in respect of commission, and €160 in respect of benefit in kind. The complainant submitted that these amounts were not authorised by him at any stage and that he received no notice of any deductions from his salary.
In relation to the deduction of €2350, the complainant stated that although the respondent had paid the course fee for him, it was not entitled to recoup the amount as he was only finished the first year of a two-year course. In relation to the €566.64 commission, the complainant submitted that this was not recouped in an appropriate fashion and in relation to the benefit in kind of €160, this was only recouped as he gave his car back two weeks before his notice period expired.
Summary of Respondent’s Case:
The respondent’s case is that the amounts were lawfully deducted from the complainant and that when they tried to meet with the complainant to discuss the matter along with other issues relating to the end of his employment, he continually refused to agree to meet with them.
In relation to the deduction of €2350, the respondent argued that this was a course fee that it paid on behalf of the complainant and that he had signed an agreement when he sought payment of the fees that allowed the respondent to recoup this amount from him if he should leave the company within a year of completing the course.
In relation to the €566.64 commission, the respondent submitted that was an over payment of wages and it was entitled to recoup this amount. The respondent submitted that in relation to the benefit in kind of €160, they were required by the Revenue to recoup this amount and had already paid this over to the Revenue Commissioners. They also noted that they would provide the complainant with the paperwork showing these figures if he wished to pursue a reimbursement with the Revenue Commissioners directly.
Findings and Conclusions:
When considering this complaint, a number of questions arise - were the amounts deducted appropriate and was the manner in which the deductions were made reasonable?
The complainant resigned giving six weeks’ notice to the respondent. The respondent indicated that it only needed four weeks’ notice, and accordingly the complainant finished up two weeks earlier than he intended.
The complainant argued that the recouping of the fees was unlawful because he had no notice that the respondent would deduct the fees paid by them. In response the respondent noted that the complainant was on notice as he had signed a document when he asked the company to pay his fees. The document indicated that “In the event that I do not successfully pass the course exams or having passed the exams leave the company within 1 year of completion of the course I hearby authorise (the company) to deduct from my salary the amount paid by the company of €2,350.”
The complainant submitted that he had only passed the first year of exams and as such had not passed the course exams. The complainant submitted that the course exams meant all the exams that the course contained. In response the respondent noted that its refund of fees scheme was carried out on a year to year basis and did not encompass the whole duration of the various courses it assisted its employees with.
Section 5(1) (b) and (c) of the Act regulates certain deductions and payments received by employers. These sections state
An employer shall not make a deduction from the wages of an employee (or receive any payment from an employee) unless—
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.
Section 5 (2) states that:
(2) An employer shall not make a deduction from the wages of an employee in respect of—
(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),
(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, and
Notwithstanding these arguments, the complainant argued that he was not on notice of the intention to recoup this amount. However, an email thread submitted by the respondent clearly indicates that there was an ongoing conversation between the parties on this very issue.
It was also submitted that the complainant declined to make himself available to discuss his final payments and the various issues that arose surrounding his resignation. The submission was not contradicted by the complainant.
However, arising from the imprecise nature of the wording contained in the refund of fees document, I find that that respondent was not entitled to recoup the fees it paid for the complainant’s 3rd level course.
The Payment of Wages Act 1991 contains a number of useful sections in relation to this complaint. The following definitions are contained in Section 1:
“wages”, in relation to an employee, means any sums payable to the employee by the employer in connection with his employment, including—
(a) any fee, bonus or commission, or any holiday, sick or maternity pay, or any other emolument, referable to his employment, whether payable under his contract of employment or otherwise, and
(b) any sum payable to the employee upon the termination by the employer of his contract of employment without his having given to the employee the appropriate prior notice of the termination, being a sum paid in lieu of the giving of such notice:
Provided however that the following payments shall not be regarded as wages for the purposes of this definition:
(i) any payment in respect of expenses incurred by the employee in carrying out his employment,
(ii) any payment by way of a pension, allowance or gratuity in connection with the death, or the retirement or resignation from his employment, of the employee or as compensation for loss of office,
(iii) any payment referable to the employee's redundancy,
(iv) any payment to the employee otherwise than in his capacity as an employee,
(v) any payment in kind or benefit in kind.
Accordingly, the benefit in kind element of €160 referred to the complaint is outside the scope of this investigation.
In relation to the commission element of €566.64, commission is included under the foregoing definition of wages. Section 5(a)(i)(I) of the Act states that: Nothing in this section applies to a deduction made by an employer from the wages of an employee, or any payment received from an employee by an employer, where the purpose of the deduction or payment is the reimbursement of the employer in respect of any overpayment of wages.
Accordingly, the deduction of commission overpaid was not unlawfully deducted.
In relation to the reasonableness of the deductions, the respondent tried to meet with the complainant to work through this situation. In circumstances where the complainant did not make himself available for this discussion, I cannot find the deductions from his last pay check to be unreasonable.
Having considered all the issues in relation to this case, I cannot find that the amount of €160 in respect of benefit in kind was unlawfully deducted. In respect of the overpayment of wages (in relation to the commission) of €566.64, I find that this amount was lawfully deducted. In relation to the €2350 deducted in relation to the recoupment of 3rd level fees, I find that this amount was unlawfully deducted.
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.
Having regard to my findings above, and in relation to the deduction of the amount in respect of the 3rd level fees, under Section 6(1) of the Payment of Wages Act, 1991, my decision is to award the complainant compensation in the amount of €1175.
Dated: 4th March 2020
Workplace Relations Commission Adjudication Officer: Conor Stokes
Deduction of wages, definition