Organisation penalised for unlawful reduction in Complainant’s wages during disciplinary process
Key Learnings
Organisations need to be clear on disciplinary process and any deduction in wages during a period of suspension per the organisational process and any terms and conditions of employment as reflected in the employee contract. An Organisation cannot decide to stop payment and provision of terms and conditions if not stated in employment contract.
When an Employee is out of work, Employers need to be very clear on the basis upon which they are out and cannot “re-classify” such periods to be a sanction after the conclusion of a process.
Background
Starting on January 3, 2005, the Respondent employed the Complainant. The Respondent’s Dealer Principal (DP) and the Complainant had a “verbal exchange” on or around February 1, 2022, during which the DP claimed the Complainant had physically assaulted her. From February 3, 2022, to February 28, 2022, the Respondent placed the Complainant on paid suspension while an inquiry was conducted. During this time, the Complainant began providing the Respondent with sick certificates, indicating that he was unable to report to work. The Complainant was placed on unpaid leave at this time because the Respondent’s employment contract with the Complainant did not provide for sick leave. During this period, the Complainant used two paid sick days and carried over annual leave. The Complainant’s attorney informed the Respondent on April 11, 2022, that the Complainant had been “certified fit to return to work.” However, the Complainant remained out of work and unpaid until June 20, at which point the Respondent said it would continue to pay the Complainant because the Complainant had agreed to participate in the disciplinary procedure related to the incident in question.
The Complainant contended that the Respondent had no contractual right to place him on unpaid suspension and that he should be compensated for the whole amount of time he was absent because of the illness he contracted as a result of the Respondent’s actions. Although the option to designate time as unpaid suspension was not explicitly granted in the contract, the Respondent claimed that it was within its rights to make such decision during the disciplinary process and that the unpaid time period was a suitable discipline in the given circumstances.
Summary of Complainant’s Case
The Complainant started working for the Respondent’s family business around January 3, 2005. He described himself as a loyal and diligent employee but reported ongoing issues with the Dealer Principal (DP) since they joined the company. On February 1, 2022, the Complainant was involved in a verbal exchange with another employee but denied any assault, which was acknowledged in the final outcome. Following this incident, a complaint was made against him, and the Respondent initiated an investigation through an external party, leading to a disciplinary process. The Complainant disagreed with the formal investigation, its process, and the involvement of the DP, stating it caused him stress for which he sought medical treatment.
He was suspended with full pay from February 3, 2022, until February 28, 2022, after which he submitted sick certificates until April 6, 2022. Afterward, he was placed on unpaid leave. The Respondent claimed the paid suspension was only for the investigation period and that the Complainant was not engaging with the disciplinary process, which he disputed. An email from the Respondent’s Solicitor on June 22, 2022, confirmed the Complainant would be back on full pay from June 20, 2022, upon reengagement with company procedures.
The investigation upheld the complaint against the Complainant, leading to a disciplinary meeting on July 5, 2022. A letter on July 6, 2022, recommended his summary dismissal but offered reinstatement from July 11, 2022, with the unpaid suspension period considered. The Complainant responded on July 8, 2022, agreeing to return on July 18, 2022, and appealing the unpaid suspension decision. The Respondent denied the appeal but allowed him five days of annual leave from July 11 to July 18, 2022.
The Complainant testified that he was owed 15 weeks of pay, including 14 weeks from March 17 to June 20, 2022, and one week from July 18 to July 25, 2022. He acknowledged that the Respondent did not have a paid sick leave scheme but argued for payment due to the stress caused by the disciplinary process. He admitted using carry-over annual leave and two days of paid sick leave from February 28 to March 17, 2022. For the week of July 18 to July 25, 2022, he had no accrued leave and did not notify the Respondent. It was argued that he did not engage with the disciplinary process, which he denied, asserting he wanted to clear his name. He stated his weekly pay was €780 gross, including a €20 pension contribution from the Respondent.
The Complainant claimed the investigation and disciplinary process were unfair and that the unpaid suspension breached his employment contract and the Payment of Wages Act [1991-2017].
Summary of Respondent’s Case
The Respondent stated that on February 1, 2022, the Dealer Principal received a written complaint accusing the Complainant of physical assault. The Respondent was duty bound to investigate, appointing an independent investigator. The Complainant was suspended with full pay during this time. The investigation found the Complainant guilty of gross misconduct, leading to a disciplinary process starting on March 1, 2022. This was delayed due to the Complainant’s illness, which was certified until April 6, 2022. The Complainant did not inform the Respondent when he was fit to return to work.
In 2022, the Respondent did not offer paid sick leave but paid for two sick days and allowed the Complainant to use carry-over annual leave, covering his pay until March 17, 2022. Payment stopped from March 18, 2022. The Respondent claimed the Complainant initially refused to cooperate with the disciplinary process but agreed to reengage on June 20, 2022, and was reinstated to full pay suspension.
The Respondent initially considered dismissal but decided to reinstate the Complainant on July 11, 2022, without loss of service or status, marking his absence as unpaid suspension. The Complainant’s appeal was denied due to a lack of provided grounds.
The Dealer Principal (DP) testified, explaining that advice was sought to ensure a proper investigation and disciplinary process. Although the Company Handbook did not specify unpaid suspension as a sanction, it was deemed fair under the circumstances. The DP clarified the rationale behind the Complainant’s payments, stating he was not paid during the unpaid suspension because he did not follow the disciplinary process, though he was not charged with non-cooperation. The DP mentioned the Complainant took paid leave from July 11 to July 18, 2022, but his absence from July 18 to July 25, 2022, was unexplained.
