WRC Held Wages Are Not ‘Properly Payable’ During Lay-Off Period & Such Non-Payment Cannot Be A Breach of Payment of Wages Act
Anne O'Connell Solicitors | View firm profile
Facts: The Complainant joined the Respondent’s engineering contracting firm on 26th August 2019 as a mechanical estimator on an annual salary of €65000. He was laid off on 27th March 2020 when the closure of the construction sector due to the Covid-19 pandemic. The Complainant was not brought back when certain employees were brought back to work in June 2020 and was given four weeks’ notice of redundancy.
The Complainant lodged two complaints, one claiming that his redundancy was an unfair dismissal and the second claiming the unlawful deduction of wages under the Payment of Wages Act for not being paid during the period that he was on lay-off due to the pandemic. The Adjudicator found that the decision to dismiss him on the ground of redundancy was unfair, but it is the latter decision under the Payment of Wages Act that is more interesting and noteworthy.
The Complainant submitted that he was placed on lay-off as a result of the restrictions at the start of the pandemic but that some employees were not laid off, others returned in April 2020, the headquarters reopened on 18th May and by June all of his colleagues were back at work. He clarified that he was in the process of completing a project when he was laid off. The Complainant’s representative pointed out that the non-payment of his wages was not authorised by any clause in his contract. She also referred to the fact that the Respondent did not apply for the temporary wage subsidy scheme.
The Respondent said that the complainant wasn’t brought back from lay-off because of a “slow-down in business across the board”. The CFO of the Respondent company said that in regards to the financial impact of the Covid-19 pandemic, the employees required to keep the business running were reviewed every week and when people came back to work their wages were reduced.
Decision: The Adjudicator, Catherine Byrne, took the view that it was unfair to keep the Complainant on lay-off when his colleagues returned to work from June 2020. She found that the failure to bring him back from lay-off was a precursor to their decision to dismiss him unfairly on grounds of redundancy, which she awarded compensation for.
However, the Adjudicator referred to the Labour Court decision in Barbara Ciszewska v. William P. Keeling & Company Unlimited PWD2010 which held that
“There is no provision in the Payment of Wages Act that requires that wages be paid during a period of lay-off“
The Adjudicator held that the absence of a contractual provision not to pay an employee while on lay-off does not make it illegal not to pay such an employee during a lay-off period. She found that as an employee does no work for their employer while on lay-off, wages are not “properly payable” under the Payment of Wages Act and therefore failure to pay wages is not an illegal deduction. The complaint here under the Payment of Wages Act was not well founded.
Takeaway for the Employers: Employers should be aware they are not obliged to pay the wages of an employee during a period of lay-off where the employee is not doing work for the employer, even when this is not provided for in the contract of employment.
Link – https://www.workplacerelations.ie/en/cases/2021/september/adj-00031644.html
Authors – Anne O’Connell and Hannah Smullen