Mary McLoughlin

RTÉ

WRC found that an administrative error of salary in contract of employment was well founded but awarded no compensation.

The Complainant submitted that she was not paid the agreed remuneration under a fixed-term contract. She argued that she signed the contract in good faith, which specified a wage of €12,850 for six months' work at nine hours per week. The Respondent later claimed there had been an administrative error in the contract. The Complainant asserted that no error was communicated to her before signing, and she relied on the signed agreement. She contended that the Respondent reneged on the contract by deducting her wages without consent, breaching the Payment of Wages Act 1991. In evidence, the Complainant stated she worked with the Respondent since 1998 and had taken on various roles. She was happy to sign the fixed-term contract and was unaware of any mistake until after her first payslip. Cross-examination suggested she should have realised the pay increase was erroneous, but she denied this. She maintained that the Respondent failed to engage meaningfully after the issue arose. In closing, the Complainant argued that offer, acceptance, and consideration were present, and that the unlawful deduction warranted financial compensation. She emphasised that mistakes by employers must have consequences and sought a remedy for the breach of trust.

The Respondent submitted that the Complainant alleged unlawful deductions under the Payment of Wages Act 1991 based on her second post-retirement contract. The Respondent acknowledged an administrative error where the contract incorrectly stated a gross salary for the six-month duration, rather than per annum. They asserted the Complainant knew or ought to have known about the error, given the “unrealistic 103% pay increase” for similar duties. The Respondent met with the Complainant and her union several times, apologised, and offered additional hours to align her pay with the contract's mistaken amount. Although a revised contract was issued, the Complainant later rejected it. The Respondent maintained that it acted reasonably and transparently, arguing that mistakes with public funds must be corrected and that the Adjudication Officer should exercise discretion not to award compensation. The Respondent accepted that while trust is important, the mistake was a genuine human error without any intent to breach trust. Ultimately, the Respondent emphasised that the Complainant suffered no actual loss in hourly rate and that it had engaged in meaningful efforts to resolve the matter fairly before the WRC complaint was lodged.

The Adjudicating Officer held it was undisputed that the Respondent issued a contract to the Complainant in April 2024 containing a salary error, mistakenly stating payment of €12,850 for six months instead of per annum. The Respondent admitted the mistake as an administrative error, while the Complainant sought a financial remedy, arguing mistakes have consequences. Applying the Payment of Wages Act 1991, the Officer found that while the error would void a contract at common law, the Act required assessing whether an unlawful deduction occurred. Following the High Court guidance in Marek Balans v Tesco Ireland, it was found that the Respondent could not retrospectively alter the agreed salary without consent. The Adjudicator concluded that an unlawful deduction occurred under the Act, but considering the circumstances (including the genuine nature of the error and extensive engagement by the Respondent) no award of compensation was made. The decision deemed the complaint well-founded but found it reasonable to award no financial remedy given the context and fairness of the Respondent’s actions.

• Employers should exercise extreme care when drafting and issuing contracts, particularly regarding key terms like remuneration. Even administrative errors can expose the employer to findings of unlawful deduction under the Payment of Wages Act 1991, regardless of intention. A mistake in contract terms, if relied upon by the employee, cannot be unilaterally corrected without consent.
  
• Where errors are identified, employers should act immediately, i.e. engage transparently with the employee, apologise, and seek a mutually agreed correction in writing. Thorough documentation of discussions and efforts to resolve the issue fairly can be crucial if a dispute later arises. Early proactive communication reduces the risk of escalation to formal complaints.
  
• While the WRC has discretion to award no compensation if reasonable, relying on that outcome is risky. Prevention is better than cure; therefore, implement strong internal checks before contract issuance, and always have contracts reviewed by HR or legal advisors to catch errors before they create costly disputes.
  

The full case can be found here:
 https://www.workplacerelations.ie/en/cases/2025/march/adj-00054470.html