Da Silva, Miranda and Da Silva v Rosas Construtores S.A.
| Jurisdiction | Ireland |
| Judge | Mr. Justice Gerard Hogan |
| Judgment Date | 04 October 2017 |
| Neutral Citation | [2017] IECA 252 |
| Date | 04 October 2017 |
| Court | Court of Appeal (Ireland) |
| Docket Number | Neutral Citation Number: [2017] IECA 252 RECORD NO. 2016/271 RECORD NO. 2016/273 RECORD NO. 2016/272 |
[2017] IECA 252
THE COURT OF APPEAL
Hogan J.
Irvine J.
Hogan J.
Whelan J.
Neutral Citation Number: [2017] IECA 252
RECORD NO. 2016/271
RECORD NO. 2016/273
RECORD NO. 2016/272
Damages – Breach of contract – Interest – Appellants seeking to appeal against judgments and orders of the High Court – Whether the appellants could make deductions for accommodation services provided to the respondents
Facts: In three linked sets of proceedings the plaintiffs/respondents sought damages from the defendant/appellant employers for a variety of alleged breaches of their contracts of employment by reason of what was contended were wrongful deductions from their salaries and wages. The 27 plaintiffs were Portuguese and, with one exception, they were all construction workers who worked on the construction of the N7 motorway between Nenagh and Limerick between 2007 and 2009. The fourth plaintiff in the second set of proceedings, Sra Gastalho, was married to another plaintiff and was employed by the defendants as a cleaner. On 18th March 2016, the High Court (Keane J) found for the plaintiffs, holding that the deductions made by the defendant employers from the plaintiff’s wages in respect of the provision of accommodation and laundry services were unlawful and in breach of contract. Keane J awarded each of the plaintiffs sums ranging from €26,928 in the case of the ninth plaintiff, Sr Magalhaes to €53,346 in the case of the second plaintiff, Sr Coelhoe. The total sums awarded came to €364,290. Keane J further exercised his discretion pursuant to s. 22 of the Courts Act 1981 and awarded the plaintiffs’ Courts Act interest on those sums from the date of the commencement of the proceedings on 24th September 2012 to the date of judgment, namely, 18th March 2016. At the time the prevailing interest rate under the Courts Act was 8%, having been so fixed by the Courts Act 1981 (Interest on Judgment Debts) Order (S.I. 12 of 1989). The defendants appealed to the Court of Appeal against the judgments and orders of the High Court.
Held by Hogan J that he would allow the appeal only insofar as the High Court judge held that the defendants could not make deductions for accommodation services provided to the plaintiffs. Hogan J tempered that finding by directing a re-trial on the question of the damages to be awarded to the plaintiffs for inconvenience, distress and general loss of enjoyment by reason of the provision of sub-standard accommodation to the employee plaintiffs in breach of their respective contracts of employment.
Hogan J held that, save that the ultimate quantification of the final awards to each plaintiff must await the outcome of the re-trial, he would otherwise dismiss the defendants’ appeal in relation to both the deductions for laundry services and the issue of the Courts Act interest.
Appeal allowed.
Judicial and legislative concerns regarding deductions made by employers of the salaries and wages of their employees in respect of goods and services provided by that employer have been a feature of the legal system since the 18th century and perhaps even earlier. Thus, for example, the Truck Acts of 1831 and 1887 sought to outlaw the practice of employers paying employees by means of tokens which were only exchangeable at a company store, often at inflated prices. Indeed, it was judicial and legislative distaste for this system of truck which historically prompted moves towards the concept of legal tender.
The issues presented in this appeal all have a distinctly Victorian feel to them and, indeed, the factual sub-stratum of the case – allegations of illegal deductions made by the employers of foreign and generally poorly educated construction workers – would have seemed familiar to late 19th century judges in different jurisdictions.
