November 01, 2019
Complainant fails in dispute with Employer over expiration of Fixed Term Contract
Adjudication Reference: ADJ-00019224
Background:
The Complainant was recruited by the Respondent who operates an education centre in the north midlands. The Complainant claims that he was offered a permanent post while the Respondent contends, he had a fixed term employment contract of 6 months, which came to an end at the expiration of that period.
Summary of Complainants Case:
The Complainant lodged two complaints:
CA-00025095-002 - The complaint for minimum notice was withdrawn at the Adjudication hearing.
CA-00025095-001 - The Complainant applied for a position of Operations Supervisor of the Centre in November 2017. He was interviewed on the 19th of December 2017. On the 20th December 2017 a Manager with the Respondent telephoned him and told him that the role of Centre Manager was now vacant and that he was offering him this role instead. The Manager told him that the role would be for 6 months. The Complainant explained that he would not give up his current permanent position for a 6-month post. The Manager told him that the role had to be advertised because of the statutory framework that governed the Respondent but that he wanted to offer him a permanent post. He told him that he could apply once the position was advertised but that all going well the post would be his, permanently. The Complainant accepted the post and started work.
The Manager telephoned him in April 2018 and explained that the post would now be advertised. The Complainant took this to mean that the proper channels were being followed but that the position was still his.
The interviews were held on 23 July 2019 and the Manager was not on the interview panel due to ill health. On the 26th of July 2019, two days before the fixed term was due to expire, the Complainant received an email from another Manager informing him that he had not got the job and that he had to leave the employment the following day. The Complainant was deeply shocked when he got the email and by the disrespectful way that he was treated.
The Complainant accepted that he did not discuss the permanence or otherwise of his job with anybody after the telephone conversation with his Manager on the 20th December 2017. His written contract was discussed and amended by his Manager in April. His Manager told him about the post being advertised also in April and he was interviewed for the position in July, but at all times he believed that the Manager would do right by him and honour the verbal commitment that was given to him on December 20th 2017.
Despite the advertising of the post and the conversations around this, the Complainant always understood that the job would be his on a permanent basis after 6 months as otherwise he would not have accepted it in December 2017. People don’t leave permanent jobs for temporary jobs when they have a family to support.
Summary of Respondent’s Case:
In regards CA-00025095-001 - The Complainant was offered a fixed term 6-month contract in December 2017. The Respondent could not say exactly what was said to the Complainant during the telephone conversation between the Manager and the Complainant on the 20th of December 2017 because the Manager was unavailable to attend the Adjudication due to declining ill health, however they could confirm that he received a letter dated 2nd January from his alleged colluding Manager setting out the offer of the post. It explicitly stated that the post was for a fixed term of 6 months after which there would be an open competition. It was these terms that the Complainant accepted by email later that day.
It is untrue therefore for the Complainant to say that the job advertising process was an artifice and that he was promised the job all along. That is not the manner in which staff are recruited to the Respondent and no one else in the management were party to this alleged collusion. It is also significant that the recruitment process was the decision of three managers, not just the one with whom the Complainant allegedly had the agreement.
Furthermore, internal emails show that the Manager emailed the Complainant 3 months prior to the expiration of the fixed term and invited him to apply for the post which would soon be advertised. This is not the actions of someone who had already assured the person that the job was theirs already.
In addition, the Complainant received his fixed term contract in April 2018 which again expressly states that the contract is a fixed term contract due to expire on 28 July 2018 and the Complainant signed this contract. In so doing the Complainant expressly signed up to these terms agreed cannot contend anything other than that he had accepted that his employment was for 6 months only.
The Complainant admitted in evidence that when he received this contract in April 2018, he discussed the contract with his Manager. This was because a date in the contract was wrong and he asked his Manager to rectify the date. This would have been a natural time to discuss the permanence or otherwise of his position and yet the Complainant’s evidence was that following their telephone conversation of 20 December 2017 he never discussed the matter again with his Manager. This is not the actions of someone who believes that the job was assuredly his.
The Respondent submits that the fixed term contract signed by the Complainant binds him to the terms of that contract.
Findings and Conclusions:
The Adjudicator did not disbelieve the Complainant when he says that on December 20th 2017, he believed that it was likely that his temporary role would be made permanent after six months. At that time the Respondent was keen to get him to take the role, given that they unexpectedly were faced with a vacancy in the role of Centre Manager. The Adjudicator believed that during the phone call the manager encouraged the Complainant to take the job and that all going well he could apply for and get the post on a permanent basis. However, the Adjudicator did not accept that this belief was based on an unequivocal assurance by the manager that the 6-month fixed term was not fixed at all and could be ignored.
