Complainant

Respondent

Parties

Peter  Darcy

Verizon Services Ireland Limited

Representatives

Tiernan Lowey BL instructed by Áine Curran O'Mara Geraghty McCourt

MP Guinness instructed by Linda Hynes of  Lewis Silkin Ireland

Act

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

CA-00067776-001

29/11/2024

Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991

CA-00072495-001

17/06/2025

Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991

CA-00072495-002

17/06/2025

Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991

CA-00072495-003

17/06/2025

Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991

CA-00072495-004

17/06/2025

Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991

CA-00072495-005

17/06/2025

Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991

CA-00072495-006

17/06/2025

This matter is related to the decision in ADJ-00051493 concerning the same parties. The cases were heard together and both relate to an argument that certain payments were properly payable to the Complainant on the basis of his contract of employment.

The Complainant has been an employee of the Respondent since 2015 and is currently a Senior Director involved in the sourcing, negotiating and contracting of construction services of the Respondent’s telecom network in the US.

In October 2023 the Complainant was subject to a disciplinary process which related to non-compliance of his wider department with certain Respondent policies. The Complainant took ill and was on certified sick leave until mid-January 2024.

The Complainant’s contract does not entitle him to any set period of paid sick leave and provides that the The continued payment of salary during periods of absence for sickness or injury will be at the Company’s discretion.  

The Respondent continued to pay the Complainant for this first period of sick leave. The Respondent had a more detailed sick pay policy which provides that Additionally, the Company operates an enhanced discretionary Company Sick Pay Scheme. Payments under the Scheme are entirely at the discretion of the Company and employees have no contractual right to Company Sick Pay ……….Company Sick Pay will be exhausted after 26 weeks’ absence in any rolling 12 month period.

It is important to note that company sick pay will not be paid:  For any unauthorised absences.  If you fail to follow the procedure set out in this Policy. If you are subject to any stage of the Disciplinary Procedure (including but not limited to being under investigation for any reason whatsoever), the Performance Improvement Procedures (including but not limited to any informal stages) or any potential termination process.

After the Complainant returned to work he was subject to the disciplinary process and a final written warning issued on the 8th of February. The Complainant appealed this outcome but the sanction was upheld on the 22nd of March.

May 8th the claimant took ill again and remains on sick leave.  As of the 1st of July 2024, the Respondent has stopped paying the Complainant sick pay. As a result the Complainant’s car allowance and matching pension contributions also ceased.

The Complainant submitted a series of payment of wages act complaints spanning 8th of May 2024 to May 2025. As well as the above pay and benefits the Complainant also challenged a decision to pay him a reduced bonus payment in May 2025, referred to as a Short-Term Incentive. This is the annual payment which the 2024 payment is claimed as properly payable in ADJ-00051493.  

On the 10th of May 2023 the Supreme Court issued their decision in O’Sullivan v the HSE 2023 IESC 11 (“O’Sullivan”). In this judgement the Supreme Court determined that the HSE had suspended a hospital consultant in compliance with his contract. In interpreting the suspension clause of that contract the Supreme Court adopted the position set out by the UK Supreme Court in Braganza v. BP Shipping Limited [2015] 1 W.L.R. 1661 (“Braganza”). Braganza had established that where a clause in an employment contract gives the employer discretion to make certain decisions then this decision making function must be exercised in accordance with their implied obligation of trust and confidence and outlined criteria for considering these issues.  The Complainant has sought to rely on these cases in arguing that the payment of sick pay and other benefits as well as a bonus were properly payable to him under the payment of wages act (“the Act”).

The Complainant gave evidence under affirmation and his counsel made written and oral submissions on his behalf.

An overview of his evidence as it relates to the disciplinary process and reduction in his 2024 STI is outlined in ADJ-00051493.  At the start of that process the Complainant was on sick leave from October following an occupational health referral in December he was told that the extension of his paid sick leave was under review and he returned in January to address the outstanding disciplinary process. In Spring 2024 he was also out on paternity leave.  The disciplinary process concluded in March when the Respondent refused his appeal and failed to pay his full STI entitlement. He went on sick leave for stress and anxiety from the 8th of May 2024.

