Complainant

Respondent

Parties

Marcin Nastawny

Keely Group Limited

Representatives

N/A

Elaine McGrath, Reddy Charlton LLP Solicitors.

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 24 of the National Minimum Wage Act, 2000.

CA-00063870-001

03/06/2024

The Complainant has worked as a Supply Chain Co-Ordinator, for the Respondent, since June 2010. The Complainant is paid approximately €365.12 for an (approximately) 28.75-hour work week since June 2024. The Complainant submits that prior to June 2024, he was unlawfully paid less than the minimum wage. The Complainant is seeking approximately €67,000 by way of back pay.

The Respondent denies the Complainant’s allegations in full. The Respondent submits that the Complainant was hired for, and took up, a role based in Poland. The Respondent submits that while the contract of employment is silent on jurisdiction, Polish law and the Polish tax regime should apply. The Respondent submits that there was a “misunderstanding” regarding its obligations and that it wants the position “settled”.  

The Complainant provided extensive written and oral submissions.

The Complainant submitted that since his employment commenced in June 2010, the Respondent has paid him an incorrect wage, in violation of the National Minimum Wage Act, 2000. The Complainant submitted, inter alia, that as he is employed by the Respondent which is an Irish company; he uses the Respondent’s IT systems and HR policies; his salary is paid into his Irish bank account; he makes USC and PRSI contributions via Irish payroll; and he receives 20 annual leave days, his contract of employment is governed by Irish law and he should receive the Irish minimum wage. The Complainant relied on, inter alia, Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (the “Rome I Regulation”).

As regards his supplemental submissions, the Complainant submitted, inter alia, that none of the authorities cited, namely the Nogueira and Others Case, the Schlecker Case and the Mulox Case, establish a general rule that the law of the place in which work is physically performed must automatically apply. The Complainant referred to Article 8 of the Rome I Regulation and submitted that a “holistic assessment of all relevant connecting factors” is required. The Complainant submitted that he is not integrated into the Polish labour market in any meaningful sense. The Complainant further submitted that the Parties have treated his contract of employment, at all times, as governed by Irish law, reflecting an implicit choice of law under Article 3 of the Rome I Regulation. The Complainant submitted that to allow an Irish-established employer to avoid compliance with Irish minimum wage legislation solely because an employee performs work from another Member State, would undermine the protective purpose of the Rome I Regulation. Finally, the Complainant referred to the Payment of Wages Act 1991.

The Complainant:

The Complainant submitted that he had lived in Ireland for approximately five years when he took up his role with the Respondent. He attended approximately one week of training in Ireland and then he was “posted” to Lodz in Poland, where he commenced working for the Respondent, as a Warehouse Assistant, on 20 June 2010. He said that he and his family have all been resident in Poland since 2010. He said that he never returned to Ireland for work purposes.

The Complainant’s tasks involve managing the warehouse, supervising daily operations, preparing documentation, updating the database, arranging shipments and training subcontractors. There are approximately ten people in the warehouse. He is paid weekly and worked initially for approximately 40 hours per week. In 2018, his hours were reduced to approximately 30 hours per week.

The Complainant submitted that in February 2024, he sought legal advice and was told that he should be paid the Irish minimum wage. He said that this was the first time that he realised that he was in receipt of pay which was below minimum wage. He then raised the matter with the Respondent, as per the legal advice he received. He stated that the Respondent “admitted it”. The Complainant also outlined that he had emailed the Respondent regarding his medical cover and his medical insurance. The Complainant further submitted that there was also a disagreement regarding his working hours.

The Complainant outlined that he receives 20 days of annual leave. The Complainant stated that he took Polish bank holidays and that he was paid for the same. He stated that he did not pay PAYE in Ireland as his pay is below the minimum wage. He said that he made PRSI and USC payments. He has an Irish PPS number. He said that he has no Polish security number and that he does not pay tax in Poland. He said that he was in receipt of an Irish medical card from 2015 to 2018. He said that he was in receipt of the Irish child benefit allowance. He said that this matter was raised with him by the Respondent. He said that he does not receive any social welfare allowances. The Complainant stated that he did not receive the Irish Covid-19 Pandemic Unemployment Payment.

The Complainant submitted that Irish law applies as regards all other aspects of his employment relationship, except as regards his right to minimum wage. The Complainant referred to the principle of the most favourable rule.

