Disputes regarding the payment of wages are commonplace in most Irish Workplaces.The Payment of Wages Act, 1991 regulates the payment of wages and there is always the general underlying contract principles that basically states that neither party to an agreement (in this case the employer and employee) can change the terms of that agreement unless both parties consent. As this issue is so commonplace, it is always highly recommended that employers keep abreast of tribunal decisions on the topic. Nic Bhradaigh -v- Mount Anville Schools (PW244/2012) This case involved is a school secretary of a private school who took a Payment of Wages Claim as a result of pay cuts under the FEMPI Act 2009 (the Financial Emergency Measures in the Public Interest Act) which was specifically introduced in relation to protecting pensions of public servants. The secretary argued that these cuts should not have applied to her because she is not a public servant given that her salary is paid solely from the school’s private funds, not by the State. Public or Private? The school in question is a private fee paying school but did in fact have 27 teachers who were “paid by the Department of Education and Science. All other teachers and staff are funded by fees and private funds. The school does not receive any other funding whatsoever apart from the 27 teachers paid directly by the Department of Education and Skills.” However, the Department did deem this school to be a “recognised school” and instructed that they comply with reductions under FEMPI. EAT Decision The EAT ultimately held by a majority decision that the deduction was lawful. The decision does not elaborate into much detail as to why this is the case but it would appear that the rationale behind the decision was that the deduction/reduction was authorised by the relvant government body and that the school was a recognised school. Dissenting Decision This case is very interesting however as one member of the 3 person EAT chair gave a dissenting opinion and found that the deduction/reduction was unlawful. It is rare to see a dissenting opinion and as such this shows how tough a case this was for the chair to determine. The dissenting opinion found that the employee was not a public servant employee and pointed to facts such as that this employee did not benefit from public servant pensions nor any other public service benefit. However, the majority on the Tribunal determined that the deduction was legal under section 5 of the Act as illustrated above. Employer Advice This case essentially displays the necessity of the employer/employee agreement in relation to deduction/reduction in wages. As displayed in this case the risk being a Payment of Wages Claim, however additional risks include a Constructive Dismissal Claim, Industrial Relations Claim or Breach of Contract Claim. Before making any deduction from, or reduction to, an employee’s wage, employers should seek advice from the Peninsula 24 Hour Advice service on 01 855 50 50 where one of our HR and employment law experts will be happy to assist.
