Employer Resources Newsletter - February 2020

KEY CONSIDERATIONS FOR UNDERTAKING A WORKPLACE INVESTIGATION​

What is a workplace investigation?

A workplace investigation is an independent and unbiased investigation into a current problem in the workplace. The demand for investigations in the workplace is increasingly growing. The aim of a workplace investigation process is to gather relevant evidence to determine whether or not an Employee has engaged in misconduct.

Terms of Reference

The Terms of Reference set out the issues, objectives and scope of the investigation and should be clear and concise. The Terms of Reference should be designed to fit the allegation which has arose and they should consider the following;

1. Core issues which need to be addressed in the investigation;
2. The investigator’s role and responsibilities and the procedure to be followed;
3. Overall timeframe and interim deadlines;
4. Identifying the task involved and expected outputs (factual report).

When would an investigation be necessary?

An Organisation may choose to initiate an investigation when an incident(s) has occurred that the Organisation may deem potentially inappropriate or a potential breach of their policies such as;

• A complaint against an Employee in relation to performance or conduct;
• A complaint from an Employee / client / third party in respect of the Employee;
• A complaint of bullying, harassment or sexual harassment.

How Organisations get the Investigation Process Wrong?

When Organisations are carrying out investigations in theory, they are seeking to identify the specific details of an incident by determining what happened, how it happened, and when it happened, if in fact it did happen.

However, by trying to find out the above, Organisations often find themselves in a difficult position for a number of reasons. Organisations need to be mindful that the risks associated with poor investigation practices are not insignificant, and mistakes can expose Organisations to significant financial, legal and reputational risks.

Key mistakes that Organisations often make during the course of an internal workplace investigation include:

• use of a poorly drafted policy;
• a lack of pre-investigation planning;
• being unclear as to what policy or procedure is being followed;
• combining the investigation and disciplinary steps;
• lack of, or a poorly drafted, terms of reference;
• relying on “untested” information and ignoring discrepancies;
• failing to establish a process that is perceived as independent and non-bias; and
• delay in undertaking an investigation.

From our experience we see than more often than not, these mistakes are the results of a lack of experience and skill on the part of the internal investigator appointed by the Organisation. Therefore, we suggest that when the need for an investigation arises for an Organisation, they may benefit significantly through reaching out to a third party in order to get an independent view on the situation and the process that should be followed.

As mentioned above, another common factor for Organisations getting the investigation process wrong that we have seen a lot of over the last 12 months, is the usage of a poorly draft policy. In our view, having an investigative process guided by a poorly drafted policy is setting the Organisation up for a failed or flawed investigation – and this is sometimes only evident to an Organisation when their policy and procedure actually gets used.

Another risk with an investigation is the absence of an explicit definition of what is and is not deemed to be fair, in the Organisation policies and procedures which can result in some difficulty in deciding what actions must be taken to ensure that fair procedures, are adopted.

Where the conclusion is reached that the investigatory process was unfair, this will no doubt be to the detriment of one or all the parties involved in the matter. For Organisations, where they are in possession of a report compiled in unfair circumstances, they will most probably be placed in a difficult position with regards to the investigation report and next steps.

Principles of Natural Justice

Ultimately, whether it is an investigation, or a disciplinary hearing being carried out, the principles of natural justice must always be adhered to. Employees should always be provided with the specific allegations against them in writing and given a copy of any evidence that is being relied on. Where there are witness statements, or there is evidence gathered in the Investigation process, this must also be provided to the Employee in advance of the investigation or disciplinary hearing, to afford the Employee the opportunity to respond to these at that time.

If you require assistance with regards to undertaking investigations in the workplace, contact the team at Adare Human Resource Management – info@adarehrm.ie / 01 5613594.

Complainant awarded €17,462.70 due to a number of breaches by Respondent
ADJ-00016289

Background:

The complainant commenced employment with the accommodation and food service provider in November 2009 at €10 per hour gross pay. On July 15th 2018 he was (allegedly) sent a letter serving to terminate his employment. On August 14th 2018 the complainant lodged complaints with the W.R.C. in respect of Sunday work, daily rest periods, public holidays, rest breaks, redundancy pay and minimum notice entitlements.  

Summary of Complainant’s Case:

CA-00021139-001 – On Tues. Dec. 17th, 2019 the complainant formally withdrew this complaint on the appropriate W.R.C. form.