Once he received the email on 2 January which clearly expressed the fixed term to be 6 months, the Complainant should have sought further clarity from his Manager before taking up the post. Furthermore, under the law of contract, a person is expected to understand and is assumed to agree with a document that sign their name to and the contract that the Complainant signed in April 2018 stated it clearly to be a fixed term contract of 6 months.
Although the Adjudicator cannot exclude the possibility that what the Complainant says is true, the Adjudicator is of the view that by agreeing to the terms expressed in the letter dated 2 January 2017 and the signed contract dated 18 April 2018 are fatal to this complaint
Decision:
In regards CA-00025095-002 - This complaint is withdrawn.
In regards CA-00025095-001 - On the balance of probabilities, it was found that the Complainant’s contract of employment was terminated due to the expiration of a fixed term contract that he signed on 19 April 2018 and that he was not dismissed. The complaint is not well founded.
Adare Human Resource Management Commentary:
Fixed Term Contracts of Employment can have a number of benefits to Employers. They can be very useful to cover a period of maternity leave, long-term sick leave, or even an interim role. When a candidate is given a Fixed Term Contract for an interim position, it should be noted that they are not necessarily automatically entitled to the role and they should undergo the recruitment and selection process just like any other candidate.
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Complainant fails to be awarded some entitlements upon cessation of employment
Adjudication Reference: ADJ-00020258
Background:
The Complainant is seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991. The Complainant was employed by the Respondent as a Sales Director from 1st May 2018 until 31st January 2019.
The Complaint submitted to the Workplace Relations Commission is referred under section 6 of the Payment of Wages Act, 1991 and was received by the WRC on 3rd March 2019.
Summary of Complainants Case:
The Complainant states that he was not paid all his entitlements on the cessation of his employment. These unpaid entitlements were listed as a Pension Contribution of €3,750 and a Holiday Entitlement of €1707. The Complainant also mentioned three days in lieu of having to travel west to meetings.
Summary of Respondent’s Case:
The Respondent wrote to the Workplace Relations Commission on 19th March 2019 providing a statement of events in relation to this complaint. A copy of this statement was sent to the Complainant on 1st April 2019. The Respondent contends that all monies owing to the Complainant were fully discharged and also states that the Respondent had been very generous with the Complainant at the cessation of employment.
Findings and Conclusions:
In coming to any decision in this complaint the Adjudicator must consider the Complaint under the Payment of Wages Act 1991.
In regards the Pension payment:
The Payment of Wages Act 1991 (section 1 Interpretation) describes wages as follows:
“wages”, in relation to an employee, means any sums payable to the employee by the employer in connection with his employment, including –
a) Any fee, bonus or commission, or any holiday, sick or maternity pay, or any other emolument, referable to his employment, whether payable under his contract of employment or otherwise, and
b) Any sum payable to the employee upon the termination by the employer of his contract of employment without his having given to the employee the appropriate prior notice of the termination, being a sum paid in lieu of the giving of such notice:
Provided however that the following payments shall not be regarded as wages for the purposes of this definition:
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Any payment in respect of expenses incurred by the employee in carrying out his employment,
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Any payment by way of a pension, allowance or gratuity in connection with the death, or the retirement or resignation from his employment, of the employee or as compensation for loss of office
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Any payment referable to the employee’s redundancy
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Any payment to the employee otherwise than in his capacity as an employee
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Any payment in kind or benefit in kind.
From this definition a pension contribution paid by an employer cannot be considered as wages. This part of the complaint therefore is not well founded and fails.
In regards the Holiday entitlement:
The Complainant contends that he was due payment of €1707 when his employment ended. By email dated 29th of January and sent to the Complainant by Mr BA it was stated that the Complainant had taken the following days as annual leave:
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Monday 9th July 2018 to Friday 13th July 2018 - total 5 days.
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Monday 16th July 2018 to Friday 20th July 2018 - total 5 days.
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Monday 23rd July 2018 to Friday 27th July 2018 - total 5 days.
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Monday 24th December 2018 - total 1 day.
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Thursday 27th December 2018 - total 1 day.
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Friday 28th December 2018 - total 1 day.
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Monday 31st December 2018 - total 1 day.
