by Breda O'Malley , Niamh Cassidy April-19-2021 in Employment Law

The first decisions of the Workplace Relations Commission ("WRC") are being delivered in respect of complaints made by employees concerning the impact and effect of the Temporary Wage Subsidy Scheme ("TWSS").  The case of Financial Controller -v- a Hotel is an important decision for employers who availed of the TWSS or its successor the EWSS.



The employee brought a claim under the Payment of Wages Act 1991, challenging the reduction by his employer of his gross pay when the employer availed of the TWSS.  The employee had maintained his normal net pay.


Key Facts

In April 2020, in light of COVID-19 and the closure of the employer’s hotel business, the employer made the decision to implement a 10% salary decrease. The employee signed a consent form confirming his agreement to the 10% reduction in his salary. In view of the severe downturn in the employer’s business, it was necessary for the employer to avail of the TWSS.

The employee objected to the fact that as he was receiving a non-taxable amount in his wages through the TWSS, he would be liable for an additional tax payment at the end of the 2020 tax year. The employee asserted that he did not give permission to the employer to reduce his gross pay beyond the agreed 10% reduction and that he was owed the alleged shortfall, which he required to pay his personal tax liability.

At the hearing, the employer submitted detailed information in support of its contention that it interpreted and applied the TWSS correctly and in line with the Revenue guidelines and pertinent legislation.



The WRC Adjudicator found that there was no deduction of wages as there was no deficit in the employee’s net pay. The Adjudicator disagreed that the employee had an entitlement to retain his gross pay or, to receive payment in respect of his impending Revenue liability for TWSS receipts. The Adjudicator stated that such a payment would have resulted in increased net pay.  The Adjudicator was satisfied that the reduction in gross pay effected as a result of the implementation of the TWSS by the employer correctly was authorised by the statute, the Emergency Measures in the Public Interest (COVID-19) Act.



Given the speed at which the subsidy schemes were introduced at the outset of the pandemic in Ireland, it is likely that several challenges may be brought by employees against employers in relation to the scheme.  Should you need advice in respect of any such challenges, we welcome you to contact the Hayes Employment Law Team.

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