The Complainant stated that the low pay affected his personal finances as it was inadequate. He said that he couldn’t take up additional work in Poland due to “administrative difficulties” which would arise as he would have to choose the country where he is taxed. He said that he would have to disclose this information to another employer. The Complainant stated that since 5 June 2024, he has been in receipt of the Irish minimum wage of €12.70 per hour. The Complainant stated that he wants his back pay as per his Irish tax band and that he does not want to pay Irish emergency tax.

The Complainant stated that he does not think that it was unusual for him not to pay income tax in either Ireland or Poland.

Cross-Examination – The Complainant:

The Complainant denied that his work hours were reduced pursuant to his request in 2018. He said that there was less work available and his hours were reduced accordingly.

The Complainant stated that his contract of employment provides for a lunchbreak however, it did not state that he was not paid for it.

The Complainant stated that he had responsibility for the subcontractors who worked alongside him. He said that he supervised the subcontractors loading trucks.

The Complainant stated that he did receive pay increases, but they remained below minimum wage and so he paid no PAYE.

The Complainant denied that he had an understanding that Polish wages applied to Poland-based employees. He stated that he could not provide an answer as to what the Respondent’s understanding was.

The Complainant stated that he was not entitled to medical cover in Poland as he did not pay any taxes there. He stated that the Respondent offered him the E111 Form to use in Poland if he got sick. He said that he has to pay to see a private doctor, if he needs medical care. The Complainant stated that if his salary had been paid in Poland, his net income would have been reduced as he would have incurred tax, pension and other deductions. He said that he would also have been entitled to Polish benefits. The Complainant stated that child benefit allowance is claimed in Poland now as his child and their mother are in Poland.

The Complainant stated that in 2017 he discussed the overall situation with the Respondent including the taxation of his wages in Poland. He said that there were some steps taken and that his hours were reduced, to bring his wages more in line with minimum wage.

The Complainant stated that he did not file any tax returns in Poland. He stated that he was not aware that Polish residents were required to declare foreign income.

The Respondent provided extensive written and oral submissions.

The Respondent submitted that the Complainant is Polish and that his role has at all times, been based in Poland and that as such, the Polish minimum wage applies. The Respondent further submitted that the Complainant’s contract of employment is governed by Polish law and falls outside the jurisdiction of the WRC. The Respondent submitted that the Complainant first took issue with his wages in 2024 and that it has since engaged with him. The Respondent submitted that it has become aware that there may be issues and that it was looking into how best to regularise the position so as to bring both Parties into compliance.

The Respondent relied, inter alia, on Article 8(2) of the Rome I Regulation. The Respondent submitted that as there was no choice of law clause in the contract of employment, Polish law applies.

As regards its supplemental submissions, the Respondent referred to the Nogueira and Others Case, the Schlecker Case and the Mulox Case. The Respondent submitted that these casesall confirm that the primary and decisive factor for jurisdiction in employment disputes is the place where the employee habitually carries out his work, which in this case is Poland. The Respondentsubmitted that Poland is the appropriate forum and that Polish law is properly applicable. The Respondent further submitted that the Complainant’s “connection to Ireland is limited solely to the fact that he was paid via an Irish payroll, which is an administrative mechanism and not a connecting factor for jurisdiction or applicable law and which the Respondent acknowledges may in fact have been incorrect.”

Mr. Anthony Kelly:

Mr. Kelly outlined that he is the Respondent’s Owner and Managing Director. He stated that he has been with the Respondent since 1989. He purchased the business from his father and two uncles in 2010. The Respondent currently has seven employees, five of whom are based in Ireland. Mr. Kelly and the other Director are not based in Ireland.

Mr. Kelly outlined that the Respondent had an operation in Nenagh, Co. Tipperary. A decision was taken in 2009, to relocate a large part of the business to Poland. He stated that there was then a recruitment process for a member of staff to work in the Respondent’s warehouse in Lodz, Poland. He said that the Complainant was selected based on a number of criteria, a major one being that the Complainant wanted to relocate to Poland. It was also noted that the Complainant was from Lodz. He said that his recollection of that time was that the Respondent would pay the Complainant a good salary by Polish standards. He said that they did some comparisons and that Irish salaries are 50% - 60% higher. He discussed this with his Operations Manager at the time. Mr. Kelly stated that an Irish payroll system was used. He said that he did not know why there was no jurisdiction clause in the Complainant’s contract of employment. He also said that he could not remember if he owned the company at that time in 2010.