The Complainant understood that he would be paid if he was on certified sick leave even though the Respondent has discretion under the contract. He believed that there would be reasonable assessment of when that should cease. He points out that the 26 week limitation is not provided for in his contract and in any event the 12 month rolling period should reset at the expiration of 12 months.

He has been absent since the 8th of May and the impact of these events on his health have been huge. The Respondent ceased paying him from the 1st of July 2024. Although that decision was made in the middle of July the Respondent backdated their decision to the start of the month. The Respondent’s reason for withholding sick pay was set out in an email on the 17th of July Company. Though the Complainant had received sick pay for 22 weeks out of the 26 weeks provided for in their policy they had determined from the occupational health reports that that Complainant was on sick leave as a reaction to the disciplinary sanction he received. Their policy provides that sick pay will not be paid when you have an active sanction on record. It appears that the decided to end sick pay on the basis of both those issues.

He was never told that his pension contribution or car allowance might cease if he got a final written warning.

He had no notice that the company was considering withdrawing pay and he sought to challenge them on these issues in August 2024 and they did not reply until January 2025. Despite his disciplinary warning lapsing in February 2025 he is still on sick leave but none of these payments have been restored.  

The Complainant was also only paid 50% of his STI in March 2025. Even though he was on leave he was eligible to participate in the STI on the basis of his performance. He achieved his targets for the year in the 5 months he worked between January and May but only got an “achieving” rating. He believes he should have gotten “leading.” He has had no real clarity as to why, only ever met Beverly Finegan, the person who determined his rating, once by video call.  He wasn’t able to make submissions to her and he had no idea how she made the decision.

In the email where he was told what the email would be he was informed that it was because he was no longer in receipt of enhanced sick pay.

The Respondent’s counsel made detailed written and oral submissions. They submit that the Respondent has acted reasonably in deciding to pay the Complainant discretionary sick pay for 22 weeks.

Medical reports made it clear that the reason the Complainant continues to be absent on sick leave is that he was subject to a disciplinary sanction. When that became apparent the Respondent ceased sick pay. They were allowed to stop sick pay at any time by virtue of the contract of employment. It would have ceased to be paid four weeks later due to the policy limits.  

Ms Veronice Brady gave evidenced under affirmation.  She is a HR Business Partner and was the Complainant’s HR point of contact when his sick leave ceased.

Ms Brady outlined the Respondent sick leave policy and that it actually provided that sick pay would not be paid to an employee in the disciplinary process or in receipt of a sanction. At her discretion she kept the payment going to the Complainant during his absences spanning from October 2023 until July 2024.

They did notify him that they were issuing sick pay as a matter of discretion and were keeping that discretion under review. They sent the Complainant to occupational health and a report issued from this confirming that he should remain on sick leave. Ms Bradley was concerned that this report seemed to indicate that the Complainant’s illness was a reaction to the disciplinary sanction.

Their insurer also operates an early intervention service which involves their own review and assessment of the Complainant, their report issued and indicated that the Complainant’s absence was associated with the disciplinary sanction and more specifically the Complainant’s reaction to being under threat of sanction in October. On the basis of these reports Ms Bradly ceased exercising her discretion to keep the Complainant in receipt of paid sick leave.

With regards to the Complainant’s STI payment in 2025, which was associated with 2024, the Complainant had worked for such a small proportion of the year he was close to not even being rated. Their threshold is 3 months and he was just over that. It’s not feasible that he could have received top rating when he was not there to lead his team and their delivery of set goals.

Section 1 of the payment of wages act 1991 provides for a wide definition of wages to include any sums payable to the employee by the employer in connection with his employment.

Section 5 of the act prohibits deductions from wages except in specific circumstances and defines a deduction as the payment of less than was properly payable to an employee on a specific occasion.

