County Tipperary Chamber of Commerce (Represented by Peninsula Business Services Ireland Ltd) v David Shanahan (Represented by Thomas O'Donnell BL, Instructed by Cleary & Company Solicitors)

Judgment Date26 October 2022
Judgment citation (vLex)[2022] 10 JIEC 2601
CourtLabour Court (Ireland)
County Tipperary Chamber of Commerce (Represented by Peninsula Business Services Ireland Limited)
David Shanahan (Represented by Thomas O'Donnell BL, Instructed by Cleary & Co Solicitors)



ADJ-00032166 CA-00039671-001



Full Court


Chairman: Ms Connolly

Employer Member: Ms Doyle

Worker Member: Mr Bell


1. Appeal Of Adjudication Officer Decision No(S) ADJ-00032166 CA-00039671-001


2. This is an appeal of an Adjudication Officer's Decision made pursuant to Section 7(1) of the Payment of Wages Act, 1991. The appeal was heard by the Labour Court on 27 September 2022 in accordance with Section 44 of the Workplace Relations Act, 2015. The following is the Court's Determination:


Mr David Shanahan (represented by Thomas O'Donnell BL, instructed by Cleary & Co Solicitors) and County Tipperary Chamber of Commerce (Peninsula Business Services (Ireland) Limited)


This is an appeal by County Tipperary Chamber of Commerce against a Decision of an Adjudication Officer (ADJ-00032166) in relation to a claim by Mr David Shanahan made under the Payment of Wages Act 1991 (“the Act”). The Adjudication Officer found that the complaint was well founded and ordered County Tipperary Chamber of Commerce to pay Mr David Shanahan the sum of €12,854.80.


In this Determination the parties are referred to as they were at first instance. Hence, County Tipperary Chamber of Commerce is referred to as “ the Respondent” and Mr David Shanahan as “ the Complainant”.

Position of the Complainant

The Complainant was employed as the CEO of the Respondent organisation and was in receipt of an annual salary of €35,000. In September 2019 the Complainant was suspended from his employment with full pay pending the completion of an internal investigatory process.


On 20 March 2020, the Complainant was informed by letter that he was to be placed on lay-off from 23rd March 2020 due to the COVID-19 pandemic. The letter stated: “ due to the impact of COVID 19 (the coronavirus) on our business, the company now has to notify you that you are being placed 0n temporary layoff. The period of layoff will take effect from Monday, 25 March”. The Complainant was advised that he may be entitled to the Pandemic Unemployment Payment (PUP) or Jobseekers Benefit.


Enclosed with the letter was an RP9 Form, which notified him that the lay-off was a temporary lay-off as defined under the Redundancy Payments Act, 1967. The complainant objected to being placed on temporary layoff while on paid suspension. His solicitor wrote to the respondent on his behalf citing the measure as inappropriate, premature, and opportunistic, and sought that the status quo remain unchanged until the investigation was completed.


The Complainant submits that the Respondent wrongfully sought to convert ‘ a holding suspension’ to ‘ temporary lay-off’ to capitalise on the COVID-19 pandemic. There is no legal or contractual basis to change an employee's status from being on paid suspension to lay-off.


On the 17 May 2020 the Respondent wrote to the Complainant. That letter was titled “ return to work” and stated “… you can be paid the subsidy scheme and return to work, however you will remain on suspension until the disciplinary process has come to its conclusion for which you will be paid”.


The Complainant submits that he was entitled to full pay pending the outcome of the investigation and the Respondent wrongfully, unlawfully, and in breach of his contract ceased “full pay”, while acknowledging that the Complainant would remain on suspension until the disciplinary process concluded.