Mr. Kelly stated that the payroll issue was first raised with him when the Complainant queried the applicable sector salary. Mr. Kelly said that in 2017, when he emailed the Complainant and stated that the Complainant was “tax resident” in Ireland, he was “unclear” in what he was saying. He said that this led to discussions in 2024. He stated that “as we stand today”, he does not know what the correct position is. He stated that if the WRC decision is that the “Irish regime” applies in its entirety, then he accepts that the Irish minimum wage applies. Similarly, he will accept a WRC decision which indicates that the “Polish regime” applies. He said that he “just want[s] to do the correct thing”. He said that the Respondent was not used to having people work outside the State.

Mr. Kelly stated that the Complainant’s hours were reduced in 2018 as the Complainant wanted a better work-life balance. He stated that there was a discussion regarding medical insurance with the Complainant. He stated that there was disagreement over pay relating to the Complainant’s lunchbreak. He stated that the Respondent offered the Complainant less working hours for the same pay. He said that the contract of employment was not updated.

Mr. Kelly stated that the Irish Temporary Wage Subsidy Scheme (the “TWSS”) covered pay during Covid but that he needed to double-check the amounts.

Mr. Kelly stated that the Respondent hires contractors and that the Complainant only supervises those contractors loading trucks, to ensure that they are correctly loaded. He stated that the Complainant does not have any responsibility for the contractors and that he does not supervise staff.

Mr. Kelly stated that the Complainant took Polish bank holidays. He said that 20 annual leave days was the standard for all employees.

Mr. Kelly said that he could not recall why he had raised the issue of the Complainant receiving the Irish child benefit allowance. He said that he was trying to “be fair” with the Complainant.

Mr. Kelly stated that he did not look into why no tax was being paid in Ireland or Poland.

Cross-Examination – Mr. Anthony Kelly:

Mr. Kelly stated that he was not aware that there were 26 annual leave days in Poland.

Mr. Kelly stated that he was not aware “from the beginning” that the Complainant’s wages were not in line with the Irish national minimum wage. He said that he was not responsible for payroll.

Mr. Kelly stated that he was not admitting that there was an error in the Complainant’s salary. He stated, that if there is an issue, it needs to be addressed.

Mr. Kelly stated that he knew in 2017, that the Complainant was concerned about medical cover under the Polish system.

Mr. Kelly denied that he refused to pay the Complainant’s taxes in Poland. Mr. Kelly denied that he knew what the Complainant was referring to when the Complainant said that Mr. Kelly had spoken to a tax company and stated that Polish taxes could not be paid as they were too high.

Mr. Kelly stated that he assumed that the Complainant worked on Irish bank holidays, if they were different to Polish bank holidays.

Mr. Kelly confirmed that he and the Complainant tried to settle the matter. He denied that he had made any admissions. He denied that any agreement had been reached.

Mr. Kelly submitted that he has most recently been “advised” that the Irish tax regime does not apply.

Jurisdiction:

The Law:

WRC Adjudication Officers (the “AOs”) derive their powers from the Workplace Relations Act 2015 (the “WRA”). Under section 41 of the WRA, an AO may only determine specific complaints and disputes brought pursuant to the Irish legislation listed in the WRA. As an AO’s powers depend on the application of Irish legislation, an AO must first be satisfied that Irish law governs the contract of employment, before exercising jurisdiction.

Choice of Law:

The Rome I Regulation, which is directly effective and binding in Ireland, determines which national law applies to an employment contract in cross‑border situations. Article 3 provides that a choice of law by the parties is effective only if it is “made expressly or clearly demonstrated by the terms of thecontract or the circumstances of the case”.

Article 8(2) of the Rome I Regulation contains specific provisions for the choice of law in individual employment contracts where a choice of law has not been made by the parties:

“To the extent that the law applicable to the individual employment contract has not been chosen by the parties, the contract shall be governed by the law of the country in which or, failing that, from which the employee habitually carries out his work in performance of the contract. The country where the work is habitually carried out shall not be deemed to have changed if he is temporarily employed in another country.”

