Categories
Working Time/Rest Periods

Important High Court Decision in Sunday Premium Pay Case

Is it enough for an employer to provide in the contract of employment a provision to the effect that the employee’s rate of pay has been calculated to include a premium for working on Sunday?

Does the employer need to provide evidence of the amount or premium if there is a claim to the WRC or Labour Court?

The High Court has held that when it comes to the premium that is to be paid for working on Sunday, in accordance with section 14 of the Organisation of Working Time Act 1997, it is sufficient for the employer to provide an express term in the contract of employment that the requirement to work on Sunday has been taken into account in calculating the rate of employee’s pay.

In a 7th of October 2019 decision of Mr. Justice Binchy in Trinity Leisure Holdings Limited trading as Trinity City Hotel and Sofia Kolesnik and Natalia Alfimova the High Court held that the Rights Commissioner at first instance, and the Labour Court on appeal, had made a mistake in finding for the employees.

Background

The employees had contracts of employment which contained a provision that the hourly rate of pay..

“This includes your Sunday premium based on you getting every third Sunday off (i.e. you work two Sundays out of three). Payment will be made weekly with one week in arrears and will be paid directly into your bank account […]”

The employees had successfully argued at the Rights Commissioner service that as the contract failed to identify any element of the employees’ pay as being a premium for working on Sunday it followed that they were not paid the premium as provided for in the Organisation of Working Time act 1997.

The employer relied on the provision in the contract stating that the rate of pay took into account Sunday working and there was no obligation to identify how much is referable to working on Sunday.

The employees won their case at the Rights Commissioner service and the case was appealed to the Labour Court. The Labour Court agreed with the Rights Commissioner and found

“[…] the respondent failed to tender any evidence to the court in relation to what, if any, element of the complainant’s hourly rate of pay was specifically referable to her contractual obligation to work on Sundays”

In fact, the employer’s legal team argued that, inter alia, the Labour Court did not have jurisdiction to hear the claim as the employer had taken into account the need to work on Sunday in arriving at the rate of pay as required by section 14(1):

14.—(1) An employee who is required to work on a Sunday (and the fact of his or her having to work on that day has not otherwise been taken account of in the determination of his or her pay) shall be compensated by his or her employer for being required so to work by the following means, namely—

Decision

Mr. Justice Binchy found that the Labour Court was incorrect in finding that no evidence had been adduced to the Labour Court about the Sunday premium by reason of the fact that the contract of employment was adduced in evidence and it provided, in an express provision, that the requirement to work on Sunday was taken into account and held that the “language used in the contracts is plain English and could not be more clear.”

He went on to find that the only evidence given at either hearing was the contract of employment and that the requirement imposed by the Labour Court that the employer must adduce further evidence to show a Sunday premium was paid was incorrect in law.

The fact that there is a provision in a contract is not conclusive, the High Court held, but it is up to the employees to adduce evidence to shift the onus of proof in the matter to the employer. If the employee fails to do so he leaves the contract unchallenged and the employer is under no obligation to go into evidence on the issue.

But it was this very fact, that the employer had failed to go into evidence, that led to the Labour Court finding against him.

Finally, the Labour Court arrived at a decision on a matter of law because it had decided that a “clear statement in the contract of employment signed by both parties could not be relied upon, and instead must be proven in a particular way.” This was a mistake and the Labour Court was not entitled to do this.

Moreover, it also fell into error in deciding that the Organisation of Working Time act  1997 imposed an obligation on an employer to draw up a contract in a particular way-that is, explain the breakdown of wages referable to working on Sunday, or to adduce evidence at a hearing of a complaint  to prove a statement agreed to by an employee in the contract of employment.

These were findings of law, not fact, and the Labour Court was not entitled to make such findings.

Read the full decision of the High Court here.

Categories
Payment of Wages Working Time/Rest Periods

The Sunday Premium Rate of Pay-How Much Should Be Paid for Working on Sunday?

If you work on Sunday you are entitled to be paid a premium pursuant to section 14 of the Organisation of Working Time Act 1997,

14.— (1) An employee who is required to work on a Sunday (and the fact of his or her having to work on that day has not otherwise been taken account of in the determination of his or her pay) shall be compensated by his or her employer for being required so to work by the following means, namely—

( a) by the payment to the employee of an allowance of such an amount as is reasonable having regard to all the circumstances, or

( b) by otherwise increasing the employee’s rate of pay by such an amount as is reasonable having regard to all the circumstances, or

( c) by granting the employee such paid time off from work as is reasonable having regard to all the circumstances, or

( d) by a combination of two or more of the means referred to in the preceding paragraphs.