The Social Welfare ( COVID-19) ( Amendment) Act 2020, at section 68L(b)(i) sets out that an entitlement to the COVID-19 pandemic unemployment payment applies to those employed contributors who have “ ceased to earn an income from the employment concerns and lost his or her employment as a direct consequence of COVID-19”. The Complainant submits that it is arguable that the Complainant did not technically qualify for the PUP payment as he did not lose his employment as a direct consequence of COVID-19. In this case, the complainant ‘ceased to earn an income’ as the Respondent decided to reclassify the Complainants as being on “temporary lay-off”.


The Complainant seeks payment of his full contractual salary for the period from 23 March 2020 to the date of his termination on 18 th September 2020.


The Complainant relies on A Supervisory Pharmacist v A Pharmacy (ADJ-00026886) where the Adjudication Officer held that a decision to place a complainant on unpaid suspension repudiated the contract of employment and the case of Lake Regional Medical Limited v Mark Reeves (PWD2230) where the Labour Court held that the Emergency Measures in the Public Interest ( COVID-19) Act 2020 did not require or authorise the employer to make a deduction from a worker's wages.

Position of the Respondent

The Respondent rejects the claim that an unlawful deduction was made from the Complainant's wages. The Complainant and his colleagues were laid off due to COVID-19 by letter dated 20 March 2020. It submits that no wages as defined by the Act were properly payable to the Complainant, as no work was undertaken by him, and there was no work for him to do.


Clause 16 of the Complainant's contract of employment states that:

• “ The company reserves the right to lay you off from work or reduce working hours where, through circumstances beyond its control, it is unable to maintain you in full employment. You will receive as much notice as is reasonably possible prior to such layoff or short time. You will not be paid during the layoff period. You will be paid for hours worked during the periods of short time.”


The Respondent submits that it is clear and unambiguous from this clause that the Complainant had no contractual basis to be paid during layoff.


The business, like so many businesses in the country, had no option but to place employees on layoff. The Respondent relies largely on subscriptions, which ceased rapidly with the onset of COVID-19. The Complainant cannot expect to be treated differently or more favourably to other employees who were laid off and had to avail of social protection payments. The Complainant cannot remain on a state of paid suspension protected from layoff.


There is no provision in the Payment of Wages Act to pay employees when on layoff. In order to make a claim under the Act an employee must work, with limited exceptions. The Complainant did not work within the meaning of the terms set out in the Act.


Furthermore, the complainant cannot argue a contractual entitlement to be paid based on his contract of employment, whilst concurrently denying that the pay deductions formed part of the same contract of employment.


The Complainant was issued with a letter on the 17 May 2020 advising him that the respondent had successfully applied for the (Government funded) wage subsidy scheme. It submits that the Complainant availed of the social protection payments to the amount of €350 per week from 21 May 2020 to 24 September 2020. It is submitted that these monies do not meet the definition of wages under the Act, as they were not payable under his contract of employment or otherwise. Accordingly, it is submitted that the complainant has no entitlement to claim the monies in question as those monies are not wages that are properly payable to him under the Act.


The Respondent relies on the Department of Education and Skills v O'Loughlin PWD1725 where the Labour Court referred to the decision of Budd J. in Coen v Employer's Assurance Corporation [1962] I.R. 314 who stated that

• “ …the repudiating party cannot be allowed approbate and reprobate. He cannot thus be allowed to say: ‘I deny the existence of the contract which you say exist between us, but I also relay on a term of that contract”…”.


It also relies on Balans v Tesco Ireland Limited [202] IEHC that the first matter to be addressed by the Court is to determine what wages are properly payable. The Respondent submits that in this case there are none.

The Contract of Employment

The relevant clauses from the Complainant's contract of employment are as follows:


Clause 8 – Remuneration states as follows:

• “ Your basic salary is €35,000 per annum and is subject to statutory and other agreed deductions and will be paid monthly in arrears by electronic transfer into your account. You will be notified in writing of any change to your salary and any notification shall be and remain confidential…”.


Clause 16 – Layoff/Short-time specifies:

• “ The company reserves the right to lay you off from work or reduce working hours where, through circumstances beyond its control, it is unable to maintain...

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