Employers in Ireland are required to pay employees all wages owed to them on termination of their employment. A failure to pay will be deemed an unlawful deduction. Due to an increase in claims brought against sports clubs and other organisations in the sports sector, our Sports Law team examines recent Workplace Relations Commission (WRC) decisions that illustrate how the law applies in practice. The team also outlines the potential consequences for employers who fail to comply.
What you need to know
- Employers in the sports sector must pay an employee wages that are “properly payable” on termination of employment.
- It is against the law to withhold a payment, without an employee’s consent.
- We have seen an increase in claims taken against sports clubs, businesses and organisations. Employees can bring their employment claims to the WRC.
Rules of the game - Payment of Wages legislation
The failure to pay an employee wages that are “properly payable” is an unlawful deduction. “Properly payable” wages are payments owing to employees related to employment, e.g., salary or bonuses. It is unlawful for an employer to make a deduction from salary without obtaining the prior written consent of an employee. Unpaid or withheld salary, notice pay and accrued annual leave are examples of unlawful deductions. Employees must prove that the money owed to them is “properly payable”. If successful, the WRC can award the employee compensation up to a maximum of their net wages. Alternatively, if the deduction/non-payment is greater than net wages, the WRC can award twice the amount.
Out of bounds – recent WRC decisions
Padel is the latest sporting craze in Ireland. Sports clubs across the country are installing courts and applying for planning permission to bring the game to local communities. Off the court, padel has also been in the WRC arena. In Andrés Martínez Cuquerella and 5 Star Stay Ltd. t/a as House of Padel[1], the WRC determined that a padel coach was not paid his “properly payable” wages when his employment was terminated. The padel coach worked for an indoor padel centre and after two months was dismissed immediately without notice. The WRC awarded the padel coach compensation for:
- Unpaid wages, including wages for the two public holidays he worked
- Unpaid accrued annual leave
- An unpaid coaching hour, and
- Two weeks’ pay in lieu of notice.
The padel coach was awarded €1,876.
The employer did not attend the hearing and the Adjudication Officer noted that the employer did not at any time engage with the WRC. The Adjudication Officer was critical of the text messages sent by the employer to the padel coach after he was dismissed. In her decision, the Adjudication Officer described the texts as “intimidating and threatening in tone and print”, “heavy handed and out of order”.
Horse play
In Katie Sheehan and Tiernan Gray t/a Tg Sport Horses,[2] the WRC awarded compensation to a horse groom/yard worker for unpaid wages on termination of employment. The working relationship broke down and the horse groom resigned. The employer withheld part of her final salary. The Adjudication Officer held that the withholding of partial final salary was an unlawful deduction. The employee did not give permission for this deduction in pay. The Adjudication Officer rejected the claims for eight days of accrued annual leave and notice payment. This part of the claim was not “particularised” and was considered “excessive” in the circumstances, as the horse groom had only been employed for six weeks before she gave notice to her employer. The horse groom was not awarded compensation for notice because she did not have enough service to qualify for the payment. The Adjudication Officer awarded the horse groom the total amount of her unpaid wages in the amount of €280.
Interestingly, the WRC referred to a joint publication it developed with Horse Racing Ireland in 2020, ‘The HRI Employment Guide for the Horse Breeding and Racing Sectors’. The Adjudication Officer highlighted the importance the Guide placed on adopting good practice and applying fair procedures when the employment relationship ends. In her decision, the Adjudication Officer commented that, if the Guide had been used by both parties “a much more respectful conclusion of employment” could have occurred. While the Guide is not legally binding, it is a helpful resource for those employers in the equine sector. However, we caution readers to take note that the Guide was published in 2020, ie before the Supreme Court’s decision in the Revenue Commissioners v Karshan (Midlands) Ltd. t/a Domino’s Pizza[3] and recent updates to employment law.
Key takeaways
The key takeaway for sports clubs and employers in this sector is that “properly payable” payments must be made to an employee on termination of employment. Withholding salary, accrued annual leave and notice payments may amount to an unlawful deduction. Employers should take note that WRC hearings are held in public, the names of the parties are published and decisions are available online. These decisions are frequently reported in the Irish media.
Top tips
To reduce WRC claims, sports clubs and businesses should consider the following:
- Ensure payroll and employee records are accurate as this information will be used to process final payments made to an employee.
- Check contractual notice period and if applicable comply with pay in lieu of notice terms.
- Calculate accrued but untaken annual leave up to the termination date to ensure there is not an underpayment.
- Review working time records as employees in this sector may work public holidays and/or Sundays and should be paid accordingly.
- To reduce the risk of disputes or claims, employers should ensure that the final payslip contains total wages owed to an employee.
To help ensure your sport stays on the back pages of the newspaper, contact our Sports Law team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.
[1] ADJ-00057973
[2] ADJ-00053224
[3] [2023] IESC 24
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