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Labour Court reduces Reference Period by Annual Leave Taken To Calculate the Relevant Banded Hour Contract

Intro

In the recent decision of Cliona O’Leary v Aer Lingus Ireland Limited, DWT207, the Labour Court dealt with an appeal by the Respondent at first instance, Aer Lingus, against a decision of an Adjudication Officer made under the Organisation of Working Time Act 1997 (the “Act”)  in relation to Cliona O’Leary’s entitlement to be placed on a banded hours contract in accordance with Section 18A of the Act. The Adjudication Officer concluded that the complaint was well founded and that the Complainant should be placed in a Band G contract.

Facts

The Complainant is employed by the Respondent as Check In staff and has a contract of 20 hours, exclusive of all breaks. In April 2019 the Complainant applied to be placed on a new contract to match her hours worked in line with the amendments to the Act. The Respondent placed the Complainant on Band H, 37.5-hour week on 16th April 2019 however on 1st May 2019 the Respondent confirmed that an error had occurred and the complainant would be placed on Band F (average working week between 26 and 31 hours, exclusive of all breaks). The Complainant signed this change to her contract on 12th April 2019 on a without prejudice basis. She subsequently made a complaint to the WRC, the outcome of which the Respondent appealed to the Labour Court.

It was submitted that the Respondent had not included the hours of the Complaint’s annual leave entitlement in the base numbers relied on when deciding the appropriate banding. This resulted in a false and lower calculation of average hours for the banded hours over the 12-month reference period. The Complainant sought an order to place her on Band G. 

The Respondent has not disputed the legitimacy of the Complainant’s request for a banded hours contract. The issue between the Parties was solely in relation to which band applied. Counsel for the Respondent submitted that the higher band sought by the Complainant was not required by section 18A of the Act. The Respondent submitted that in its view, the Act does not require the employer in determining the average hours worked by an employee in a reference period to include time spent on annual leave as working time is defined as “any time that the employee is- (a) at his place or her place of work or at his or her employer’s disposal, and (b) carrying on or performing the activities or duties of his or her work,”.

The Respondent submitted that for an interpretation of the legislation that would oblige the employer to calculate the average number of hours worked by the Complainant by taking account of all hours where the Complainant actually worked averaged across a 52-week reference period and that periods spend on annual leave should not be calculated as periods of time where the Complainant worked and as such the 52-week devisor should be employed to the quantum of hours worked over the reference period.

The Complainant argued that were the calculation of the Respondent to be correct, the taking of annual leave by employees would have the effect of reducing the average number of hours worked by employees per week for the purposed of calculating their entitlement to a band of weekly working hours and consequently reducing the protections afforded under the Act.

Decision

 The Court concluded that the only reasonable means to ensure that the plain intention of the Oireachtas can be achieved is by interpreting the Act to mean that the divisor to be used to calculate the average number of hours worked by an employee per week during the reference period should be determined by excluding the number weeks spent on annual leave in the period. Therefore, the reference period in this case would exclude the 4 weeks spent on annual leave by the Complainant and therefore based on a 48-week reference period. The Court determined that the complaint is well founded and requires the Respondent to comply with Section 18A and place the Complainant on the appropriate band of hours based on this reference period.

Takeaway for the Employers

Employers should ensure that they do not include annual leave taken by employees as part of the reference period for calculating the appropriate band of hours applicable to the employee.

Link

Authors – Eva Lindsay and Anne O’Connell

21st  December 2020

Anne O’Connell Solicitors

19-22 Lower Baggot Street, Dublin 2

www.aocsolicitors.ie

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