Road workers win High Court appeal over 10% wage cut

A group of workers with a road maintenance company have won a High Court appeal over their employer’s decision to cut their wages in 2009 by 10 per cent due to difficult economic trading conditions.

Mr Justice Michael White said the case by 21 employees of Complete Highway Care (CHC) should go back to an Employment Appeals Tribunal (EAT) for further determination. The employees of CHC, which provides temporary traffic management and road maintenance services, had appealed a decision of the EAT which found the wage cut was lawful.

They alleged the 10 per cent wage deduction and the withdrawal, in 2010, of a bonus was unlawful.

A Rights Commissioner decided in 2013 the 10 per cent deduction was a breach of Section 5 of the Payment of Wages Act 1991 but the workers’ claim in relation to the bonus failed.

CHC appealed to the EAT which overturned the commissioner’s decision. The EAT said the 1991 Act did not apply as the cut was a reduction in wages rather than a deduction.

Mr Justice White found the EAT fell into an error of law in its finding and he remitted the matter to the EAT for further consideration in line with his decision.

The judge said he did not accept the EAT’s determination that a reduction of wages, as distinct from a deduction, was a pure question of fact. It was a mixed question of law and fact, he said.

Because an employer arbitrarily reduces the wages of an employee, without their consent, and also alters the tax and social insurance liabilities, this did not necessarily remove that reduction from the jurisdiction of the payment of wages legislation or entitle the employer to ignore its provisions, he said.