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Cite as: [2019] IEHC 693

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[2019] IEHC 693

THE HIGH COURT

IN THE MATTER OF AN APPEAL PURSUANT TO ORDER 84C RULES OF THE SUPERIOR

COURTS:- NATIONAL MINIMUM WAGE ACT 2000-2015 AND SECITON 46 WORKPLACE

RELATIONS ACT 2015.

[2017 No. 93 MCA]

BETWEEN

DIMITRIJ KARPENKO

APPELLANT

AND

FRESHCUT FOOD SERVICES LIMITED

RESPONDENT

JUDGMENT of Mr. Justice MacGrath delivered on the 18th day of October, 2019.

Background

1. This an appeal on a point of law from the determination of the Labour Court dated 9th

February, 2017 (Determination No. NWD171). The appellant, Mr. Karpenko was

employed as a production operative by the respondent from the 15th July, 2013 to the

28th February, 2014. The appeal concerns the proper interpretation and application of s.

8 of the National Minimum Wage Act, 2000 as amended (hereafter referred to as “the

Act”) which provides as follows:-

“(1) For the purpose of determining under this Act whether an employee is being paid

not less than the minimum hourly rate of pay to which he or she is entitled in

accordance with this Act, but subject to section 9, “working hours”, in relation to an

employee in a pay reference period, means—

(a) the hours (including a part of an hour) of work of the employee as

determined in accordance with—

(i) his or her contract of employment,

(ii) any collective agreement that relates to the employee,

(iii) any Registered Employment Agreement that relates to the employee,

(iv) any Employment Regulation Order that relates to the employee,

(v) any statement provided by the employee's employer to the employee

in accordance with section 3 (1) of the Terms of Employment

(Information) Act, 1994,

(vi) any notification by the employee's employer to the employee under

section 17 of the Organisation of Working Time Act, 1997,

(vii) section 18 of the Organisation of Working Time Act, 1997, or

(viii) any other agreement made between the employee and his or her

employer or their representatives that includes a provision in relation

to hours of work,

(b) the total hours during which the employee carries out or performs the

activities of his or her work at the employee's place of employment or is

required by his or her employer to be available for work there and is paid as

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if the employee is carrying out or performing the activities of his or her work,

whichever, in any case, is the greater number of hours of work.”

2. Mr. Karpenko in his complaint to the Workplace Relations Commission alleged that in

accordance with his contract of employment his working hours were 9pm to 9am, Monday

to Sunday, with shifts rostered six days per week. Therefore, he claimed that his

contracted working hours, taking breaks into account, amounted to 66 hours per working

week. He was paid, on average, €337.50 per week which he alleges is a rate of pay lower

than the minimum required by the Act and that the respondent was in breach of the

provisions of the Act and regulations made thereunder. The Rights Commissioner decided

that Mr. Karpenko’s claim was not well founded. He noted that Mr. Karpenko’s records

demonstrated that he was remunerated at the rate of €10 per hour for each hour that he

worked, which was not in breach of the terms of the Act. This decision was appealed to

the Labour Court.

3. The Labour Court described the statement of contractual terms as being quite

extraordinary and observed, without expressing a conclusion, that it may not be in

accordance with other legislative provisions. Nevertheless, it also noted that Mr. Karpenko

was paid in excess of the national minimum wage for the hours that he actually worked or

was required to work during the relevant pay reference period. The Labour Court referred

to one of its previous determinations in O’Leary International Limited v. Viktors Gurkovs

(MWA 12/24) where it was stated “[The] Act was enacted to establish a national minimum

rate of pay which is expressed in terms of a rate applicable to every hour worked ”.

Describing this as the nub of the appeal, it concluded:-

“The determination of this court in O’Leary International is not authority for the

claim being advanced on behalf of the complainant i.e. that he is entitled to be

remunerated for hours he did not and was not required to work. It is authority for

the proposition advanced on behalf of the respondent in the within appeal to the

effect that the Act provides that the complainant is entitled to be remunerated at

the applicable national minimum wage for the hours he actually worked” (emphasis

added).