CA-00021139-002 – According to the complainant, his shift normally commenced at 7 a.m. and the relevant 24 hour cycle ended at 7 a.m. the following morning. In this 24-hour cycle, the complainant only had a break of eight hours (from 3 P.M. to 11 P.M.), whereas he was entitled (under the relevant statute) to a break of at least 11 hours. These are described by the complainant as ‘serious breaches which took place weekly on at least two occasions per week’, precluding scope for the requisite recuperation. It is alleged that these frequent breaches constituted a major health and safety risk to the complainant.

CA-00021139-003 – According to the complainant, he was remunerated for working public holidays by being given an additional €50 (i.e. equivalent to 5 hours pay). However, a shift is eight hours. The standard compensation of €50 was not adequate.

CA-00021139-004 – According to the complainant, he was required to manage the reception at the respondent's premises, but was not assigned any rest breaks whilst in the course of his employment, constituting a health and safety risk to him.

CA-00021139-005 – The respondent issued the complainant with a letter communicating notice of redundancy, dated 13/07/18, specifying that the redundancy was to take effect from 05/08/18. However, the respondent subsequently sought to withdraw the dismissal notice, and asserted that the complainant was not redundant. According to the complainant, one cannot withdraw a dismissal or redundancy notice unilaterally. Hence, the complainant sought the appropriate statutory redundancy payment.

CA-00021139-006 – The complainant is entitled under statute to 4 weeks’ notice of termination. However, he only received three weeks’ notice. Accordingly, one week's pay was sought, reflecting the difference between the three weeks’ notice received and the four weeks’ notice he was entitled to receive.

Summary of Respondent’s Case:

CA-00021139-001 - On Tues. Dec. 17th, 2019 the complainant formally withdrew this complaint on the appropriate W.R.C. form.

CA-00021139-002 – According to the respondent, the Organisation of Working Time (General Exemptions) Regulations 1998 ‘recognises that it may not be possible to guarantee uninterrupted rest breaks for workers engaged in certain activities such as those that concern services relating to the reception…’.

That is, that the complainant - as a receptionist - is not entitled to relief under this heading of claim, as he is an exempt worker via s.11 of the 1997 Act.

CA-00021139-003 – According to the respondent, any potential claim under this heading is limited to the two public holiday dates actually worked by the complainant (i.e. 2 April 2018 and 7 May 2018) and it is also limited by the amount already paid to the complainant by the respondent, (as accepted by the complainant), namely €50 (per day).  Hence, any compensation awarded to the complainant should be limited to €60.

CA-00021139-004 – According to the respondent, the Organisation of Working Time (General Exemptions) Regulations 1998 ‘recognises that it may not be possible to guarantee uninterrupted rest breaks for workers engaged in certain activities such as those that concern services relating to the reception…’.

That is, that the complainant is not entitled to relief under this heading of claim, as he is an exempt worker via s.11 of the 1997 Act.

CA-00021139-005 – According to the respondent, as per s.9 (2) of the relevant 1967 Act, an employee is not considered to be dismissed if he is re-engaged by the same employer under a new contract of employment and that offer of new employment was made before the end of the previous contract and takes effect immediately on the ending of that employment. 

On 26 July 2018, the respondent informed the complainant that it had found alternative employment for the complainant, which was to commence immediately following the end of the original contract on 5 August 2018. The provisions of the complainant’s role - as to the capacity, place, terms and conditions of his employment - did not differ from the initial position immediately before termination (5 August 2018).  Furthermore, the terms of the new contract merely changed the title from ‘Receptionist’ to ‘Security Guard’. 

There were no other differences in the offer of alternative employment. Accordingly, no (statutory) redundancy payment is due.

CA-00021139-006 – As the complainant voluntarily terminated his employment, notice payment is not due.

Findings and Conclusions:

CA-00021139-001 – On Tues. Dec. 17th, 2019 the complainant formally withdrew this complaint on the appropriate W.R.C. form.

CA-00021139-002 – Based upon the dataset furnished to the complainant’s representative, there were ~27 breaches of the relevant provision between Nov. 1st 2017 and July 24th 2018 (of which ~18 occurred in the relevant 6 month period pertaining to the claim (i.e. from Feb. 14th to Aug. 14th, 2018)). According to the respondent, the Organisation of Working Time (General Exemptions) Regulations 1998 ‘recognises that it may not be possible to guarantee uninterrupted rest breaks for workers engaged in certain activities such as those that concern services relating to the reception…’.

However, the relevant quotation fails to close off the provision in the regulation, which exempts those involved in: ‘the provision of services relating to the reception, treatment or care of persons in a residential institution, hospital or similar establishment’.

Notably, the complainant was a ‘hotel employee’ in the accommodation and food services sector.
CA-00021139-003 – According to the respondent, any potential claim under this heading is limited to the two public holiday dates actually worked by the complainant, namely 2 April 2018 and 7 May 2018 and is also limited by the amount already provided to the complainant by the respondent, as accepted by the complainant, namely €50. 