These are three linked sets of proceedings in which the plaintiffs seeking damages from the defendant employers for a variety of alleged breaches of their contracts of employment by reason of what was contended were wrongful deductions from their salaries and wages. The 27 plaintiffs are Portuguese and, with one exception, they are all construction workers who worked on the construction of the N7 motorway between Nenagh and Limerick between 2007 to 2009. The fourth plaintiff in the second set of proceedings, Sra. Maria Piedosa Ribeiro Cardosa Gastalho, is married to another plaintiff and was employed by the defendants as a cleaner.
In a comprehensive judgment delivered on 18th March 2016 in the High Court Keane J. found for the plaintiffs, holding ( inter alia) that the deductions made by the defendant employers from the plaintiff's wages in respect of the provision of accommodation and laundry services were unlawful and in breach of contract. (The judge, however, rejected similar claims in respect of the food provided at a canteen service and this latter issue is not the subject of any appeal.)
Keane J. awarded each of the plaintiffs' sums ranging from €26,928 in the case of the ninth plaintiff, Sr. Magalhaes to €53,346 in the case of the second plaintiff, Sr. Coelhoe: see da Silva v. Rosas Construtores S.A. [2016] IEHC 152. The total sums awarded came to €364,290.
Keane J. further exercised his discretion pursuant to s. 22 of the Courts Act 1981 (‘the 1981 Act’) and awarded the plaintiffs' Courts Act interest on these sums from the date of the commencement of the proceedings on 24th September 2012 to the date of judgment, namely, 18th March 2016. At the time the prevailing interest rate under the Courts Act was 8%, having been so fixed by the Courts Act 1981 (Interest on Judgment Debts) Order ( S.I. 12 of 1989) (‘the 1989 Order’). As it happens, that interest rate has subsequently been reduced to 2% by virtue of the Courts Act 1981 (Interest on Judgment Debts) Order 2016 ( S.I. No. 624 of 2016), the new interest rate having come into effect on 1st January 2017.
As we shall presently see, one of the arguments advanced by the defendants is that the High Court could not properly have exercised its discretion in this fashion, since the effect of the 8% interest rate went beyond the proper compensation of the plaintiffs for being at a loss of these monies, but that the order effectively enabled the plaintiffs to make a profit in view of prevailing interest rates. I propose to return to this issue at a latter point of the judgment, but it is first necessary to take up the narrative of the background to the case.
The defendants are three Portuguese companies that traded in Ireland as a partnership (‘RAC Éire’), having its registered office at Mill House, Henry Street, Limerick. RAC Éire traded in the State as a contractor or sub-contractor to a consortium known as Bóthar Hibernian, itself comprised of three companies: Mota-Engil (Portugal); Michael McNamara and Company; and Coffey Construction Limited. In November 2007 Bóthar Hibernian were awarded the public works contract to design and build the N7 Nenagh to Limerick Dual Carriageway by Limerick County Council.
Each of the plaintiffs was employed under written contract by the defendants for some part of the period between 2007 and 2009 in connection with the project. With the exception of the contract entered into by Sra. Cordosa Gastalho, the contracts signed by the other plaintiffs are, to all intents and purposes, more or less identical:
‘6. Rate of Remuneration
The rate of remuneration to which you are entitled is in accordance with the Construction Industry Registered Employment Agreement…. This remuneration is subject to the deduction specified in clause 7 below.
7. Board, Lodgings and Laundry services
As part of the terms and conditions of your employment, [RAC Éire] agrees to provide you with accommodation, meals and laundry service for the duration of your employment under this contract. In consideration of the provision of these services, [RAC Éire] will make a deduction from your hourly rate of pay as set out in clause 6 of this agreement in the amount of:
Board: 15€/day
Lodging: 17.50€/day
Laundry service: 3.75€/kg
You hereby authorise [RAC Éire] to make the said deduction on a monthly basis for the duration of the agreement.’
It was accepted in the High Court that it was a term of the...
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Da Silva v Rosa Construtores t/a RAC Contractors
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