As such an employer’s failure to pay benefits such as sick pay or performance bonuses can be pursued as deductions under this act so long as the employee can establish that they were properly payable to them on a specific occasion and were not. 

The Complainant’s complaints primarily relate to two different clauses in his contract of employment which he says entitles him to certain payments which were not made.  I have considered these separately below.

Sick Leave and Associated Benefits

Clause 7 of the Complainant’s contract provides that The continued payment of salary during periods of absence for sickness or injury will be at the Company’s discretion.

They have submitted a series specific complaints alleging that 11 months of discretionary sick pay are properly payable under this act alongside car allowance and employer pension contributions. The first 5 months are lumped together in single complaint and on the second day of hearing the Complainant amended that complaint to reflect an alleged deduction of €70,650 as opposed to €191,750 which is what is outlined in the claim form, it was also clarified that the deductions began in July 2024.  The rest of these sums are set out as separate complaints related to each month.

The Complainant’s car allowance is governed by a separate clause (9.3, which states the Respondent reserved the right to suspend and withdraw the car allowance) however it is clear that the allowance continued to be paid as part of his discretionary sick pay and was stopped with that payment. The Respondent also operates a defined contribution scheme with matching employer contributions and when the Complainant’s contributions stopped with his sick pay the employer contributions did also. There is no provision in that scheme or the relevant clause in the contract of employment clause (9.1) which would suggest that there was any unmatched payment which the Complainant would be entitled to. 

On a plain reading of the contract the Complainant has no basis to argue that the any of these payments are properly payable. However, the Complainant’s case is that as a result of the rationale outlined by the UK Supreme Court in Braganza the Respondent’s decision to cease his sick pay, car allowance and pension from the first of July 2024 was a breach of implied terms in his contract and all of these payments from July 2024 to May 2025 are properly payable under this act.

The UK Supreme Court in Branganza reviewed discretionary decisions taken by parties to contracts. The basis for this is set out from Paragraph 18 pf Lady Hale’s Judgement.

18. Contractual terms in which one party to the contract is given the power to exercise a discretion, or to form an opinion as to relevant facts, are extremely common. It is not for the courts to re-write the parties’ bargain for them, still less to substitute themselves for the contractually agreed decision-maker. Nevertheless, the party who is charged with making decisions which affect the rights of both parties to the contract has a clear conflict of interest. That conflict is heightened where there is a significant imbalance of power between the contracting parties as there often will be in an employment contract. The courts have therefore sought to ensure that such contractual powers are not abused. They have done so by implying a term as to the manner in which such powers may be exercised, a term which may vary according to the terms of the contract and the context in which the decision-making power is given.

19. There is an obvious parallel between cases where a contract assigns a decision making function to one of the parties and cases where a statute (or the royal prerogative) assigns a decision-making function to a public authority. In neither case is the court the primary decision-maker. The primary decision-maker is the contracting party or the public authority. It is right, therefore, that the standard of review generally adopted by the courts to the decisions of a contracting party should be no more demanding than the standard of review adopted in the judicial review of administrative action. The question is whether it should be any less demanding.

20. The decided cases reveal an understandable reluctance to adopt the fully developed rigour of the principles of judicial review of administrative action in a contractual context.”

From paragraph 24 of the judgement Lady Hale outlines the test as the Court would ultimately apply:

“ …….the test of the reasonableness of an administrative decision which was adopted by Lord Greene MR in Associated Provincial Pictures Houses Ltd v Wednesbury Corporation [1948] 1 KB 223, 233-234.

His test has two limbs: “The court is entitled to investigate the action of the local authority with a view to seeing whether they have taken into account matters which they ought not to take into account, or conversely, have refused to take into account or neglected to take into account matters which they ought to take into account. Once that question is answered in favour of the local authority, it may still be possible to say that, although the local authority have kept within the four corners of the matters which they ought to consider, they have nevertheless come to a conclusion so unreasonable that no reasonable authority could ever have come to it.”