Hence, any compensation awarded to the complainant should be limited to €60. However, it should be noted that the level of compensation awarded should address the criteria set out by the European Court of Justice in the case of Sabine Von Colson and Elisabeth Kamann v Land Nordrhein-Westfalen (1984 ECR 1891).

CA-00021139-004 – According to the respondent, the Organisation of Working Time (General Exemptions) Regulations 1998 ‘recognises that it may not be possible to guarantee uninterrupted rest breaks for workers engaged in certain activities such as those that concern services relating to the reception…’.

However, the relevant quotation fails to close off the provision in the regulation, which exempts those involved in: ‘the provision of services relating to the reception, treatment or care of persons in a residential institution, hospital or similar establishment’. Notably, the complainant was a ‘hotel employee/receptionist’ in the accommodation and food services sector.

CA-00021139-005 – The respondent’s correspondence to the claimant dated July 13th, 2018 clearly provides for ‘Termination of your position with Redundancy’, with an enclosed ‘copy of your redundancy calculation’. The respondent’s correspondence to the claimant dated July 26th, 2018 refers to the aforementioned ‘redundancy letter’ but offers to ‘accommodate you for two shifts during the week in lieu of your weekend shifts’. In such (significantly altered contractual) circumstances, it was not unreasonable for the claimant to refuse the offer. 

CA-00021139-006 – As the complainant did not voluntarily terminate his employment – see the respondent’s correspondence to the claimant dated July 13th, 2018 - notice payment is due.

Decision:

Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint(s) in accordance with the relevant redress provisions under Schedule 6 of that Act.

Section 39 of the Redundancy Payments Acts 1967 – 2012 requires that I make a decision in relation to the complaint in accordance with the relevant redress provisions under that Act.

CA-00021139-001 – On Tues. Dec. 17th, 2019 the complainant formally withdrew this complaint on the appropriate W.R.C. form.

CA-00021139-002 – For the reasons set out above, I find that the complaint is well founded and the respondent shall pay to the complainant redress of €5,000.

CA-00021139-003 – For the reasons set out above, I find that the complaint is well founded and the respondent shall pay to the complainant redress of €300.

CA-00021139-004 – For the reasons set out above, I find that the complaint is well founded and the respondent shall pay to the complainant redress of €5,000.

CA-00021139-005 – For the reasons set out above, I find that the complaint is well founded and the respondent shall pay to the complainant redress in the form of the agreed statutory redundancy sum of €6,792.70.

CA-00021139-006 – For the reasons set out above, I find that the complaint is well founded and the respondent shall pay to the complainant redress of €370.

Complaint not well founded in relation to alleged unfair calculation of wages
ADJ-00024470

Background:

In July 2019, the complainant had a motorcycle accident, with the result that she was absent for 11 days and five hours. Her complaint is that the method used by her employer to calculate her deduction in pay is unfair and resulted in a loss to her of €117.54.

Summary of Complainant’s Case:

When she had the accident in July 2019, the complainant had used up seven out of 10 days of paid sick leave to which she was entitled at that time. She explained to me that her solicitor advised her not to use up her remaining sick leave, but to take unpaid leave for the 11 days and five hours that she was out of work due to the accident. The complainant also said that she wanted to save the remaining three days for a medical procedure that she was due to have in August 2019.

As a result of her accident, the complainant only worked for 11 days and two hours in July 2019.   She said that she expected to receive about half her salary, as she had worked just 2.5 hours less than half the month. As her gross monthly pay is €3,719, she expected a deduction of around €1,900.  

However, the actual deduction was €2,056.54. This includes a deduction of €53.85 from a monthly lunch allowance of €100. Taking account of the slight difference between the hours worked and the hours of unpaid leave, the complainant claims that she received €117.54 less than she expected in her July wages.

The complainant has based this argument on the fact that her contract provides that she is paid monthly and her wages should be calculated in accordance with the number of working days in each month.

Summary of Respondent’s Case:

The complainant submitted a copy of her correspondence with her employer’s Human Resources (HR) Department in which she questioned the method of calculation of her unpaid leave. She received the following explanation:
“As you mentioned you took a total of 11 days and 5 hours’ personal leave in July which equals 11.667 days. Basic salary: (3719 x 12) / 260 x 11.667 = €2,002.64. Lunch allowance: (100 x 12) / 260 x 11.667 = €53.85.”