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Total days taken - 19 days
There appears to be some dispute over the four days taken at the Christmas period. The law in relation to annual leave is quite exact and states as follows:
Section 20 (1) The times at which annual leave is granted to an employee shall be determined by his or her employer having regard to work requirements and subject –
a) To the employer taking into account -
- the need for the employee to reconcile work and family responsibilities,
- the opportunities for rest and recreation available to the employee
b) To the employer having consulted the employee or the trade union (if any) of which he or she is a member, not later than 1 month before the day on which the annual leave or, as the case may be, the portion thereof concerned is due to commence, and
c) To the leave being granted within the leave year to which it relates or, with the consent of the employee, within the 6 months thereafter.
In this instant case there appears to have been no consultation between the employer and employee in relation to the four days around the Christmas period i.e. 24th December 2018, 27th December 2018, 28th December 2018 and Monday 31st December 2018.
Adopting a strict application of the law the Adjudicator decided that these four days cannot be considered annual leave days.
The Complainant was employed for a period of exactly nine months, during this period he would have accrued a holiday entitlement of 15 days pursuant to section 19 of the Act. Having discounted the four days at the Christmas period the Complainant took 15 days, this is what he had earned during his period of employment per the Organisation of Working Time Act 1997.
Having considered this element of the complaint it was found that it is not well founded and fails.
In relation to the three lieu days mentioned in the complaint the Adjudicator did not have enough information regarding the company policies to make a decision. It could be argued that the three days in lieu of the travelling days were taken at the Christmas period.
Decision:
Section 41 of the Workplace Relations Act 2015 requires a decision in relation to the complaint in accordance with the relevant redress provisions under Schedule 6 of that Act.
The Complaint as presented under the Payment of Wages Act 1991 is not well founded and therefore fails.
Adare Human Resource Management Commentary:
This case is a prime example for Employers that although there could be a risk (in this instance the potential pension payments due), it is imperative that a Complainant takes their claim under the correct piece of legislation. Taking that into consideration, if an Employer does receive a complaint from the WRC, they should ensure that the claims fall under the correct piece of legislation and if not, this should be highlighted to the Adjudication Officer and asked to be thrown out as it does not fall within the remit of the hearing.
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Complainant awarded payment for wages even though business ran out of funds
Adjudication Reference: ADJ-00020677
Background:
The issues in dispute concern the closure of a Shop in a Leinster Town and related matters concerning the payment/non-payment of staff.
Summary of Complainants Case:
In October 2018 the owner of the Business went to India on family business. The Complainant and a colleague were left in change of the Shop and associated workshop. Communications with the owner became difficult and from January 2019 no wages or salary was paid. The Complainant eventually left the employment on the 26th March 2019. He was seeking a Constructive Dismissal type payment for wages lost from January to March.
Summary of Respondent’s Case:
The Respondent did not appear at the start of the hearing. However, a detailed written submission was received. In this submission the severe personal difficulties experienced by the Respondent (An Irish/Indian citizen) and his immediate family while in India were outlined. While he was distracted by these matters in India, he had trusted the Complainant to run the business in a proper fashion. However, this was not the case and the business was effectively destroyed. The stock sold for cash and customers were invoiced under the name of the Complainant rather than the Company. The Business effectively closed up at the start of April 2019 with no funds left. The allegations made by the Complainant are completely false and in particular the loss of any wages. The Complainant effectively sold the Company stock and pocketed the cash. This is now a matter for the Gardai.
Findings and Conclusions:
The differences in versions of events in this case were huge. It was clear that by the 1st April 2019 the business had run out of funds. It was also clear from the oral questioning of the Complainant by the Adjudication officer that the staff had effectively “cannibalised” some or all of the stock to ensure some form of renumeration was available. The true value of the stock sold was very unclear. The Respondent valued it at approximately €50,000.
All things considered this was an Industrial Relations Act ,1969 claim and not a Payment of Wages Act, 1991 claim.
A judgment call, having considered all the available evidence, was required from the Adjudicator.
As the value of the stock sold could not be ascertained, the Company is now out of business and the Respondent evidence was largely unsupported I decided to Recommend a Payment of €1,000 as a full and final settlement to the Complainant.
Decision:
A Payment of €1,000 in favour of the Complainant as a full and final settlement is recommended.
Adare Human Resource Management Commentary:
When a business closes down it should be noted that there is still a legal obligation on Employers to ensure staff are paid appropriately for the work in which they carry out. It is not sufficient to simply advise that there are “no funds left”.