In organisations where an employer recognises a Union for negotiation purposes, a Company will engage with Unions on issues affecting their employees and their employment. Issues such as Redundancies, Terms and Conditions and Company cost saving measures will see an employer sit with Union representatives who are negotiating on behalf of the workforce.
In a recent case (PW14/2011) from the EAT, 23 claimants had taken a Payment of Wages Claim against an employer over an unlawful deduction of monies. Under Section 5 of the Payment of Wages Act an employee may claim that a deduction was unlawful if they had not given express permission for this to take place.
This case was appealed to the EAT following a Rights Commissioner decision. The case concerned a company who received funding solely from the HSE, and had their funding cut and needed to reduce costs in order to maintain employment. A number of redundancies did take place but with agreement from Unions cost saving measures were implemented in 2008. In 2009 further cost saving measures were sought following a decision by the HSE to further reduce funding, and the Company asked employees (unionised and non unionised) to accept a pay decrease of 20% for the remainder of 2009.
The employer met with employees in a number of locations to explain this and a ballot of trade union members accepted this position. The Tribunal in this case found that there was express consent given to the employer by the union and this was in keeping with Section 5 of the Payment of Wages Act. The Tribunal further determined that this consent had been given on behalf of all employees regardless of trade union membership.
In the employers handbook the unions of SIPTU & INMO were given explicit bargaining rights and the employer would negotiate with the unions on such matters. The Tribunal found that as the union was formally recognised by the employer they could act on behalf of all members and so any agreement given to a cut in wages would be seen as being applicable to all the workforce and not just the unionised section.
Employer Advice
Employers should also note that this case may not provide a clear precedent as another tribunal could find that the employer was in fact guilty of an unlawful deduction as the employees had not explicitly given their permission to allow such a deduction. The Rights Commissioner in this instance found that the employer had made an unlawful deduction and so awarded in favour of the employees, which was then overturned by the EAT as above.
Employers should ensure that clear consultation is made with all employees to avoid such a claim and where an employee agrees to a deduction or a decrease then it is captured in writing so that they can show express permission was given in line with the Payment of Wages requirements.