The complainant raised a further query about how her unpaid leave was calculated and she received the following reply:
“Please understand that the number of working days in each month can be different. However, it is HRS responsibility to ensure that we apply the same rule / practice consistently to all (The Respondent) employees. Therefore, we deduct the days / hours / minutes that you are absent on a pro-rata basis, instead of paying by the number of days that you work.   This payroll deduction calculation has been implemented to all the employees in (The Respondent) for years.   If you have any further queries, please do not hesitate to contact us.”

The complainant said that she sent a further email on September 20th, asking for a more detailed explanation about how the deduction was calculated and when she got no reply, on September 26th, she submitted this complaint to the WRC.

Findings and Conclusions:

The Relevant Law
Section 5(6) of the Payment of Wages Act 1991 addresses the issue of wages that are properly payable:

Where –

(a) the total amount of any wages that are paid on any occasion by an employer to an employee is less than the total amount of wages that is properly payable by him to the employee on that occasion (after making any deductions therefore that fall to be made and are in accordance with this Act), or

(b) none of the wages that are properly payable to an employee by an employer on any occasion (after making any deductions as aforesaid) are paid to the employee, 

then, except insofar as the deficiency or non-payment is attributable to an error of computation, the amount of the deficiency or non-payment shall be treated as a deduction made by the employer from the wages of the employee on that occasion.

From this complainant’s perspective, she argues that an illegal deduction was made from her wages in July 2019, when her employer deducted €2,002.64, rather than the amount she expected to be deducted of around €1,900.

Method of Calculation 1: 260 Days Per Year Method

This complaint arises from the respondent’s payroll policy which calculates wages based on what is known as the “260 days per year method.” The effect of this is to give equal value to every working day and every month of the year, regardless of the number of working days in any month.   To get a daily rate for the complainant, the respondent took her monthly pay and multiplied it by 12, then divided that sum by 260 as follows:

Monthly pay: €3,719 x 12 months = €44,628
Annual pay: €44,628 ÷ 260 working days = €171.64
Daily rate: €171.64 x 11.667 days of unpaid leave = €2,002.64

Based on this approach, the complainant’s wages in July was reduced by €2,002.64 to account for her absence of 11.667 days.

Method of Calculation 2: Calendar Month Method

The alternative is to use the calendar month method, which calculates the value of a working day based on the number of days in a month. In respect of the complainant’s absence in July 2019, this method would have had the following effect:

Monthly pay: €3,719 ÷ 23 working days = €161.69
Daily rate in July:   €161.69 x 11.667 days of unpaid leave = €1,886.50

If the respondent had used this approach, the complainant’s wages in July would have been reduced by €1,886.50, or €116 less than the amount deducted under the first method above.

Findings

My understanding is that the 260 days per year method is the most widely used method for calculating the wages of employees who, like the complainant, are paid an annual salary and work five days every week, or 260 days per year, including holidays and public holidays. It ensures a consistent approach to every month of the year in which an employee is paid less than a full month’s wages, due to starting or finishing work in the middle of a month, or because of absence for part of the month. The same value is given to every working day, regardless of the number of working days in a month.

When an employee is not at work for a full month, the use of the alternative calendar month method results in a variation in wages, depending on the number of working days in a month. For example, if the complainant had been absent in June 2019, when there were just 19 working days and, if the respondent had used the calendar month method, the following calculation would have applied:

Monthly pay: €3,719 ÷ 19 working days = €195.74
Daily rate in June:   €195.75 x 11.667 days of unpaid leave = €2,283.66

The 260 day method remains consistent for the month of June and July (and every month of the year) at €2,002.60, which was deducted from the complainant’s wages in July 2019.

The complainant’s payslip for July 2019 shows that, due to the calculation of tax, PRSI and USC, her net pay in July 2019 was €1,653.42 net, which is €297.77 more than half her normal net pay. 

For an employee who remains working with an employer for a reasonable length of time, the application of the 260 day method is fair and consistent, as it does not result in penalisation when an employee is absent in a month that has fewer working days.   In the long run, the 260 day method results in a more consistent approach that balances out across the year.

Conclusion

Having considered this matter and having listened to the evidence of the complainant at the hearing, it is my view that she did not suffer an illegal deduction from her wages in July 2019. I have reached this conclusion because the respondent’s method of calculating wages is based on the 260 day method which ascribes a consistent value to a day’s pay, regardless of the number of working days in a month. While the application of the alternative calendar month method may have been more beneficial to the complainant in July 2019, this would not have been the case in other months, where there were fewer working days.

It is regrettable that the company’s handbook does not set out clearly the method of calculating the deduction of wages when an employee is absent on unpaid leave for part of a month. A clear explanation of the policy could have avoided the need for this inquiry.

