Complainant: Ian Church

Respondent: HPL Engineering Services Ltd

Employee brought a claim to WRC for constructive dismissal following alleged unlawful deduction of wages amounting to a fundamental breach of contract.

The Complainant (an electrical supervisor) employed by the Respondent since February 2021, alleged constructive dismissal due to a fundamental breach of contract. He claimed unlawful deductions from his wages, changes to his employment terms without notification, and a failure to receive annual leave and public holiday entitlements. Following a family bereavement in March 2023, he was granted a week of annual leave but later discovered his hourly wage had been reduced by 20%. Despite raising the issue with the Respondent, no resolution was reached. Additionally, he reported hostility from a colleague on-site. The Complainant argued that his employment ended due to the Respondent’s breach of contract. He relied on the contract test under the Unfair Dismissals Act 1977, asserting that the wage reduction amounted to a fundamental breach.

The Respondent stated the core dispute arose when the Respondent mistakenly reduced the Complainant’s hourly rate for three weeks in March 2023. The Complainant, upon noticing the discrepancy in his payslip, immediately raised the issue. The Respondent acknowledged the error, attributing it to an internal misunderstanding about the Complainant’s position and pay scale, and subsequently rectified the underpayment. The Respondent’s Director also apologised to the Complainant for the mistake. During this period, the Complainant walked off-site at the National Children’s Hospital in late March 2023, but the Respondent maintained that he never formally resigned nor submitted a notice of termination. Instead, the Complainant remained in active discussions with the Respondent regarding future site allocations, including work at Grand Canal Harbour and a potential project in Sweden. However, his induction for the Grand Canal Harbour project was delayed due to missing training certifications, and his deployment to Sweden stalled after he provided incorrect documentation, preventing his induction onto the site. The Respondent argued that since the Complainant was still engaging with them for employment opportunities and had not formally resigned, his constructive dismissal claim was premature and improperly constituted under the Unfair Dismissals Act 1977. Additionally, the Respondent asserted that the Complainant failed to exhaust internal grievance procedures, having never formally raised concerns about underpayment, annual leave, or changes to his position before submitting his claim.

The Adjudicator found that the Complaint under the Payment of Wages Act 1991 was not well founded, as the reduction in the Complainant’s hourly rate was an administrative error that had been rectified. Regarding the Unfair Dismissals Act 1977, the Complainant claimed constructive dismissal due to an unjustified pay reduction. The Adjudicator determined that the sudden and unilateral pay cut constituted a fundamental breach of contract. While the Complainant had not formally lodged an internal grievance, his repeated efforts to address the issue were noted. The claim was upheld, and he was awarded €5,750 in compensation.

The Terms of Employment (Information) Act 1994 claim, regarding alleged changes to job title and conditions, was not supported by evidence and was dismissed. Further, his claims under the Organisation of Working Time Act 1997, relating to public holidays and annual leave, were also not proven and were dismissed.

1. Employers should try to ensure that fundamental terms of employment, particularly pay rates, are clearly communicated, correctly applied, and not altered without proper notification and consultation. Unilateral reductions in pay, even if due to an administrative error, can constitute a fundamental breach of contract, potentially leading to claims of constructive dismissal. It is essential that any payroll errors be rectified promptly and that employees are kept informed to avoid disputes escalating.  
   
   
2. Employers should also have clear internal grievance procedures and encourage employees to use them before resorting to external complaints. If an employee raises a workplace issue, such as unfair deductions or contract changes; address it immediately and document all efforts to resolve it. Additionally, if an employee walks off-site due to a dispute, employers should follow proper disciplinary procedures rather than leaving their status unclear (in case it is leveraged in a constructive dismissal claim).

The full case can be found here:
https://www.workplacerelations.ie/en/cases/2025/february/adj-00045901.html