The first limb focusses on the decision-making process – whether the right matters have been taken into account in reaching the decision. The second focusses upon its outcome – whether even though the right things have been taken into account, the result is so outrageous that no reasonable decisionmaker could have reached it. The latter is often used as a shorthand for the Wednesbury principle, but without necessarily excluding the former.

25. The parties in this case disagree as to whether the term to be implied into this contract includes both limbs. Mrs Braganza argues that the employer must “keep within the four corners of the matters which they ought to consider”, while the employer argues that its decision may only be impugned if it is a decision which no reasonable employer could have reached.

26. Mrs Braganza can pray in aid the approach of Mocatta J in The Vainqueur José. He held that the common law principles applicable to the exercise of a contractual discretion include fairness, reasonableness, bona fides and absence of misdirection in law (p 574). He later quoted (p 575), without Page 12 reservation, Lord Greene’s summary of the public law concept of reasonableness. There is nothing on Mocatta J’s judgment to suggest that only the second of those elements is applicable to the exercise of a contractual discretion. He did (at 574) contrast the contractual principles with the principles applicable to the exercise of a statutory discretion by Ministers of the Crown, but on the basis that, in addition, the Minister’s decision had to be consistent with the objects and other provisions of the statute in question, citing Laker Airways Ltd v Department of Trade [1977] QB 643.

……

29. If it is part of a rational decision-making process to exclude extraneous considerations, it is in my view also part of a rational decision-making process to take into account those considerations which are obviously relevant to the decision in question. It is of the essence of “Wednesbury reasonableness” (or “GCHQ rationality”) review to consider the rationality of the decision-making process rather than to concentrate upon the outcome. Concentrating on the outcome runs the risk that the court will substitute its own decision for that of the primary decision-maker.

30. It is clear, however, that unless the court can imply a term that the outcome be objectively reasonable – for example, a reasonable price or a reasonable term – the court will only imply a term that the decision-making process be lawful and rational in the public law sense, that the decision is made rationally (as well as in good faith) and consistently with its contractual purpose. For my part, I would include both limbs of the Wednesbury formulation in the rationality test. Indeed, I understand Lord Neuberger (at para 103 of his judgment) and I to be agreed as to the nature of the test.

31. But whatever term may be implied will depend upon the terms and the context of the particular contract involved. I would add to that Mocatta J’s observation in The Vainqueur José, that “it would be a mistake to expect [of a lay body] the same expert, professional and almost microscopic investigation of the problems, both factual and legal, that is demanded of a suit in a court of law” (577). Nor would “some slight misdirection” matter, at least if it were clear that, had the legal position been properly appreciated, the decision would have been the same. It may very well be that the same high standards of decision-making ought not to be expected of most contractual decision-makers as are expected of the modern state.”

On review of Braganza as well as the decision in O’Sullivan and of the text of this act I am not satisfied that the Complainant has established that he is entitled to any of these payments on the basis of his contract of employment and that they are properly payable under this act.

My rationale is outlined below and relates to a lack of clarity in the Complainant’s specific claims as well as a lack of clarity as to their relationship with the case law he seeks to rely on. For ease of reference I have outlined these issues below under distinct headings.

Specific Claims

The Complainant’s arguments as to what is properly payable under the act by virtue of the implied terms in Braganza vary. He submits that sick leave and associated benefits were properly payable for an unspecified reasonable period of time exceeding 26 weeks because the 26 week limit was outlined in a non-contractual policy. The Complainant has also argued that sick leave and associated benefits were properly payable up to the 26 week policy limit. The Complainant has also argued that paid sick leave and associated benefits were properly payable in line with the 26 week policy limit but that the 12 month rolling period provided for in that policy should restart afresh every 12 months while they continue to be out on sick leave. The Complainant has also supposed an entirely new benefit not contained anywhere in the contract where the Respondent should have invited him to make pension contributions from his bonus payments so that the employer could make matching contributions.

