1.Appeal Of Adjudication Officer Decision No. ADJ-00028530 CA-00036644-004
2.This is an appeal of an Adjudication Officer’s Decision made pursuant to Section 7(1) of the Payment of Wages Act, 1991. The appeal was heard by the Labour Court on 25 February 2022 in accordance with Section 44 of the Workplace Relations Act, 2015. The following is the Court's Determination:
This is an appeal by Mr Alan O’Connor (the Complainant) against a Decision of an Adjudication Officer (ADJ-00028530 CA-00036644-004) under the Payment of Wages Act 1991 (the 1991 Act), dated 26 July 2021, against his former employer Accent Solutions. It is linked with PWD2217, PWD2218 and TU221.
The Complainant commenced work as a plumber/handyman in October 2006 with Dalkia. In 2009 the facilities management unit of Dalkia transferred to another company Mitie, and in line with the Transfer of Undertakings Regulations, the Complainant’s terms and conditions of employment transferred to Mitie with the sale. In 2015, the Complainants terms and conditions of employment transferred to Aramark, and subsequently to the Respondent in February 2019. His employment was terminated by reason of redundancy on 31 March 2020.
SIPTU, on behalf of the Complainant, submits that the Respondent breached the Act when it did not pay a bonus payment to the Complainant when his employment was terminated by reason of redundancy on 31 March 2020. It submits that the amount that is properly payable to him is €800.
The Respondent rejects the claim and submits that the Complainant had no entitlement to receive a pro-rata bonus payment when his employment was terminated in March 2020. The Complainant was entitled to an automatic annual bonus of 10% of his salary.
The annual bonus scheme applied to eligible staff who were in employment when bonuses were assessed in December each year. The Respondent does not pay pro-rata bonuses.
An employee must be in employment when the bonus is paid. It submits that there is nothing in the Complainant’s contract of employment to indicate that a pro-rata payment is an entitlement.
The applicable law
Section 5 (6) of the Payment of Wage Act 1991 states:
(a) the total amount of any wages that are paid on any occasion by an employer to an employee is less than the total amount of wages that is properly payable by him to the employee on that occasion (after making any deductions therefrom that fall to be made and are in accordance with this Act), or
(b) none of the wages that are properly payable to an employee by an employer on any occasion (after making any such deductions as aforesaid) are paid to the employee,
To ground a claim under the Act of 1991, the wages concerned must be properly payable. The matter for the Court to decide is whether or not an annual bonus paid to the Complainant was properly payable to him on a pro-rata basis when his employment terminated in March 2020.
It is accepted by both parties that the bonus was initially structured as a performance-related bonus, which subsequently became an automatic payment made to the Complainant each year. It was also accepted that the pay-out date changed from April to December each year.
While SIPTU relies on this second letter issued to the Complainant in April 2008 to demonstrate that payments could be awarded on a pro-rata basis during the year, the Court is unclear how that letter substantiates the payment of a bonus on a pro-rata basis during a year, in circumstances where the 23 October 2007 letter specifies that any bonus payment would be paid annually in April.
For the reasons set out above, the Court determines that the within complaint is not well founded.
The Decision of the Adjudication Officer is upheld.
The Court so determines.