Ex-Tipperary Chamber of Commerce chief awarded €12,000 in unpaid wages

The chief executive of a Co Tipperary business group who was suspended for an investigation and then laid off when the pandemic hit has been awarded over €12,000 for illegal pay deductions.

A complaint by David Shanahan against County Tipperary Chamber of Commerce under the Payment of Wages Act has been upheld by the Workplace Relations Commission.

The local business group denied any breach of employment law and argued it had been “forced to place the entirety of [its] staff on lay-off” because of the Covid-19 restrictions.

Thomas O’Donnell BL, who appeared for Mr Shanahan instructed by Cleary & Co Solicitors, said his client was placed on paid suspension in September 2019 pending the completion of an investigation.

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When the first public health controls to deal with Covid-19 were introduced the following spring, Tipperary Chamber told his client he was being placed on lay-off from 23rd March, 2020, Mr O’Donnell said.

Mr Shanahan “took issue” with this as he understood himself to be on paid suspension but his salary was withheld on the basis of lay-off until 18th September, 2020, Mr O’Donnell added.

His client had been paid in full from September 2019 to March 2020, he submitted.

Mr Shanahan’s case was that Tipperary Chamber “wrongfully sought to convert a ‘holding suspension’ to ‘temporary lay-off’ to capitalise on the Covid-19 pandemic”, his barrister added – arguing his client had suffered an illegal pay deduction amounting to €12,854.80.

Employment consultant Tom Ryan of Peninsula Business Services, for the Chamber of Commerce, argued the pandemic restrictions meant the business group had no option except to lay off staff.

“As such lay-off was unpaid, the complainant’s wages were not ‘properly payable’ for the purpose of the Act for the duration,” he submitted.

A Tipperary Chamber board member who gave evidence to a remote adjudication hearing in November last year said the group’s activities “effectively reduced to zero”.

She told the commission that the lay-offs applied to all staff, with any management matters dealt with by the board as they arose.

The director said a new chief executive was appointed when Mr Shanahan’s employment came to an end – with the new employee availing of government wage subsidies.

In his decision, published on Wednesday, adjudicating officer Brian Dolan noted that Tipperary Chamber’s disciplinary procedure stated that an employee would be paid pending a disciplinary investigation.

“It is clear that once the respondent has commenced a disciplinary investigation, the complainant has a contractual entitlement to receive his full salary until such a time as the investigation is finalised and he returns to work or further engages with the disciplinary procedure,” he said.

The procedure document was “silent” on the question of stopping a period of paid suspension for a lay-off, Mr Dolan wrote, and the business group had therefore “not set out any contractual basis by which such payment could be discontinued in this manner”.

There was no evidence that the investigation could not go ahead and it was not clear that Mr Shanahan was unable to do his work, the adjudicator added.

As chief executive, Mr Shanahan’s job would have included managing the consequences of the public health controls for the organisation during the Covid-19 pandemic and setting out a recovery plan for the group and its members.

“The complainant could have potentially availed of the government subsidies to maintain his employment, as apparently his successor did,” Mr Dolan wrote. “The respondent cannot reasonably maintain that they were unable to provide any work,” he added.

He found the withholding of Mr Shanahan’s wages from 23rd March to 18th September, 2020 was an “illegal deduction” under the Payment of Wages Act and upheld his complaint.

He ordered Tipperary Chamber of Commerce to pay the complainant the sum deducted from his pay, €12,854.80.