The Complainant seems to take the view that once they impugn, in general terms, a decision not to pay a discretionary benefit then the failure to pay that benefit is an unlawful deduction. They have also argued that it is for the employer to demonstrate that they have based a decision not to pay a benefit on a reasonable and transparent process which involved employee input. They do all of this by reference to the “Braganza duty” without much further elaboration.

I do not think that this approach is in line with the exercise undertaken by the Court in Braganza or indeed with any dispute as to the construction of a contract. It is for the Complainant to put forward their specific interpretation of the disputed clause with reference to the text of that clause. If they are invoking the implied terms referred to in Braganza I would think at a minimum a Complainant must detail what the “right matters” were which the employer failed to take into account in their reaching their decision and/or outline where the employer has strayed outside of these “right matters”.  Following such an exercise the Complainant should have a cogent position as to what decisions would have actually been arrived at by the employer if the text of the clause was interpreted on the basis of the implied terms they seek to invoke. It is that purported outcome which is potentially properly payable under this act.

I am not satisfied that the Complainant has formulated their claim in sufficiently clear and consistent terms in relation to the contract and this act.

For completeness I would note that despite the issues in applying the first limb of the Braganza test it is still open to the Complainant to establish the result of this decision not to pay a discretionary benefit was so outrageous that no reasonable decisionmaker could have reached that conclusion. However minimum terms and conditions of employment are regulated by statute and there are many reasonable employers who only pay what they are legally obliged to pay. In that context, the outcome of the Complainant not receiving further paid sick leave after being out sick for 22 weeks in a 12 month period cannot be said to be unreasonable.

Braganza and the Complainant’s case

After review of the decisions cited by the Complainant, i.e. O’Sullivan and Braganza, against these complaints a further issue arises which for the sake of transparency I believe I should highlight in this decision.

The Court in Braganza was considering the issue of whether BP had reasonably determined the cause of death of one of their employees in the course of deciding that his widow was not entitled to a death in service benefit. The Court in O’Sullivan was tasked with considering the reasonableness of the HSE’s conclusion that because of the conduct of a consultant there might be an immediate and serious risk to the safety, health or welfare of patients. Both matters concerned clauses with specific wording that required the employer to decide whether certain circumstances arose in order to determine whether payment or suspension would occur. The Courts in deciding to review these decisions recognised that there was an implied term in the contract which required a rational decision-making process which would exclude extraneous considerations and which would take into account those considerations which are obviously relevant to the decision in question. They did so in the context of a dispute as to the construction of the contract in which parties outlined different interpretations of specific clauses on the basis of this implied term.

The Complainant has sought to apply the above cases in order to argue that any and all discretionary benefits associated with a contract of employment are now arguably properly payable under this act. They argue that this is so even where the applicable clause simply provides that the benefit will be paid at the employer’s discretion and there are no conditions which need to be established in order to determine whether the benefit will be paid. This is exactly the structure of clause 7 of the Complainant’s contract which states: The continued payment of salary during periods of absence for sickness or injury will be at the Company’s discretion.  

This above is quite different to Clause 4 relating to the STI which resembles the types of clauses considered in Braganza and in the earlier cases discussed in that judgement. Those interventions were based on the principle that the Courts were required to give effect to the reasonable expectations of the parties when they entered into the contract. For instance, when a shipping contract contained a provision allowing an owner to determine that the ship should not sail to a dangerous port the parties reasonably expected the ship owner not to declare obviously safe ports dangerous. However, where an employment contract outlined that certain benefits are entirely discretionary without any conditions or circumstances constraining that discretion the question arises as to whether the parties reasonably expected that this meant anything other than the employer was entitled to decide whether or not those benefits would be paid without reference to any particular set of circumstances or decision making process. 

The Complainant has not drawn my attention to any specific precedent where Braganza has been applied to more similarly structured contractual clauses and as such it appears that there is a gap between the Complainant’s position and the case law he seeks to rely on.

