The High Court has confirmed that where a contract contains a clear statement that the hourly rate of pay takes into account the requirement to work on Sundays there is no further obligation on employers to specifically set out the proportion of the hourly rate of pay which relates to Sunday working.

What does the law say about Sunday working?

Section 14 of the Organisation of Working Time Act 1997 (OWTA) provides that where employees are required to work on Sunday, and this has not otherwise been taken into account in calculating their rate of pay, they are entitled to the following compensation:

• payment of a reasonable allowance;
• increasing the rate of pay by a reasonable amount;
• a reasonable amount of time off; or
• a combination of the above.

Section 3 of the Terms of Employment (Information) Act 1994 to 2014 (‘the 1994 Act’) requires employers to include any terms or conditions relating to hours of work (including overtime) and the rate or method of calculating an employee’s pay in an individual’s terms and conditions of employment.

For employees who are expected to work on Sundays, the contract of employment should include details in respect of hours of work and calculation of pay.  It is standard practice for many employment contracts to provide that the rate of pay has been calculated to take into account any requirement to work on Sundays.

Trinity City Hotel v Kolkesnik & Alfimova

Two employees worked as accommodation assistants for Trinity City Hotel.  Their contracts of employment included terms in relation to hourly rates of pay and stated that:

‘this includes [the employee’s] Sunday premium based on [the employee] getting every third Sunday off”. 

Both employees brought a number of claims before the Workplace Relations Commission (WRC), including that their employer had breached Section 14 of the OWTA.  The employees argued that:

• where a contract states that a Sunday premium is included in the hourly rate of pay, some element of that rate of pay must be specifically referable to the requirement to work on Sundays;
• by failing to specify which element of the hourly rate of pay related to the requirement to work on Sundays, the employer had not taken the requirement to work on Sundays into account in calculating the hourly rate of pay; and
• the employees were entitled to a Sunday premium under Section 14 of the OWTA.

The employer argued that the requirements of Section 14 of the OWTA had been met - it was clear from the express wording in the contract of employment that the requirement for the employees to work Sundays had been factored into the calculation of their hourly rate of pay.

The decision of the WRC and the appeal to the Labour Court

The Adjudication Officer (AO) in the WRC accepted the employees’ argument that there had been a breach of Section 14 and awarded a premium of 30% of the basic rate of pay for all hours worked on Sundays.

On appeal, the Labour Court upheld the AO’s determination and affirmed the award.  It decided there had been a breach of Section 14 because the employer had failed to provide any evidence relating to what, if any, element of the hourly rate of pay was specifically referable to the requirement to work on Sundays.

The High Court decision

The employer appealed to the High Court on a point of law, based on three grounds, that:

• The Labour Court had incorrectly assumed jurisdiction to consider the employee’s claim to Sunday premium in circumstances where the requirement to work on Sundays had already been taken into account in the determination of their rate of pay in the contract;
• Similarly, the Labour Court should not have assumed jurisdiction where the OWTA had been complied with (because the contract expressly provided that the requirement to work on Sundays has been taken into account in determining the rate of pay); and
• Even if the Labour Court had a basis for finding that the employees were entitled to be paid an additional Sunday premium, it had failed to consider the appropriate premium to be paid, and simply endorsed the amounts awarded by the AO.  This was done without due consideration or any regard to the guidance contained in the OWTA which includes an examination of suitable comparator employees’ levels of compensation for Sunday working, when determining what is a reasonable level of compensation in the circumstances.

In objecting to the appeal, the employees claimed that the High Court did not have jurisdiction to hear the appeal as the Labour Court decision (that the employer had breached Section 14 of the OWTA) was a finding of fact and there was no error in law identified in the grounds of appeal.

As a result of the employees’ contention regarding the jurisdiction of the High Court, the decision does include a substantial discussion on curial deference, and the jurisdiction of the High Court to consider matters of facts and law on appeal from the Labour Court.  Having done so, the Court decided that that there were issues of law to be decided in the appeal.

The employees argued that:

• the Court should take into account the vulnerable position of employees when presented with contracts which stated the rate of pay included a premium for Sunday working; and
• the employer was under a duty to ensure that the contract clearly identified the portion of the hourly rate of pay that related to Sunday work.

However, the High Court held that these arguments ignored the clear and unambiguous language in the contracts of employment.

The High Court decided that although a statement in a contract that the rate of pay takes into account the requirement to work on Sundays may not always be conclusive, if an employee asserts that the rate of pay does not take this into account, then some credible evidence must be advanced to rebut the express provision of the employment contract.  The employees in this case had failed to do that.

The High Court observed that it would be possible to overcome the express wording in the contract where the surrounding circumstances no longer reflected what was agreed.  For example, if the rate of pay originally provided for in the contract was greater than the statutory minimum at that time, but was no longer greater than the statutory minimum when the complaint was made.  In these circumstances it would be difficult to argue that the rate of pay could still reflect the requirement to work on Sunday.

Errors of law or fact

In examining whether the appeal involved a consideration of facts or law, Binchy J stated that where a claim under Section 14 of the OWTA comes before Labour Court, it must investigate the claim, and its conclusion on that claim is a finding of fact.  However, the judge noted that in the current case, the Labour Court had arrived at its conclusion on the basis that the employer had failed to provide evidence as to what element of the employee’s rate of pay was specifically referable to the requirement for them to work Sundays.  This, he noted, was a conclusion on a matter of law, because the Labour Court was deciding that a clear statement made in the contract of employment signed by both parties could not be relied upon, and instead must be proven in a particular way.

Having considered the issue and evidence, Binchy J held that the Labour Court had erred in law by:

• Ignoring the express wording of the contract which provided that the hourly rate of pay included the Sunday premium;
• Interpreting the OWTA as imposing an obligation on the employer to either (1) ensure the contract is drafted in such a way as to explain the breakdown of the hourly rate, to include the portion of the hourly rate that was referable to Sunday work, or (2) to prove a statement expressly agreed in the contract of employment by way of oral evidence at the hearing of the complaint under the OWTA.

The High Court also noted the arguments made by the employees that the failure to provide the method of calculating the rate of pay in the contract amounted to a breach of Section 3 of the 1994 Act 1994.  The High Court rejected the argument that the rate of pay must be broken down to identify the element of the rate of pay specifically referable to the requirement to work on Sundays and held that simply providing that employees are to be paid a specific hourly rate in the contract would satisfy the requirements of Section 3.

What does this mean for employers?

The decision confirms that where a Sunday premium is expressed to be included in an employee’s hourly rate of pay (as is the case in many contracts of employment), employers are not also required to provide a breakdown of the hourly rate of pay to identify the precise element which relates to Sunday work in order to comply with Section 14 of the OWTA.

However, employers should ensure that any hourly rate of pay which is expressed to include a Sunday premium is greater than the statutory minimum wage at any given time - a rate of pay that is no greater than the statutory minimum wage cannot, in practice, be considered to include a Sunday premium and may therefore be in breach of Section 14.