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Industrial Tribunals Northern Ireland Decisions
You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> Murray v Fisher Metal Group Ltd (In Adm... [2010] NIIT 01598_08IT (22 February 2010)
URL: http://www.bailii.org/nie/cases/NIIT/2010/01598_08IT.html
Cite as: [2010] NIIT 01598_08IT, [2010] NIIT 1598_8IT
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THE INDUSTRIAL TRIBUNALS
CASE REFS: 1598/08
1604/08
1599/08
CLAIMANTS: 1. John Murray
2. Derrick Murphy
3. John Roger Watt
RESPONDENTS: Fisher Metal Group Ltd (In Administrative Receivership)
DECISION
The decision of the Tribunal is that the Tribunal concludes that the respondents made unlawful deductions from the wages of the claimants and orders the respondents to pay the claimants as follows:
1. John Murray, £1,223
2. Derrick Murphy, £974
3. John Roger Watt, £808
Constitution of Tribunal:
Chairman: Ms Sheils
Members: Mrs Galloway
Mr Jones
Appearances:
The claimant was represented by Mr Neil Gillam from Donnelly Kinder Solicitors.
The respondent entered no response, did not appear and was not represented.
1. The Claim and the Response
The claimants lodged claims on 30 October 2008. They claimed that the respondents had made unlawful deductions from their wages and that the respondents had miscalculated their payments of holiday pay.
No response was received from the respondents.
2. Sources of Evidence
Witnesses
The Tribunal heard evidence from the three claimants.
Documents
The Tribunal received a bundle of documents on the morning of the hearing including the claim form, computations of loss and wage records.
3. Findings of Fact
The Tribunal found the following facts in relation to each of the claimants proved on a balance of probabilities:
Mr John Murray
(1) The claimant commenced employment with the respondents in April 2005 where he was employed as a skilled fabricator. The claimant’s working hours varied between 39 hours and upwards but were more often between 60 and 70 hours per week depending on the job. Some jobs took up to 90 hours per week but these were few and far between. In the main his average working week would be 60 hours.
(2) The claimant did not receive a contract of employment throughout his time working for the respondents. The claimant had been working for the company on a self-employed basis for up to seven years before he commenced working as their employee in April 2005. When he commenced work as an employee it was agreed that he would be paid at the hourly rate he had previously been paid at, £13 per hour. This was the case up until
3 March 2008. At that stage there were rumours in the company about holiday pay. The claimant stated that he and all the other supervisors were called in on 5 March and told to tell all their workers that their hourly rate would be reduced thereafter and the deduction from their hourly rate would go towards pay for holiday pay. The claimant stated that he and others queried the legality of this and were advised by the company that they had every right to do it. The claimant also stated that it was queried that if after working 39 hours in any week would the hourly rate revert to its original higher status and was advised no. The claimant also queried that if the holiday pay were to be based on the amount of overtime worked and again was advised no.
(3) The claimant’s wages were reduced in March 2008 from £13 to £12 per hour. A new contract of employment was presented to the claimant commencing
8 April 2008 specifying the contractual rate of pay was £12. However the claimant never agreed to this and has worked under protest in respect of the contract since.
(4) The claimant stated that his net loss in respect of the deductions made from his wages between March 2008 and the date of the claim in October 2009 was a total of £1,126. The claimant also stated that he had taken a period of two week’s annual leave between 14 July and 4 August 2008. The claimant stated that he was paid holiday pay based on a 39 hour per week rate, and not on a proper basis of his actual earnings. The claimant stated that he sustained a net loss of £97.
Mr Derrick Murphy
(5) This claimant commenced working with Fisher Metal in September 1999 as a site fitter. Between 1999 and February 2008 the claimant was paid at a rate of £10.30 per hour, in March 2008 the claimant’s wages were reduced to £9.51 per hour. Mr Murphy stated that his net loss between March 2008 and the date of his claim in 2009 was £814. The claimant also stated that he was on holiday in June 2008 one week in March and two weeks in July and was paid at the rate based on a 39 hour working week rather than on the basis of his earnings. The claimant stated that he had sustained a net loss of £160 for these holiday periods.