Paid time off or an allowance

You will note from section 14 of the Organisation of Working Time Act 1997 above that the Sunday Premium can be in the form of paid time off or the payment of an allowance of such amount as is reasonable in the circumstances.

Increased rate of pay

You will see that no specific amount is set out in the act for the rate of pay, it refers to ‘what is reasonable having regard to all the circumstances’. This leaves the Sunday Premium rate of pay open to negotiation between the parties and if agreement cannot be reached there may be a dispute referred to the WRC or Labour Court.

Labour Court guidance

It is to the Labour Court that we turn for guidance as to what is considered to be ‘reasonable’.  And from the decided cases we note a pattern emerging of the Labour Court finding that time and a third is considered to be ‘reasonable’ when it comes to the rate of pay.

Cases to be reviewed on this point include:

  • Chicken and Chips Limited t/a Chicken Hut and David Malinowski [DWT159]
  • Viking Security Limited and Valent [DWT1489]

However, the 33% premium is not a hard and fast rule and all the circumstances will be considered which led to a 25% premium being accepted as reasonable and even a 14% premium being accepted in Cadbury Ireland Limited v SIPTU [DWTO0720].

If you are an employer, therefore, you would have to be considering a Sunday Premium of at least 25% to have a good, stateable case that it is a ‘reasonable’ rate as envisaged by the Organisation of Working Time Act 1997.

Benefit in Kind not acceptable

The Labour Court has held that a premium must be paid and a benefit in kind-for example a free meal-is not acceptable and is not what was envisaged by the legislators when framing the act.

Composite rate of pay

If the contract of employment includes a rate of pay which claims to incorporate a Sunday Premium then the Sunday Premium must be identifiable; it is not good enough to simply state your rate of pay includes a Sunday Premium.

This is an easy mistake for an employer to make.

Update October 2019

An important decision was handed down from the High Court in this connection in October 2019, you can read about it here.

In essence, if a contract of employment contains a provision stating that the rate of pay has been calculated to take into account the requirement to work on Sunday this will almost certainly be sufficient and the employer will not have to provide evidence as to how much is being paid for working on Sunday. But you need to read the full decision of the case to fully understand the implications of this decision.

Categories
Working Time/Rest Periods

European Court of Justice Decision-All Working Hours Must Be Recorded and Unpaid Overtime Ended?

Are you working excessive overtime and not getting paid? The European Court of Justice issued an interesting decision this week (14th May 2019) when it ruled that companies in the EU must set up a system to record the hours of work of their employees. All EU member states must act on foot of this decision which has direct effect in member states. (Press release of the Court of Justice of the European Union).

The Court found that member states must “must require employers to set up an objective, reliable and accessible system enabling the duration of time worked each day by each worker to be measured.”

In this case a Spanish trade union had brought a case against a local branch of Germany’s Deutsche Bank and a ruling was needed as to whether a system had to be established to record working hours.

Member states must implement the working time directive and it is impossible to do so fairly if employees’ working hours are not recorded. The Spanish court found that 53.7 % of overtime hours of Spanish workers were not recorded.

Impact in Ireland?

Will this have any practical effect in Ireland, however, given that Irish employers already have an obligation to record working time of employees pursuant to the Organisation of Working Time Act 1997 and the various organisation of working time regulations.

Has Ireland failed to properly implement the working time directive if all workers hours are not being recorded, including unpaid overtime and those workers who are paid a salary?

It is suspected that many Irish employers do not accurately record the working hours of their employees and this decision should increase the pressure on them to do so.

It is expected that the Workplace Relations Commission (WRC) will carefully consider this decision and see is there a need to increase workplace inspections to check on working time records being kept.

On the one hand it is argued that Ireland already has legislation since 1997-the Organisation of working time act 1997-to ensure employees’ hours of work are recorded; others argue that there is not enough inspections carried out by the WRC and there is a culture o f non-compliance with the existing legislation in Ireland.

Time will tell whether this European Court of Justice decision will have any practical effect in the Irish workplace or not.

Read the full decision of the European Court of Justice here.

Categories
Working Time/Rest Periods

The Caring or the Rearing or the Breeding or Training of Racehorses- Changes in Working Time Law

Are you involved in the horse racing industry?

If you are you will probably be aware of Aidan O’Brien’s problems with the WRC (Workplace Relations Commission) and then the Labour Court concerning breaches of the Organisation of Working Time Act 1997.(You can read about those cases here).

O’Brien’s argument in those cases was that his workers should be considered workers involved in ‘agriculture’ because if this argument was accepted then the workers would be exempt from certain sections (11, 12, and 13) of the Organisation of Working Tim Act 1997 pursuant to the S.I. No. 21/1998 – Organisation of Working Time (General Exemptions) Regulations, 1998.