4. By notice of motion dated 8th March, 2017 Mr. Karpenko appeals that decision.

5. The relevant provisions of his contract of employment, entitled Statement of Main Terms

of Contract, dated 15th July, 2013 are as follows:-

PLACE OF WORK. “

You will normally be required to work at 68 Moyle Road, Dublin Industrial Estate,

Glasnevin, Dublin 11. You will not be required to work outside the State.

HOURS OF WORK.

Your normal hours of work are between 9.00pm and 9.00am Monday to Sunday.

Shifts are six days a week as per roster with a 30 minute break and two 15 minute

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breaks each day. You may be required to work additional hours when authorised

and as necessitated by the needs of the business.

REMUNERATION.

Your hourly rate is currently €10 per hour payable weekly by cheque or credit

transfer as detailed on your pay statement.”

6. In its determination the Labour Court records that it was informed by representatives of

the employer that Mr. Karpenko did not work in excess of 40 hours in any one week

during the relevant period of his employment and that this was not contested by the

appellant. By letter dated 9th April, 2014, Mr. Karpenko, through his solicitor, made a

request pursuant to s. 23 of the Act for a statement of his average hourly rate of pay for

the pay reference period 17th February, 2014 to the 21st February, 2014. The

respondent replied by letter dated 10th June, 2014 stating that his average hourly rate of

pay for the pay reference period was €10 per hour. Mr. Karpenko was recorded as having

worked 33.47 hours in that period and was paid €337.50 gross. The national minimum

wage at the relevant time was €8.65 per hour.

7. It is to be noted that Mr. Karpenko made other complaints in respect of his employment

with the respondent to the Rights Commissioner. In 2014, he made complaints under the

Organisation of Working Time Act 1997 (“the Act of 1997”) and the Terms of Employment

(Information) Act 1994 – 2001 (“the Terms of Employment Act”). In his determination of

the 9th September, 2014, the Rights Commissioner found that the complaint made by Mr.

Karpenko that he had not received a statement of employment in compliance with s. 3 of

Terms of Employment Act, was well founded. Mr. Karpenko had complained that his

contract of employment was deficient in that his employers name was not listed correctly,

the holiday year was not stated according to the Act of 1997 and that there was no

reference to the right to request a statement of the hourly rate of pay as per the National

Minimum Wage Act. He also complained that no reference was made to relevant

provisions of S.I. 49/1998. He sought compensation. The employer did not attend the

hearing and based on uncontested evidence, the Rights Commissioner found that the

contract did not fully comply with the requirements of s. 3 of the Act. He ordered the

employer to pay €500 compensation within six weeks.

8. Mr. Karpenko also made a complaint pursuant to the provisions of s. 15 and s. 16 of the

Act of 1997. He contended that he worked from 9:30 p.m. to 7:00 a.m. and that he was a

night worker as more than 50% of his hours were worked between midnight and 7:00

a.m. It was also claimed that he worked 40 hours per week in August, 2013, 46.3 hours

per week in September, 2013 and 41.35 in October, 2013 and 39.37 in November, 2013.

This would seem to be somewhat at odds with what is recorded in the Labour Court’s

determination the subject matter of this appeal. Again, the employer did not attend and

based on the uncontested evidence, in his decision of 9th September, 2014 the Rights

Commissioner found that Mr. Karpenko was a night worker within the meaning of s. 16,

that he had exceeded 40 hours per week on certain occasions, and that the employer had

been in breach of s. 16. Compensation was measured at €500. The complaint under s. 17

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of the Act of 1997 was not accepted. Mr. Karpenko maintained that he was notified of

overtime with less than 24 hours’ notice. The Rights Commissioner noted that this was a

regular occurrence and that Mr. Karpenko was informed 15 to 20 minutes beforehand of

the position. Observing that Mr. Karpenko’s contract of employment “states finishing time

at 9:00 a.m. but he finished at 7 or later, but less than 9 a.m.”, he continued:-