Determination of Place Where Employee Habitually Carries out their Work and “Closer Connection”:

This issue has been addressed on a number of occasions by the Court of Justice of the European Union (the “CJEU”):

The CJEU case of Mulox IBC Ltd v. Geels Case C–125/92, 13 July 1993, (the “Mulox Case”) concerned a Dutch national living in France, who was employed by an English registered company. The CJEU held that the relevant place of performance is the location where or from which “the employee discharges principally his obligations to his employer”. In determining the place of performance, the CJEU took into account the fact that the employee had established his residence in France, that he fulfilled his duties from his French residence, and that it was the place to which he returned after each business trip. In the circumstances of the case, the CJEU found that French law applied.

The CJEU case of Schlecker v Boedeker Case C–64/12, 12 September 2013, (the “Schlecker Case”) concerned a German national who worked exclusively and continuously in the Netherlands for over 11 years, while living in Germany. Here, the CJEU found that where a contract of employment does not contain an express choice of law clause, the applicable law may not be the law of the country where the employee habitually works, if there is a closer connection to the law of another country. The CJEU held: “Article 6(2) of the Rome Convention must be interpreted as meaning that, even where an employee carries out the work in performance of the contract habitually, for a lengthy period and without interruption in the same country, the national court may, under the concluding part of that provision, disregard the law applicable in that country, if it appears from the circumstances as a whole that the contract is more closely connected with another country.” The CJEU stated that significant factors suggestive of a connection with a particular country would include: the country in which the employee pays taxes; the country in which the employee is covered by a social security scheme and pension; sickness insurance and invalidity schemes; parameters relating to salary determination; and other working conditions.

The CJEU case of Sandra Nogueira and Others v. Crewlink Ireland Ltd and Miguel José Moreno Osacar v. Ryanair Designated Activity Company (C-168/16 and C-169/16), 14 September 2017, (the “Nogueira and Others Case”) concerned airline cabin crew holding Portuguese, Spanish or Belgian nationalities, who were based in Belgium and sought to apply Belgian law to their contracts of employment. The CJEU held: “the court of a Member State seised of such disputes, when it is not able to determine with certainty the ‘place where the employee habitually carries out his work’, must, in order to assess whether it has jurisdiction, identify ‘the place from which’ that employee principally discharged his obligations towards his employer”. The CJEU further held: “The concept of ‘home base’ constitutes nevertheless a significant indicium for the purposes of determining the ‘place where the employee habitually carries out his work”. Although the CJEU judgment here concerned a preliminary referral relating to Regulation (EU) No 1215/2012, the judgment is directly relevant as it concerns the place in which or from which the employee habitually carries out their work.

Findings:

There is no choice of law clause governing the Complainant’s contract of employment dated June 2010 and so Article 8(2) of the Rome I Regulation applies. It is therefore necessary to determine where the Complainant’s work is habitually carried out and to determine if there is a “closer connection” to another jurisdiction.

Having regard to CJEU case law outlined above and to all of the circumstances of this case, the following relevant factors determine that the Complainant’s habitual place of work is in Poland:

·            The Complainant has worked in the Respondent’s warehouse in Lodz, Poland throughout the duration of this employment, save for an initial one-week training period in Ireland;

·            The Complainant has never travelled to Ireland for work purposes, for the Respondent; and

·            The Complainant has lived in Poland throughout the duration of this employment.

For completeness, I note the Complainant’s submissions that, inter alia, the Respondent’s registered office is in Ireland; that he was paid through Irish payroll; and that he made USC and PRSI contributions. Against this, I also note that the Complainant took Polish bank holidays and was paid for the same; and that the Respondent gave evidence that the Complainant’s wages were determined in the context of Polish wages. Having considered all of the evidence before me, on balance, I find that the factors referred to by the Complainant do not point to a closer connection to the law of Ireland than that of Poland.

Conclusion:

In the circumstances, I find that Irish law does not apply to the Complainant’s contract of employment and so I do not have jurisdiction in this matter. Therefore, I decide that the complaint is not well founded.

Finally, as this matter has been determined pursuant to a preliminary decision concerning jurisdiction, it is not necessary to make findings regarding the remaining preliminary and interim issues.

For the reasons set out above, I find that I do not have jurisdiction in this matter. Therefore, I decide that the complaint is not well founded.

National Minimum Wage Act 2000, Preliminary Issues, No Jurisdiction.