January-20-2016 in Employment Law
Consultants John McDermott and Thomas Horgan brought two separate appeals against the recommendation of the Rights Commission in their dispute with the HSE over salary payable under new employment contracts.
Background facts
The appellants had signed revised consultant contracts with the HSE in September 2008. As part of these contracts, private practice was restricted. The appellants claimed that they did not receive all of their agreed salary increases and that unlawful deductions in their salaries occurred. The HSE held that the process which the appellants signed up to in 2008 was part of an exercise to identify the numbers who would sign up in order to establish funding which the organisation would require in implementing new contracts.
The HSE suggested that a further sanction/consent was at some stage required by the Minister for Health and the Minister for Finance by virtue of Section 22(4) of the Health Act 2004 and that the absence of such consent renders the portion of salary not received by the appellants as not properly payable. The HSE believed that the consultants were aware that ministerial sanction was required and expected that representative organisations had informed their members of this requirement.
Key issues
There were two key issues at stake.
- Whether the salary payable to the appellants pursuant to their contracts of September 2008 were properly payable.
The tribunal took the specific nature of the contracts into account and it was noted that they stated that the documentation “will embody the entire understanding of the parties in respect of the matters contained therein”. It was noted that it is conceivable that the appellants would have formed a legitimate expectation on entering into the contracts that the salary would be paid. However, it was noted that issues around legitimate expectation are not matters for the tribunal.
The tribunal accepted that the Health Act (S.22) contains a requirement for Ministerial approval of terms under a contract but it did not accept the notion that an employee must assume or is deemed to be on notice that this S.22 approval and consent is absent at the time of entering into a contractual obligation.
It was noted that the contract documentation outlines specifically what is to be the “entire understanding of the parties” and that it was open to the HSE to set out any qualifications into the contract/documentation.
The tribunal found that a close examination of Section 22 of the Health Act would not lead anyone to believe that the said consent would or could be retrospective. The tribunal found that the phraseology of the section leads to a contrary belief that one would assume that the exercise was completed pre contract.
The tribunal found that Section 22 obliges the HSE to have such terms and conditions approved prior to entering into a contract and not retrospectively. The tribunal noted that it would be reasonable to assume that the HSE on producing very detailed contracts with three distinct options for consultants would, prior to being furnished to any party for signature, have by implication the ministerial approval as provided in the Health Act.
The tribunal was satisfied that the salary as outlined in the contract was properly payable within the meaning of the Payment of Wages Act.
- Whether unlawful deductions had occurred as outlined in Section 6 of the Payment of Wages Act.
The tribunal noted that Section 6 is very clear in requiring that the consent of the employee must be furnished in writing prior to any deduction. The only documents furnished to the tribunal in these matters were the actual contracts in which there were no provisions which allowed for the employer to deduct the salaries. The tribunal noted that the deductions were not allowances or expenses.
The tribunal was satisfied that the deductions were unlawful within the meaning of the Payment of Wages Act.
Awards
With regard to the awards made to the appellants in these two cases, the tribunal agreed with the assertion that there is no provision in the legislation which obliges the tribunal to limit any award to the difference between what was paid and what should have been paid. Accordingly one of the appellants was awarded €14,000 and the other was awarded just under €100,000.
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