“I note that the contract of employment states under ‘Hours of work’ ‘Your normal

hours of work are between 9 p.m. and 9 a.m.’. I find that this is not a contract to

work those actual hours but that the hours are between these times. Therefore, I

find that he does not have a contract to work twelve hours per shift but that his

hours of work fall within these times. As his hours fall between 9 p.m. and 9 a.m.,

he was effectively notified of having to work within that period of time. Therefore, I

find the employer has not breached sec 17 of this Act”. (emphasis supplied)

Submissions

9. Counsel for the appellant, Ms. Bolger S.C., submits that the Labour Court fell into error as

a matter of law in the manner in which it addressed and calculated hours of work in the

relevant pay reference period. Counsel submits that this case is not about interpretation

of the contract, rather interpretation of the Act. It is submitted that, as a matter of

statutory interpretation, it is not the actual hours worked, rather the hours of work as

determined in accordance with the contract of employment which is relevant and that the

Labour Court supplanted the law contained in s. 8(1) with its own analysis of the stated

purpose of the Act, being to establish a national minimum rate of pay expressed in terms

of rates applicable to every hour worked. It is submitted that the provisions of the Act are

unambiguous and ought to be literally interpreted and afforded their ordinary meaning.

There is no ambiguity and no justification to adopt a purposive approach thereby

ascribing some other meaning to those words. The disjunctive “or” which is employed in

the section ought to have led to a consideration of the alternatives. Similarly, the

expression “whichever is the greater” was also not considered. The Act employs the

phrase “working hours” rather than “every hour worked”. Section 2(1)(b) provides that

the term “working hours” has the meaning assigned to it by s. 8. The phrase working

hours is repeated throughout the Act, and not phrases such as “every hour worked” or

hours “actually worked”. Further, the Act makes no allowance for a contention, such as

made by the respondent, that it is unreasonable for an employer to have to pay for hours

not worked. It is further submitted that any attempt to rely on the provisions of s. 17, by

arguing that a roster constitutes notification of working hours, should not be entertained

because such argument was not made to the Labour Court. Reliance is placed in this

regard a letter of 10th June, 2014 from the respondent, which records that the

contractual “start and finishing” times were as stated in the contract of employment

(emphasis added). It is submitted that it would be unfair to entertain arguments in

respect of rosters or s. 17 in this court as the appellant did not have the opportunity

before the Labour Court to test whether the rosters, or evidence thereof, complied with

the provisions of s. 17 in the assessment of relevant matters under s. 8(1)(a) of the Act.

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10. Counsel for the respondent, Mr. Shearer B.L. submits that the appellant relies on an

incorrect, restrictive and selective interpretation of the relevant term of the contract that

his contract of employment required him to be available for work for 12 hours a day, six

days per week. He accepts that the wording of the contract might benefit from

rephrasing, but it is submitted that the appellant ignores the phrase “as per roster” which

qualifies the meaning and effect of the contractual term. Each word in the contract must

be presumed to have some meaning and counsel argues that the appellant’s contract of

employment must be read, was intended to be read and was in fact read by the appellant

in conjunction with his weekly roster. Further the wording employed in the contract is

“between...” and not “from…. 9 p.m. to 9 a.m.” and provides for rostering on a maximum

of 6 shifts per week with those shifts occurring between 9 p.m. and 9 a.m. He submits

that the interpretation of the contractual provision proposed by the appellant would

necessarily render the respondent in breach of the Act of 1997. The contract should be

construed in a lawful way and in support counsel places reliance on dicta of Kay L.J. in

Mills v. Dunham [1891] 1 Ch 576, that “it is … a settled canon of construction that where

a clause is ambiguous a construction which would make it valid is to be preferred to one

which would make it void”. He argues that an exercise demanded by s. 8(1)(a) of the Act

is to assess all matters referred to, including notifications under s. 17, in this case being

the roster. Counsel also refers to a letter from a fellow employee which was before the