The exemptions arising from the 1998 regulations applied to:

1. An activity in which the employee is regularly required by the employer to travel distances of significant length, either from his or her home to the workplace or from one workplace to another workplace.
2. An activity of a security or surveillance nature the purpose of which is to protect persons or property and which requires the continuous presence of the employee at a particular place or places, and, in particular, the activities of a security guard, caretaker or security firm.
3. An activity falling within a sector of the economy or in the public service—
(a) in which it is foreseeable that the rate at which production or the provision of services, as the case may be, takes place will vary significantly from time to time,
or
(b) the nature of which is such that employees are directly involved in ensuring the continuity of production or the provision of services, as the case may be,
and, in particular, any of the following activites—
(i) the provision of services relating to the reception, treatment or care of persons in a residential institution, hospital or similar establishment,
(ii) the provision of services at a harbour or airport,
(iii) production in the press, radio, television, cinematographic, postal or telecommunications industries,
(iv) the provision of ambulance, fire and civil protection services,
(v) the production, transmission or distribution of gas, water or electricity,
(vi) the collection of household refuse or the operation of an incineration plant,
(vii) any industrial activity in which work cannot, by reason of considerations of a technical nature, be interrupted,
(viii) research and development,
(ix) agriculture,
(x) tourism.

Neither the WRC nor the Labour Court accepted this argument and O’Brien appealed the case to the Civil Courts.

This problem had arisen as a consequence of the Industrial Relations (Amendment) act 2015 defining ‘agriculture’ as
 

 ‘agriculture’ means—
(a) (i) the production of animals, including the production of meat and other animal produce intended for human consumption,
(ii) the sorting and packing of meat and other animal produce, and
(iii) the production, sorting, and packing of crops, including fruit and vegetables, intended for human or animal consumption,
on farm land (within the meaning of section 664 of the Taxes Consolidation Act 1997 ), and
(b) horticulture, including market gardening, garden nurseries and nursery grounds;”

This was not of much use to racehorse training or breeding as it refers to ‘the production of animals’ but excluded, for the first time, the training of animals.

19th December, 2018 Regulation

On 19th December, 2018 a new Regulation was signed into law, EUROPEAN COMMUNITIES (ORGANISATION OF WORKING TIME) (GENERAL EXEMPTIONS) (AMENDMENT) REGULATIONS 2018 This regulation had only one purpose:

These Regulations clarify that the term “agriculture” in the Schedule to the Organisation of Working Time (General Exemptions) Regulations 1998 (S.I. No. 21 of 1998), includes, inter alia, “the caring for or the rearing or the breeding or training of racehorses” for the purpose of those Regulations.

This means that the exemptions from certain sections of the Organisation of Working Time Act 1997 now apply to workers who are engaged in the “the caring for or the rearing or the breeding or training of racehorses”.

Relevant Law

The Organisation of Working Time Act, 1997

S.I. No. 21/1998 – Organisation of Working Time (General Exemptions) Regulations, 1998

EUROPEAN COMMUNITIES (ORGANISATION OF WORKING TIME) (GENERAL EXEMPTIONS) (AMENDMENT) REGULATIONS 2018

Industrial Relations (Amendment) Act 2015.

Categories
Working Time/Rest Periods

Excessive Working Hours and the Danger of Digital Presenteeism-Labour Court Awards €7,500 to Employee

digital presenteeism

Are you expected to work like a mule in your job?

As an employer do you run the risk of breaches of the maximum number of hours permitted in the working week?

The Labour Court has found in favour of an employee, Grainne O’Hara, who claimed she worked excessive hours and awarded her compensation of €7,500.

The employee’s case

The employee claimed she was required to work approximately 60 hours per week. This is a breach of the Organisation of Working Time act 1997 which prohibits a working week in excess of 48 hours over a reference period.

She had commenced employment as a business development executive which involved a good deal of travel but her contract of employment was for 40 hours per week.

The evidence provided by the employee involved emails sent and received on a regular basis after 5 pm and up to midnight. She also produced copies of emails sent after midnight and before normal starting time, and this evidence was not contradicted by the employer, Kepak Convenience Foods Unlimited Company, as it failed to provide the full email records involving this employee, despite being requested to do so by the employee.

The employer’s case

The employer claimed that the employee was trained to do her job with the help of an induction programme and she was simply inefficient in carrying out her job. The employer claimed there was no need for her to work in excess of 48 hours per week and the volume of work she had to undertake was in line with that of her colleagues.

The law

Section 15 Organisation of Working Time act 1997:

Weekly working hours.