The Respondent argued they had to investigate the assault complaint and conducted a fair process. They justified stopping the Complainant’s pay due to his refusal to engage with the disciplinary process and because the original dismissal was reduced to unpaid suspension and reinstatement.
Findings and Conclusions
Section 1 of the Payment of Wages Act [1991-2017] sets out the definition of wages as “any fee, bonus or commission, or any holiday, sick and maternity pay, or any other emolument, referable to [the employee’s] employment, whether payable under [] contract of employment or otherwise”, with Section 5(1) setting out the parameters according to which deductions may be made from an employee’s wages.
I have carefully considered the sworn evidence, submissions and documentation furnished and have come to the following conclusions:
There are differences of opinions between the parties in relation to the conduct of the investigation and disciplinary procedures. That being said, from the perspective of my function in making a decision pursuant to the Payment of Wages Act [1991-2017], I am satisfied that an incident occurred in the workplace on the 1st of February 2022 and that as a result, the Respondent was entitled to initiate an investigation process. As the investigation concluded that gross misconduct had occurred the Respondent was then entitled to initiate its disciplinary policy. In relation to the Complainant’s entitlement to appeal, I am satisfied from all the evidence and documentation that the Complainant was afforded a right of appeal notwithstanding the reference to “cherry-picking”. In this regard I specifically refer to the Respondent’s email of 26 July 2022 which requested the Complainant “to set out the grounds upon which he is making the appeal….by close of business on Friday 29th July”.
The Complainant was placed on paid suspension commencing 3/2/2022 and I am satisfied this was in accordance with the Respondent’s Disciplinary & Dismissal Procedures which provided for suspension of “an employee with full pay” in cases “which appear to involve serious misconduct”.
From 28 February to 6 April 2022 the Complainant submitted sick certificates. From the evidence and submissions, I am satisfied that no sick certificates were submitted after 6 April 2022. In this regard, I note the Respondent’s position that it was not notified the Complainant was fit to return after 6 April 2022. I also note a letter of 11/5/2022 from the Complainant’s legal representative to the Respondent which stated, “Our client instructs that he is now certified fit to return to work”. The Complainant accepted under cross examination that the Respondent did not operate a paid sick leave scheme and stated that he utilised carry over annual leave and two days paid sick leave granted by the Respondent to secure payment up until 17 March 2022. The Respondent’s Handbook stated, “Payment of wages for absence due to illness is at the company’s discretion but it generally unpaid in principle”. In all the circumstances I find that the failure to pay the Complainant between 18 March and 6 April 2022 was not an unlawful deduction from his wages as the granting of paid sick leave was discretionary and the deduction was authorised by the terms and conditions of the Complainant’s employment in force at the time.
There is no dispute that the Complainant was restored to the payroll on 20 June 2022 as per the evidence and email to him of 22 June 2022 which referred to “the changed stance and reengagement with company procedures”. The Complainant disputes that he was uncooperative with the disciplinary procedures whilst the Respondent maintains it was obliged to make a number of interventions to seek his continued engagement with the process. The outcome letter of 6 July 2022 stated the period of time when the Complainant was not active was to be regarded unpaid suspension. In her evidence the DP stated that the Complainant was not paid because he was not adhering to the Respondent’s disciplinary process though she accepted – under questioning – that the Complainant was not charged with non-co-operation. The minutes of the meeting held with the Complainant on 3 February 2022 advised him that his paid suspension was for the purpose of the investigation into the allegation which had been made against him by a fellow employee and that “Suspension provides the opportunity to fully investigate all of the facts and is not a form of disciplinary action….”. This statement was consistent with the terms of the Respondent’s Handbook – specifically its Disciplinary and Dismissal Procedures – which provided for paid suspension to enable the carrying out of an investigation and disciplinary process. The Disciplinary and Dismissal Procedures also provided for the other sanctions of verbal, written and final written warnings in addition to dismissal. Having considered all the evidence and submissions I am of the view that as per his terms and conditions of employment, the Complainant should have been restored to paid suspension after his sick leave was concluded – i.e. from 7 April 2022, that his properly payable wages from that date were in the nature of paid suspension and that the retrospective imposition of the sanction of unpaid suspension was contrary to his terms and conditions of employment;
By letter of 6 July 2022 the Complainant was advised that he was being re-instated with effect from 11 July 2022. The Complainant responded – via his legal representative – on 8 July 2022 confirming he would return on 18 July. The Complainant availed of annual leave to cover this additional week. The Complainant subsequently notified the Respondent that he would be returning to work on 25 July 2022. Having considered all the evidence and submissions, I am satisfied that any leave the Complainant took after his reinstatement on 11 July, should have been in accordance with his terms and conditions of employment. In circumstances where the Complainant did not identify before me any specific term or condition that would have entitled him to be paid from 18 July – 25 July 2022, I accept the position of the Respondent that the Complainant’s absence during this additional week was “unexplained”. Accordingly, I am satisfied that failure to pay the Complainant between 18 July and 25 July 2022 did not constitute an unlawful deduction from his wages.
Decision
For the reasons outlined the Adjudicator decided this complaint is partly well founded on the basis that it considered the retrospective imposition of unpaid suspension from 7 April 2022 to 19 June 2022, constituted an unlawful deduction of the Complainant’s wages contrary to the Payment of Wages Act [1991-2017]. Based on the Complainant’s annual gross weekly salary of €760, the Adjudicator ordered the Respondent to pay the Complainant the total gross amount which should have been payable to him during this period of time, subject to such statutory deductions as may apply. In addition, the Adjudicator ordered that the Complainant’s pension fund and annual leave be computed on the basis that the Complainant was entitled to full pay for the totality of the period from 7 April – 19 June 2022 inclusive.