Since its introduction in May 2012 the Protection of Employees (Temporary Agency Work Act) 2012 has set out very clearly what entitlements agency workers have in respect of pay and access to benefits in a Company and provides that agency workers should be afforded equal treatment as if they had been employed by the end-user from the first day at work. Being a relatively new piece of legislation there have been few claims taken under this heading, however we are starting to see some coming through the system.
The Labour Court have just issued a determination (AWD 131) in respect of a complaint on behalf of a midwife who claimed she was entitled to have a specialist qualification allowance treated as part of her basic pay. The case is worth noting as it bring up the question of what constitutes "pay" under the Act.
Background
In this case, the Labour Court had to decide if a midwifery allowance, which the claimant says she was entitled to, comes within the definition of "pay" under the Act. The Agency in this case argued that the definition of "pay" as set out in Section 2 of the Act is exhaustive. Pay under the Act means (a) basic pay and (b) any pay in excess of basic pay in respect of:
- Shift Work
- Piece Work
- Overtime
- Unsocial hours worked
- Hours worked on a Sunday
The payment of the allowance did not fall within the definition of any pay in excess of basic pay, and so the question then became whether or not the allowance forms part of "basic pay".
"The net issue for the Court to decide is whether the allowance in issue comes within the definition of pay in the Act. If it comes within the definition of Pay the Complainant is entitled to be paid the Allowance. If it does not then she had no entitlement to payment of the Allowance"
Basic Pay
The Labour Court noted that basic pay is not defined under the Act.
"The Act does not define basic pay. The Complainant contends that the specialist allowance is paid in respect of a qualification without which she cannot practice as a midwife. She contends that, until very recently, there was no other route by which one could qualify to work as a midwife in this state other than by first qualifying as a nurse and thereafter undertaking a further course of study to qualify to work as a midwife. She submits that the allowance is not paid for simply achieving the qualification. One must also work as a midwife in a maternity unit in order to qualify for payment of the allowance. On this basis she submits that the allowance cannot be considered other than as part of her basic pay."
The Court went on to state that in determining whether a payment forms part of basic pay it would normally have regard to the manner in which the parties themselves regarded it. Upon investigation the Court noted that the allowance continues to be paid on sick leave and maternity leave, and the Court noted that an allowance in the nature of pay is normally understood to be one on which pension contributions are payable.
Determination
"On this basis the Court concludes that what constitutes Basic Pay can be ascertained from the manner in which the parties have treated the various elements contended for by either side. In this case the parties themselves treated the Specialist Qualification Allowance as a constituent element of basic pay. Accordingly the Court determines that the Specialist Qualification Allowance in this case is an integral part of basic pay to which the Complainant has an entitlement under the provisions of Section 6 of the Act where her employment commenced before the 1st February 2012. A midwife, regardless of his or her route to qualification employed directly by the HSE after that date would not receive the Maternity Allowance. Accordingly it ceased to be a part of the basic pay of a midwife newly employed by the HSE through an employment agency would have no entitlement to the allowance under the Act. "
On foot of this, the Court upheld the claimant's claim and found that the allowance was "an integral part of basic pay to which the claimant had an entitlement under the Act".
Impact for Employers
As noted this legislation is relatively new and we are only just seeing cases coming through. Employers should be very careful when it comes to entitlements for agency workers and refer to the definitions of pay in the Act. if it does not fall under any of the exhaustive examples listed then they should look at how the payments/benefits are treated by both parties and assess whether or not it is part of basic pay.
More decisions are sure to come through in the coming months but for now employers should just note the points mentioned above.