15.— (1) An employer shall not permit an employee to work, in each period of 7 days, more than an average of 48 hours, that is to say an average of 48 hours calculated over a period (hereafter in this section referred to as a “ reference period ”) that does not exceed—

( a) 4 months, or

( b) 6 months—

(i) in the case of an employee employed in an activity referred to in paragraph 2, point 2.1. of Article 17 of the Council Directive, or

(ii) where due to any matter referred to in section 5 , it would not be practicable (if a reference period not exceeding 4 months were to apply in relation to the employee) for the employer to comply with this subsection,

or

( c) such length of time as, in the case of an employee employed in an activity mentioned in subsection (5), is specified in a collective agreement referred to in that subsection.

(2) Subsection (1) shall have effect subject to the Fifth Schedule (which contains transitional provisions in respect of the period of 24 months beginning on the commencement of that Schedule).

(3) The days or months comprising a reference period shall, subject to subsection (4), be consecutive days or months.

(4) A reference period shall not include—

( a) any period of annual leave granted to the employee concerned in accordance with this Act (save so much of it as exceeds the minimum period of annual leave required by this Act to be granted to the employee),

F8 [ ( aa ) any period during which the employee was absent from work while on parental leave, force majeure leave or carer’s leave within the meaning of the Carer’s Leave Act, 2001, ]

( b) any absences from work by the employee concerned authorised under the Maternity Protection Act, 1994, or the Adoptive Leave Act, 1995, or

( c) any sick leave taken by the employee concerned.

(5) Where an employee is employed in an activity (including an activity referred to in subsection (1) (b) (i))—

( a) the weekly working hours of which vary on a seasonal basis, or

( b) as respects which it would not be practicable for the employer concerned to comply with subsection (1) (if a reference period not exceeding 4 or 6 months, as the case may be, were to apply in relation to the employee) because of considerations of a technical nature or related to the conditions under which the work concerned is organised or otherwise of an objective nature,

then a collective agreement that for the time being has effect in relation to the employee and which stands approved of by the Labour Court under section 24 may specify, for the purposes of subsection (1) (c), a length of time in relation to the employee of more than 4 or 6 months, as the case may be (but not more than 12 months).

Section 25 (1) of the Organisation of Working time Act, 1997 states:

25.—(1) An employer shall keep, at the premises or place where his or her employee works or, if the employee works at two or more premises or places, the premises or place from which the activities that the employee is employed to carry on are principally directed or controlled, such records, in such form, if any, as may be prescribed, as will show whether the provisions of this Act are being complied with in relation to the employee and those records shall be retained by the employer for at least 3 years from the date of their making.

Also, section 25(4) states:

4) Without prejudice to subsection (3), where an employer fails to keep records under subsection (1) in respect of his or her compliance with a particular provision of this Act in relation to an employee, the onus of proving, in proceedings before a rights commissioner or the Labour Court, that the said provision was complied with in relation to the employee shall lie on the employer.

What the Labour Court found

Firstly, it found that the employer did not keep records as required by section 25(1). The consequence of this is that the employer must prove compliance with the act.

However, the Court did not find that the employer managed to discharge this burden of proof and accepted the evidence of the employee.

The Labour Court also focused on the work ‘permit’ in section 15 of the act: An employer shall not permit an employee to work, in each period of 7 days, more than an average of 48 hours, that is to say an average of 48 hours

The Labour Court found that even if the evidence of the employer was that the employee was not required to work in excess of 48 hours to do the job the fact remained that she proved that she had, in fact, worked in excess of 48 hours. Thus, the employer was in breach as the employer’s obligation is not to ‘permit’ the employee to do so.

Moreover, The Court notes that the Respondent did not produce a full file of the Complainant’s emails and offered no evidence to contradict her evidence in this regard.

In conclusion the Labour Court found that the complaint was well founded and awarded her compensation of €7,500. She had previously been awarded €6,240 by the Workplace Relations Commission and this Labour Court hearing was an appeal of that decision.

You can read the full case here.

Takeaway: digital presenteeism and hard evidence

Firstly, the Chartered Institute of Personal Development (CIPD) in the UK claims that there is a growing problem of “presenteeism” in the workplace.

This originally started out as the phenomenon of people showing up for work even when they were sick but the use of digital technology in the workplace has contributed to a growing social problem of “digital presenteeism”.

The use of laptops, smartphones, tracking devices, apps are all leading to an erosion of the distinction between work life and home life and the problem of digital presenteeism.

Secondly, many employment disputes which end up in the Workplace Relations Commission, the Labour Court, or Civil Court may not have any hard, documentary evidence and may well be a swearing match between the employee and employer. By this I mean the employee will claim one thing was said or happened and the evidence of the employer will be in direct contradiction of this.

In this case, and those involving technology such as emails or apps or tracking devices, there was hard evidence of emails sent and received outside the normal working hours and this evidence was critical in the employee’s win.