Background:

The Respondent provided legal services and employed the Complainant as a Legal Executive from 3rd September 2020 until 28th May 2021.  She commenced on a starting annual salary of €24,000 which was to be increased by 10% from the 1st of January 2021.

The Complainant submitted the 10% increase was stalled owing to the Respondent’s business difficulties. Towards the end of April 2021, on the day her monthly salary was due, the Complainant and the other staff were informed that the business was experiencing financial difficulties and the staff would not be paid that month.  She was also informed that the business was subject to an audit and that the Covid Restrictions Support Scheme (CRSS) had been stopped until it was complete.  She was reassured that the audit would be finalised before the next pay day (end of May 2021) and she would be paid then.  She continued working for the next month.  Payment of her wages for April and May did not materialise and instead by letter dated 21st May 2021, she was laid off and her employment was terminated from 28th of May 2021 “due to the downturn in business due to the Covid-19 Pandemic and other operational difficulties.” The Complainant submitted as she had more than 13 weeks’ service and as per her contract, she was entitled to one week’s pay in lieu of notice under the Minimum Notice and Terms of Employment Act 1973.

The Complainant corresponded with the Respondent and sought to come to an arrangement for the repayment of the monies owed.  Whilst she has received a total of €450 in instalments to date, the Complainant submitted that the sum of €4,550 gross remained outstanding in respect of unpaid wages and pay in lieu of notice and €845 gross remained outstanding in respect of unpaid annual leave.  The Complainant submitted documentation vouching her claims.

The Respondent did not attend the hearing. By email dated 30th August 2022, the Respondent wrote to the WRC to update his email address and to apologise for missing the hearing. The Respondent stated he was not disputing the Complainant’s claim and would accept any order the WRC deemed fair.

The Adjudication Officer (AO) was satisfied that the Complainant was contractually entitled to receive the outstanding wages, 10% increase and pay in lieu of notice period claimed. The AO found the Complainant’s evidence and vouching documentation to be wholly credible.  The AO was satisfied that on the balance of probabilities, this constituted an unlawful deduction in contravention of the Payment of Wages Act.

Outcome:

The Respondent was ordered to pay the Complainant the sum of € 6,000 in compensation. This comprised the sum of €5,000 in respect of outstanding wages, and a further €1,000 in respect of outstanding annual leave entitlement.

Practical Guidance for Employers:

An employer is only allowed to deduct money from an employee’s wages if:

• The deduction is required by law, such as tax (PAYE) and social insurance (PRSI)
• It is set out in the contract of employment, such as occupational pension contributions
• They are taking back an overpayment of wages or expenses
• The employee has given their written consent, for example, for a trade union subscription
• They are required by a court order, for example, an ‘attachment of earnings order’ in a family law case
• The employee is on strike

The Organisation of Working Time Act provides that any outstanding annual leave an employee has becomes payable by the employer upon the cessation of employment.

The full case is here:
https://www.workplacerelations.ie/en/cases/2023/february/adj-00036840.html