Decision:

Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint in accordance with the relevant redress provisions under Schedule 6 of that Act.

​As I have concluded that the respondent has not infringed section 5 of the Payment of Wages Act 1991, I decide that this complaint is not well founded.

Note on WRC:

The establishment of the Workplace Relations Commission on the 1st October 2015 is the most radical restructuring of employment legislation over the last 30 years. Organisations are encouraged to understand all facets of the WRC, how it now operates and what to expect when required to defend a claim at the third parties.
 
The establishment of the Workplace Relations Commission has resulted in the combined functions of the Labour Relations Commission, Rights Commissioner Service, the Equality Tribunal, the Employment Appeals Tribunal and the National Employment Rights Authority (NERA).
 
In addition to this the Labour Court has been reconfigured in order to hear appeals.

​The strategic aims of the new Workplace Relations Commission include an independent, effective and impartial workplace relations service, a more workable means of redress within a reasonable timeframe and an overall reduction in costs. The new Workplace Relations Commission is also anticipated to be more centralised, in terms of maintaining a database of case information, the end result bring a better service for both Employers and Employees and a much more streamlined, simplified process.

Adare Human Resource Management is one of Ireland’s leading Employment Law and Human Resource Management Consultancies. Our HR & Employment Law Support Services include: 

• Advice on all Employment Law, Industrial Relations and HR queries or issues
• Review, Development and Implementation of Contracts of Employment and Employee Policies and Procedures
• Management and Employee Training - Dignity at Work, Anti-Harassment and Sexual Harassment, Conducting Disciplinary Meetings
• Investigations - independent investigations on behalf of Organisations in line with the relevant legislation and codes of practice
• Organisational Management or Change Management Initiatives – including review / development of Performance Appraisal / Management Systems and Organisational Development

For further information in relation to our services, contact one of our HR & Employment Law Consultants – info@adarehrm.ie / 01 561 3594.

www.adarehrm.ie

CHANGES TO USC FOR EMPLOYEES

Minister for Finance Paschal Donohoe has made a change to a universal social charge (USC) tax band in light of the recent increase to the national minimum wage.

The value of benefit to each individual depends on their income but the maximum benefit is €15.25 a year or 29c per week. Full-time workers on the minimum wage are only charged the 2 per cent rate of USC, which raises the ceiling for that rate to €20,484 from €19,874. 
​
While the amendment will be legislated for later in the year as part of the standard Finance Bill 2020 process, Revenue have agreed that in the interim, the changes will be implemented for the 2020 tax year, according to a statement from the Department of Finance.

WRC POSTPONEMENT PROCESS GUIDELINES

Applications should be made by submitting a request to dedicated email - postponements @workplacerelations.ie. Applicants will be required to submit relevant supporting documentation for the request at that time.

In the event that an application is made within five working days of the date of the hearing letter the application will be granted automatically, provided the written consent of the other party has been obtained and provided to PRU (Post Registration Unit) with the request.

Applications submitted on this basis will be limited to one application per party. Any subsequent application(s) will have to be made through the normal process with relevant supporting documentation.

Applications outside of the five working day period mentioned above will be processed under the current process. On receipt of such an application, PRU will advise the other party of the request, generally by email, setting out, in general, the reason for the request but will not provide the party with the supporting documentation – as this generally contains personal information and is subject to GDPR.

That party will be given two days to furnish comments on the application – by email will suffice. PRU will process the request on receipt of this information. In the event that the party makes no comments on the application within the period indicated, the application will be decided on the basis of the applicant’s material when the period permitted to comment has expired.

In the event that the application is approved both parties will be subsequently notified of the outcome in writing advising that the hearing is postponed. Similarly, both parties will be informed, in writing, if the application is refused and the hearing arrangements will be affirmed.

The current test is “exceptional circumstances and substantial reasons”. This test will be adjusted the closer the application to postpone is to the date of hearing. Requests received within five working days of the Hearings will be assessed against a test of “exceptional and unforeseen circumstances and substantial reasons”.

This initial decision will be subject to review as is the current practice. However, on a pilot basis, the review (in respect of hearings in Dublin) will be conducted by an Adjudication Officer at a postponement review hearing in Lansdowne House. Applicants will have to attend in person to advance the review application. Only cases that have been processed for the review process will be dealt with at the hearing. Parties cannot bring any requests for reviews of other cases.

The WRC will advise the applicant in writing of the date, time and venue for the review hearing and the WRC will notify the other side of the review and they can either attend the Hearing in person or submit written observations.

​It is proposed that these review hearings will take place on a Tuesday morning. The process will be kept under constant review and a full evaluation will be conducted at end October 2020.