Labour Court. The letter confirms that she worked in the fruit kitchen of the respondent’s

premises between March, 2013 and November, 2015 and received advanced notification

of her working hours; a roster was placed on the kitchen notice board informing her and

all employees of the working hours for the following two weeks

11. Mr. Shearer B.L. also contends that res judicata applies, or at minimum the appellant is

estopped from pursuing this case because in his 2014 recommendation, the Rights

Commissioner accepted that Mr. Karpenko was paid €10 per hour. It is therefore

submitted that because compensation and redress under both pieces of legislation are

calculable by reference to the amount paid per week and that the assessment of

compensation of €500 must have been calculated by reference to the sum of €10 per

hour, that Mr. Karpenko should not be permitted to make a contrary case now.

12. Ms. Bolger S.C. in reply submits that this is not a breach of contract claim, that the

contract was drawn up by the respondent and was placed before the Labour Court. It is

contended that the Rights Commissioner’s determination in 2014 could not be binding on

this Court, that there was never a determination of the issue of how wages should be

calculated under s. 8 of the Act and res judicata could not apply in the context of a

different piece of protective legislation. More fundamentally it is argued that it has never

been the appellant’s case other than that he was paid €10 for the hours which he in fact

worked and therefore estoppel cannot arise. Counsel submits that the evidence before the

Labour Court of another employee about rosters is not evidence of the notification of a

roster to the appellant; and is not in accordance with a letter in reply to particulars in

which the company identified the contract as containing the times of work. It is

submitted that there is no evidence of the appellant being informed of the hours of work,

other than that outlined in the contract and that in any event this case was never made

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before the Labour Court. As to the merits, it is submitted that it is not relevant to

consider that the Labour Court might arrive at the same conclusion after the proper

interpretation and application of the requirements of the Act. The appellant is entitled to

have his working hours determined and calculated in accordance with the statutory

requirement.

The role of the Court – appeal on point of law and curial deference

13. This is an appeal on a point of law pursuant to s. 46 of the Workplace Relations Act 2015.

In Fitzgibbon v. Law Society [2015] 1 I.R. 156, Clarke J. (as he then was) stated that

where the legislature confirms a right to a statutory appeal, it must be assumed that it

was intended to have some meaning and purpose. In An Post v. Monaghan [2013] IEHC

404, Hedigan J. observed that the role of the court is limited, and it may intervene only

where it finds that the decision is based on an identifiable error of law or an unsustainable

finding of fact. The authorities highlight that such decisions are made by expert

administrative tribunals and when it comes to the question of fact, a practical reason for

the reluctance to interfere is that this Court has not heard the evidence which the tribunal

had the benefit of hearing. In Dunnes Stores v. Doyle [2014] 25 E.L.R. 184, Birmingham

J. considered that a finding of fact by an Employment Appeals Tribunal is deserving of

great respect because it is made by a Tribunal representing both sides of industry. In

Health Services Executive v. Abdel Raouf Sallam [2014] IEHC 298, Baker J. observed that

the High Court must show appropriate curial deference to the Labour Court, but that such

deference arises when the Labour Court deploys its particular expertise on industrial

relations issues.

14. Thus, it is clear that the role of this court on this appeal is limited. It may only intervene

where an error of law has been demonstrated or where a finding of fact has been made

which is unsupported by the evidence. The authorities also acknowledge that the process

by which findings of fact are made may be a question of law.

Decision

15. Among the purposes described in the long title to the Act are to provide for the

determination, declaration and review of a national minimum hourly rate of pay for

employees, and the entitlement of employees to remuneration for employment at a rate

not less than, or calculated by reference to, that national minimum hourly rate. The Act

provides a mechanism for the calculation of employees’ entitlements.

