Categories
Working Time/Rest Periods

Calculating Hours Worked for Banded Hours Contracts-Is Annual Leave to Be Counted?

part-time-work-ireland

This case, between a ground staff member and an airline, turned on the question of how you are expected to calculate the hours worked for the purposes of awarding an employee a banded hours contract.

The employee had been placed on a banded hours contract pursuant to the Employment (Miscellaneous Provisions) Act 2018. Section 16 of this act provides for banded hours contracts to be given to employees based on the number of hours worked per week by an employee over a reference period.

In this case the employer placed the employee on a band which reflected hours worked over a reference period but did not include hours of full annual leave entitlement.

The employer’s position was that the legislation referred to the hours worked by the employee, and the employer was not obliged to consider time on annual leave. However, the employer did, on a discretionary basis, award some hours to the employee to cover the annual leave-that is, 4 hours “work” were awarded for each day of annual leave, and there was 21 such days.

The employer’s position was that there was no obligation to consider time that the employee was absent from work, regardless of the reason. They calculated the hours for the purposes of a banded hours contract by reference to clock in data, basic hours and overtime worked, and divided the total hours worked by 52 to arrive at an average weekly hours worked.

The employer also contended for the definition of working time as set out in the Organisation of Working Time Act 1997, section 2 as follows:

working time” means any time that the employee is—

(a) at his or her place of work or at his or her employer’s disposal, and

(b) carrying on or performing the activities or duties of his or her work,

and “work” shall be construed accordingly

Adjudicator decision

The adjudicator held that there was no express provision in the Employment (Miscellaneous Provisions) Act 2018 as to how absences from work are to be treated and no provision which deems time spent on annual leave (or other absences) as time worked for the purposes of section 18A of the Organisation of Working Time Act 1997.

Nonetheless the adjudicator held that the legislators, when drafting the legislation, did not intent the employee should suffer any disadvantage by taking annual leave. And section 22(2) of he Organisation of Working Time Act 1997 states

(2) For the purposes of section 21 , time off granted to an employee under that section or section 19 shall be regarded as time worked by the employee.

He went on to hold

In the instant case, if the mode of calculation canvassed by the respondent were to prevail, as a matter of mathematical fact, in every case where an employee avails of annual leave, her average weekly working hours over a 12-month reference period would be artificially reduced below their actual average, or normal working hours. Such a result would be inconsistent with other provisions of the Act and could not reflect the plain intentions of the Oireachtas.

For all these reasons, it seems clear that an employee average weekly working hour in a reference period should be ascertained by taking the total number of hours worked by that worker over the reference period and dividing that number by the number of weeks actually worked in the same period.

Read the full decision here in ADJ-00024906

Categories
Working Time/Rest Periods

Flexible Working Arrangements Are on the Way

Would you like to avail of a ‘flexible working’ arrangement?

Would your lifestyle be improved beyond recognition by a little bit of space and stillness that flexible working might bring?

In August 2019 a new EU Directive came into force: the EU Directive on Work-Life Balance. Member states have three years within which to implement the Directive.

The goal of the directive is to increase the participation of women in the workforce and to allow workers make a request for flexible working. The bad news, however, is that there is no obligation on the employer to grant the request if he can objectively justify the refusal.

Flexible working arrangements could take many forms, for example

  • Part time work
  • Working from home
  • Working outside normal work hours.

Takeaway for employers

Employers should put in place a workplace policy for flexible working. This will allow expectations to be managed on all sides, especially if the policy is fair, transparent, and consistent.

Once employers implement flexible working arrangements in the workplace, they need to be mindful of their obligations in respect of breaks between shifts, and other obligations, under the Organisation of Working Time Act 1997.

Keeping an eye on working time will be an important task to be carried out by supervisors or management. This may require extra training for staff who have this responsibility of balancing the rights of the employee under flexible working arrangements and their rights under the Organisation of Working Time Act 1997.

Employers must also ensure that they comply with their record keeping obligations regarding working time and rest breaks. If they fail to do so they will have great difficulty defending claims of breaches in respect of working time and/or rest breaks at the Workplace Relations Commission.

The CJEU in a 2019 Spanish case involving Deutsche Bank SAE (C-55/18) held that member states must ensure that employers have a functioning system in place to record working time accurately. Without such a system it is impossible to ascertain whether the employee’s rights are being respected or not.

That CJEU case, the Judgment of the Grand Chamber,  Federación de Servicios de Comisiones Obreras (CCOO) v Deutsche Bank SAE, in which a reference was made from the Natinoal High Court in Spain for a preliminary ruling can be found here.

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.