A Dublin college has been ordered to end a “bizarre and unlawful scheme” of deducting employee wages to purportedly fund their annual leave entitlements.
In a written decision, the Workplace Relations Commission awarded a part-time lecturer at Independent College Dublin €10,000 after finding the school’s stated policy of deducting 8 per cent of pay to fund annual leave payments was was unlawful.
The WRC upheld Sharon Roche Morrissey’s complaint under the Organisation of Working Time Act and told Independent College Dublin its practice of deducting 8 per cent of wages to fund annual leave must “cease immediately”.
Evidence was submitted stating that the deduction had applied to “all lecturers”.
“Whether [it] originated in a sleight of hand device to reduce the respondent’s financial commitment to the complainant (or other employees), or simple error, it is a serious breach,” adjudicating officer Pat Brady wrote in a decision published on Wednesday.
Ms Morrissey, who lectures in mediation and conflict resolution, told a hearing last month that her working week varied but that she had been hired in September 2019 to work 12.5 hours a week.
When she was interviewed for the job, she was told that her hourly pay rate would be €80 an hour – but in May 2020 she noted that she was not getting that much, she said.
Payslips submitted in evidence showed she was being paid at a rate of €74.07 per hour.
When Ms Morrissey queried this with the college in May 2020 she was told: “8 per cent of your hourly rate is withheld each month, it accumulates and paid back to you in July and January each calendar year as annual leave pay while there are no classes on.”
“This is the same for all lecturers at Independent College Dublin. Your normal hourly rate is €80 and 8 per cent of this is withheld so your monthly hourly rate works out as 74.07,” the correspondence read. “I am surprised this wasn’t mentioned to you when you first started with us,” it added.
An unidentified Siptu organiser who represented Ms Morrissey at the hearing argued that Independent Colleges Dublin was essentially funding her own leave by way of the deduction from her pay.
“Rolled-up holiday pay/consolidated [pay] has been outlawed since the introduction of the EU directive and is clearly banned,” the organiser argued.
Ms Morrissey sought reimbursement for 8 per cent of the 542.5 hours she had worked since taking up the post at a rate of €80 per hour – a sum her representative calculated at €3,472.
Independent Colleges Dublin argued that the correct rate of pay due to Ms Morrissey was €74.04 per lecturing hour and not €80 “as claimed by her”.
Its position was that her contract clearly showed the applicable rate of pay and this was “clearly itemised and calculated each month” in her payslips.
The college said it had clarified the position to Ms Morrissey and met with her to discuss the grievance she raised.
It also submitted that Ms Morrissey had not raised the question of her pay until May 2021, not May 2020 as she stated in her evidence.
It denied any breach of the Organisation of Working Time Act and insisted Ms Morrissey “received her holiday pay at the correct rate”.
In his decision , the adjudicator Mr Brady wrote that the figure of 8 per cent appeared in “a somewhat unusual context” in the case, saying it “only has relevance” as one of the three permitted methods of calculating the duration of a worker’s annual leave.
He said the case turned on the correct rate of pay – Ms Morrissey saying on affirmation that it was €80, and the employer insisting it was €74.04.
He referred “for the convenience of the reader” to the college’s response in May 2020, which said: “Your normal hourly rate is €80 and 8 per cent of this is withheld so your monthly hourly rate works out as €74.07.”
Mr Brady wrote that the college had offered “no credible explanation for this bizarre notion; the idea that a worker is in some way required to contribute to a form of saving scheme to fund the payment to them of their annual leave”.
“I find, as a matter of fact that is beyond dispute, that the complainant’s contracted rate of pay was €80 per hour,” Mr Brady wrote, having reference to Ms Morrissey’s contract which stated her rate of pay would be communicated to her at interview.
“I therefore find that the respondent operates a bizarre and unlawful scheme of deductions purporting to fund annual leave which it should cease immediately,” he wrote.
“The complainant at no stage agreed to any such arrangement and, on the contrary was told that her rate of pay would be €80.00 per hour,” Mr Brady added.
“The only role played by a figure of 8 per cent is to assist the employer in calculating the amount of paid time off on annual leave to which a worker is entitled, nothing else,” he wrote – adding that the deduction was an “eccentric device” which was “quite wrong”.
He ruled the complaint well-founded and said he regarded the breach as “relatively serious on the spectrum of gravity”.
He ordered Independent Colleges Dublin to pay Ms Morrissey €10,000 and ordered it to cease making such deductions from pay.