I am of the view that it is not open to a non-court adjudicative body to develop a line of contract law in the course of a statutory investigation into payments which are supposedly properly payable under this act.

As such I do not find that the Complainant’s contract of employment provides that alleged deductions contained in CA-00067776-001 (as amended), CA-00072495-001, CA-00072495-002, CA-00072495-003, CA-00072495-004 (in so far as it relates to sick pay, pension and car allowance), CA-00072495-005, CA-00072495-006 were properly payable to him.

Short Term Incentive

Under complaint CA-00072495-004 the Complainant has alleged that €26,533.00 was unlawfully deducted from his wages in March 2025. This relates to the Respondent’s decision to pay him 50% of the Short-Term Incentive award he believes he was entitled to be paid for 2024.

The Complainant submits that his contract of employment provides a non-discretionary entitlement to an STI of 20% his base salary and as such that sum was properly payable under Section 5 of the act. 

Clause 4 of the Complainant’s contract provides that Annually, you are eligible to participate in Verizon’s Short-Term Incentive Plan, which is part of our Total Rewards package. Your Short -Term Incentive (STI) target under the plan will be 20% of your base salary, prorated based on your date of hire. Actual STI awards will vary depending on our business performance and your individual performance. STI awards are determined at the end of the calendar year and paid in the first quarter of the following year.

The Respondent submits that the sum sought by the Complainant was never properly payable under the above wording. The actual award would be informed by his performance and the business performance on their basis of their assessment of these issues. I agree with the Respondent on a plain reading of the terms of the contract the actual STI was to be calculated by the Respondent on the basis of their view of the Complainant’s performance and business performance. It is the sum that they calculated and proposed to pay that was properly payable and not 20% of base salary.

Without prejudice the above the Complainant has also argued that if the Respondent did have discretion to reduce the STI that that discretion had to be exercised reasonably. He seeks to rely on the position adopted in Braganza and endorsed by O’Sullivan.

As I have outlined in more detail in ADJ-00051493 and above, Braganza recognised that there was an implied term an employment contract which required a rational decision-making process that would exclude extraneous considerations and which would take into account those considerations which are obviously relevant to the decision in question.

The Complainant takes issue with how the Respondent determined his performance. They determined that on the basis of the STI plan rules his award was reduced for the period he was absent and was not in receipt of company enhanced sick pay. The Complainant submits that he was given a series of targets and tasks for 2024 and achieved them over the course of the period between 15th January to the 8th May 2024. The Respondent pointed out that he also took paternity leave in this time and only actually performed his role for thirteen weeks over the course of the year.

Employee performance is not an abstract concept, it is defined by the employer who is entitled to decide what good performance looks like in the context of their organisation. As such views on what constitutes good performance vary from employer to employer. Imposing the sort of “four corners” limitations outlined in Braganza on to an employer’s determination of performance is difficult and must be done so in a sufficiently broad manner, recognising the Respondent’s inherent role. I must avoid trying to decide for them what good performance is.

In this context it is obviously open to the Respondent to consider the fact that the Complainant was only performing his role for limited part of the year in determining his performance for that year as it impacted on his STI bonus.  In coming to this conclusion they do not breach any term implied in the contract of employment. 

For completeness I would note that it is still open to the Complainant to establish the decision not to pay the STI bonus was so outrageous that no reasonable decisionmaker could have reached that conclusion. However, the 50% payment of a performance bonus, is not so unreasonable that no reasonable decision maker could have reached that conclusion.

CA-00067776-001

I do not find that the complaint is well founded.

CA-00072495-001

I do not find that the complaint is well founded.

CA-00072495-002

I do not find that the complaint is well founded.

CA-00072495-003

I do not find that the complaint is well founded.

CA-00072495-004

I do not find that the complaint is well founded.

CA-00072495-005

I do not find that the complaint is well founded.

CA-00072495-006

I do not find that the complaint is well founded.