Mr John Roger Watt
(6) This claimant commenced working for Fisher Metal in October 2004 as a sheet metal worker, up until February 2008 the claimant was paid £9.50 per hour. After March 2008 the claimant was paid £8.87 per hour. The claimant stated that the net difference in his wages was £768. The claimant also took two weeks holiday during 2008. During those weeks the claimant was paid on the basis of a 39 hour per week, rather than on the basis of his earnings. The claimant stated that his total net loss in relation to this was £40.
4. The Law
Article 45 of the Employment Rights Order 1996 gives workers the right not to suffer authorised deductions. Article 45 reads:
“(1) An employer shall not make a deduction from wages of a worker employed by him unless -
(a) the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the workers contract, or
(b) the worker has previously signified in writing his agreement or consent to the making of the deduction.”
Article 46 of the same Order goes on to provide for “accepted deductions” and these include:
“(a) an overpayment of wages or an overpayment in respect of expenses or
(b) where the deduction is made by the employer in consequence of any disciplinary proceedings or any exceptions that are not relevant to this case.”
Article 20 of the Employment Rights (Northern Ireland) Order states:
“(1) This Article applies when there are no normal working hours for the employee when employed under the contract of employment in force on the calculation date.
(2) The amount of a week’s pay is the amount of the employee’s average weekly remuneration in the period of 12 weeks ending –
(a) where the calculation date is the last day of a week, with that week, and
(b) otherwise with the last complete week before the calculation date.”
The Tribunal considered the relevant legislative provisions. The Tribunal also read the extract from IDS Employment Law Supplement, entitled Holiday Rights and the case law to which it was referred, namely
Robinson-Steel v RD Retail Services Ltd
Davies & Others (appellants) v MJ Wyatt (Decorators) Ltd (respondents)
Blackburn & Others (appellants) v Great Quest t/a Select (employment) & Others (respondents)
5. Submissions
Mr Gillam submitted that the case of Robinson-Steel v RD Retail Services Limited ECJ made it clear that workers must receive a payment with regard to holiday pay that is additional to payment received for work done. Mr Gillam suggested that the practice used by the respondents in this case could be described as “rolled up holiday pay” where an employer paid a higher rate to the worker for work when it was being done but left the worker responsible for paying for their own holidays. It was this practice, he submitted, which was deemed to be unlawful in the Robinson-Steel case.
Further Mr Gillam submitted that the case of Group Quest Limited (t/a Select Employment) & Other v Blackburn & Others [2002] states that an employer can not unilaterally specify a sum referable to holidays and set that off against the entitlement under the (Working Time) Regulations, that such payment must be contractually agreed between the employer and the employee.
Mr Gillam submitted that the Robinson-Steel case made it clear that “employers who currently use a rolled up holiday pay arrangement but who wish to discontinue the practice must be aware that they risk breaching workers’ contracts if they chose unilaterally to cut the rate of pay.
Mr Gillam submitted that the provisions of Article 45 of the Employment Rights (Northern Ireland) Order applied in this case, that there had been an unlawful deduction from the claimants’ wages when the respondents unilaterally decided to vary the claimants’ contracts and reduce their wages to take account of holiday pay.
Mr Gillam also submitted that the respondents had erred in calculating holidays at the rate of 39 hours per week and referred the Tribunal to Article 20 of the Employment Rights (Northern Ireland) Order. Mr Gillam submitted that this provision applied to the claimants where there were no normal working hours in place and that the amount of weeks pay for the purpose of calculating holiday pay should be the period of 12 weeks depending on the calculation date.
6. The Tribunal’s Conclusions
The Tribunal concluded on the facts found and in the context of the relevant law as stated that the respondents had made unlawful deductions from the claimants’ wages by unilaterally reducing the claimants’ wages in the changes made for the payment of holiday pay.
Further the Tribunal also concluded that the respondents had erred in calculating holidays at the rate of 39 hours per week and that the provisions of Article 20 of the Employment Rights (Northern Ireland) Order applied to the claimants.
Accordingly the Tribunal concluded that Mr Murray was owed £1,223, Mr Murphy was owed £974 and that Mr Watt was owed £808. The Tribunal orders the Respondents to pay to the claimants these sums due.
This is a relevant decision for the purposes of the Industrial Tribunals (Interest) Order (Northern Ireland) 1990.
Chairman:
Date and place of hearing: 20 November 2009, Belfast.
Date decision recorded in register and issued to parties: