A veteran air freight worker has won an order for €52,000 against logistics giant DHL after it cut off an allowance that paid him €3.85 for every hour he had to spend away from Dublin.
Michael McNamara, a “flying loadmaster” who travelled widely in his job in charge of securing cargo aboard DHL aircraft, won his pay claim against DHL Express (Ireland) Ltd under the Payment of Wages Act 1991 was upheld in a decision published by the Workplace Relations Commission (WRC) on Tuesday.
Giving evidence in November 2021, Mr McNamara said he had worked for DHL since 1985, when he started as a courier, and worked his way up to the senior role in 2000.
He said he and his fellow loadmasters spent “a significant amount of time travelling and working abroad”, with “unsocial hours and disruption to routine and family life” the result.
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He said the company recognised this in May 2013 by providing them with new terms and conditions of employment, including a “time away from base” allowance comprised of duty pay and an overnight allowance.
Under the 2013 terms, he got duty pay of €3.85 for “every hour spent away from Dublin”, along with €5.75 for overnights in the UK, or €11.50 for every night further afield, he said.
The tribunal was told the arrangement ended early in 2019, after Mr McNamara made queries about his reporting line and was presented with a new job contract which would transfer him to a DHL firm in Germany.
The new contract was “silent on the matter of the time away from base allowance”, but Mr McNamara’s line manager later confirmed that it was “being removed” and replaced with a new policy to pay expenses for meals, accommodation and transport from March 2019 onward.
Mr McNamara said that after discussions, the allowance issue remained unresolved and he did not sign the contract – referring the matter to the WRC in August 2019.
He agreed not to submit any expense requests until the matter was decided on by the WRC, the tribunal was told.
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He told the employment tribunal that his contractual entitlement to the allowances was set out in a document specifying the relevant amounts in sterling, a position DHL’s representatives called “untenable”.
DHL, which was represented by Ibec, said the employer was “not aware of the existence of any such document” before it appeared in Mr McNamara’s legal submissions to the tribunal and that the complainant had never previously provided it.
“This cannot constitute a contract as it does not contain even the most basic elements that constitute a contract and is marked ‘DRAFT’. The parties are not named, it contains no date or signatures and it is a UK document,” it was submitted.
Ibec also challenged the WRC’s jurisdiction to hear the complaint, arguing that the payments had been to cover expenses rather than wages, so they were “expressly excluded” from the Payment of Wages Act, and added that the allowance “had not been subject to income tax”.
Mr McNamara was represented by McInnes Dunne Solicitors, which argued there was “no link whatsoever” between the duty pay and expenses, as the company had never sought “any vouching documentation or receipts” and that the duty pay allowance part had to be treated as wages.
It added that DHL already paid for accommodation, local travel expenses and breakfast – providing hot meals in the air and access to free or subsidised canteens on the ground in addition to the overnight allowance element of Mr McNamara’s pay.
“This must also be treated as wages,” his solicitors said in submissions, and argued the employer was in “clear contravention” of the Payment of Wages Act.
The adjudicating officer in the case, Aideen Collard, wrote that there was no factual dispute in the case and that the case would be decided on two main points of law – whether the payments were contractually due to Mr McNamara, and whether they amounted to wages, which were under the WRC’s jurisdiction, or expenses, which were not.
Ms Collard wrote that as it was agreed that monthly payments had been made to Mr McNamara in line with the terms set out in the “draft” document, the complainant had an “established contractual entitlement” to the time away from base allowances by “custom and practice”.
In respect of the second issue, Ms Collard wrote she had to “look behind the labels” applied to the payments by an employer – and noted that they were paid at either fixed or hourly rates “regardless or whether any expense was incurred by him or not”.
“The fact that the [allowance] had been untaxed does not assist one way or the other and is a matter for Revenue,” she added.
Ms Collard wrote that she was satisfied the old allowances were “intended to compensate loadmasters for having to regularly work abroad away from home and the consequent antisocial hours and disruption to routine and family life”.
She noted that the complainant’s losses from the withdrawal of the allowance had built up to €31,217 by the time of an oral hearing in November 2021, and continued to accrue since then, reaching €52,000 by this month.
“This constitutes a significant deficit in his wages,” she wrote, ordering DHL to pay the latter sum to meet the current estimated loss, “subject to any lawful deductions”.
