Unlawful holiday pay deduction; overtime claim rejected.

The Complainant had been employed as an engineer by the Respondent from April to September 2024. He claimed that he was owed specific unpaid amounts for overtime and on-call work under the terms of his contract. In sworn evidence, he stated that he was due €30 for overtime on 2 August, six hours on 15 August, and €240 for overtime worked on 1 September. He also claimed €80 for his final on-call period. Additionally, the Complainant submitted that he was entitled to €700 in holiday pay, which had been withheld without justification. He rejected the Respondent’s assertion that he failed to return company property, stating that the test-monitor and labeller were left in the company van on the day his employment ended. He alleged that the Respondent failed to properly check the van at the relevant time.

The Respondent contested the Complainant’s claims for overtime and on-call payments. They gave sworn evidence that a comparison of the Complainant’s submitted timesheets with van tracking data revealed inconsistencies, suggesting the Complainant claimed hours at customer locations where he had not been present. The Respondent exhibited both the timesheets and tracking reports to support this position. Regarding the on-call allowance, they presented a payslip showing that €80 had already been paid to the Complainant for the relevant period before his departure. While the Respondent accepted that €700 in holiday pay was being withheld, it justified this on the basis that the Complainant had not returned essential company property, namely a test-monitor and labeller. The Respondent believed it was contractually entitled to retain the final payment pending the return of these items.

The Adjudicating Officer held s.5 of the Payment of Wages Act 1991 prohibits unauthorised deductions from wages unless provided for by statute, contractual terms, or the employee’s written consent. Deductions for employee acts or omissions, or for goods/services provided, must meet strict fairness and notice requirements. In this case, the Complainant’s claims for unpaid overtime and on-call allowance were rejected due to lack of credible supporting evidence. However, the Respondent’s withholding of €700 holiday pay, based on unreturned equipment, was found to be unlawful. The Adjudicator found no contractual basis for the deduction and directed repayment under the Act’s redress provisions.

Employers should exercise care when making any deductions from employees’ wages. Under s. 5 of the Payment of Wages Act 1991, deductions are only lawful where expressly permitted by statute, contract, or with the employee’s prior written consent. Even where losses or unreturned property are suspected, deductions must meet strict criteria (such as prior written notice and fair, reasonable amounts). It is not sufficient to rely on an assumed contractual right if no such clause exists.

In this case, the employer’s failure to identify a clear contractual basis for withholding holiday pay resulted in a ruling against them. Employers should ensure contracts are up to date, maintain accurate records, and seek advice before withholding any pay to avoid exposure to successful claims.

The full case can be found here:
https://www.workplacerelations.ie/en/cases/2025/adj-00055370.html