16. In arriving at its determination the Labour Court referred to the provisions of ss.

8(1)(a)(i) and 8(1)(b) and found as a matter of fact that the complainant was paid in

excess of the national minimum wage for the hours that he actually worked/was required

to work during the relevant pay reference period. In its determination the Labour Court

concluded that O’Leary was authority for the proposition advanced on behalf of the

respondent that the Act provides that the complainant is entitled to be remunerated at

the applicable national minimum wage “for the hours he actually worked”.

17. I accept that the provisions of the Act under consideration are unambiguous and therefore

it is appropriate to construe them in accordance with a literal interpretation. In my view s.

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8(1) requires the meaning of working hours under the contract to be addressed and

assessed. It has a particular statutory definition. In the context of this case, it requires

that the hours (including a part of an hour) of work of the appellant be determined in

accordance with the contract of employment, or the total hours during which he carried

out or performed the activities of his work at his place of employment, or was required by

his employer to be available for work, whichever is the greater number of hours of work.

The assessment of the alternative is mandated by s. 8 of the Act which notably contains

no reference to the expression hours worked.

18. In my view, the Labour Court in its approach to the determination of this issue erred by

equating hours actually worked with working hours as defined in the Act. By so doing it

did not engage in the necessary exercise of the assessment of whichever is the greater

between the hours of work as determined in accordance with the contract of employment

and the total hours during which Mr. Karpenko carried out or performed the activities of

his work at his place of employment or was required by his employer to be available for

work and was paid as if he was carrying out or performing the activities of his work.

19. It is only in the analysis of these two issues, in the context of the facts as found, could

the Labour Court have arrived at a conclusion as to which was the greater number of

hours of work. On that basis I must conclude that the Labour Court fell into error of a

type envisaged by Kearns P. in Earagail Eisc Teoranta v. Ann Marie Doherty and Others

[2015] IEHC 347, where it is appropriate for the court to intervene.

20. Counsel for the respondent argues that res judicata or, alternatively, estoppel applies

even though neither defence was raised before the Labour Court. With regard to res

judicata no authority is relied on in support of this contention in a case such as this,

particularly given the differing nature of the statutory provisions and processes in

question. While the Rights Commissioner in his decision of 9th September, 2014

concluded that there had not been a breach of the provisions of s. 17 of the Act of 1997,

the claim concerned an issue relating to notification of overtime and not the assessment

of hours of work or working hours. Regarding estoppel, it appears to me that the Rights

Commissioner was concerned with the provisions of different legislation. It is also clear

that the hourly rate payable under the contract of employment is expressly stated to be

€10 per hour and no contrary case is made in that regard. What is in issue in this case is

the number of hours of work and working hours as defined in s. 8.

21. I should also say, I believe that there is merit in Mr. Shearer’s submission that on a

proper interpretation of the terms of the contract of employment, it is unlikely to mean

that the employee’s work extends to 66 hours a week. To so construe it would appear to

ignore the words in the contract that “shifts are six days a week per roster”. The roster is

also mentioned in the contract in the context of holiday pay. It is evident from the

contract of employment that the hours of work are not stated to be from but between 9

p.m. and 9 a.m. Therefore, the roster is likely to assume importance in the determination

of what constitutes the hours of work under the terms of the contract. In the assessment

of the appropriate “working hours” under s. 8. the provisions of s. 17 of the Act of 1997

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are also likely to be relevant but it cannot be said that the Labour Court engaged in an

analysis of whether and to what extent a roster existed and the effect, if any, that this

may have had in terms of the application of s. 17.

22. I must conclude, therefore, that the Labour Court did not engage in the exercise that it

was required to when determining the “working hours” of the appellant as defined in s. 8

of the Act and that in failing to do so it fell into error as a matter of law. It may well be

that the Labour Court arrives at the same result having engaged in such exercise and to

that extent the appeal may have little substantive merit. Nevertheless, the Act is an

important piece of protective legislation and the proper interpretation and application of s.

8 is of general relevance and importance.

23. For all of the above reasons, I must accede to the application and direct that the matter

be remitted to the Labour Court for further determination.

Result: Application Allowed