Labour Court dismisses unlawful wage deduction claim by €275k a year executive
An executive whose yearly earnings have topped €275,000 at recruitment company, CPL Resources plc, has failed in her unlawful wage deduction claim against the company.
This follows the Labour Court dismissing a claim lodged by Director at CPL Resources plc, Silvana Cuesta Carpio, against her employer under the Payment of Wages Act.
Ms Cuesta Carpio told the Labour Court that prior to her Director appointment in 2017, she had earned significant commission as a result of her work on one particular client account.
However, Ms Cuesta Carpio said that some months after her appointment as director she was assigned to work with clients other than the client where she was earning significant commission.
The Labour Court was told that Ms Cuesta Carpio’s overall earnings in 2018 were €278,000; €253,000 in 2017 and €211,000 in 2016.
According to the Labour Court report on the case, Ms Cuesta Carpio submitted that she is owed €239,000 for the period from April 2018 to March 2019 as a result of CPL Resources plc making commission deductions of that amount over that period.
However, after examining Ms Cuesta Carpio’s tabular statement of her commission history, the Labour Court calculated that Ms Cuesta Carpio claim for unlawful deductions amounted to €83,740 plus some element of €16,748 and some element of €20,748.
Ms Cuesta Carpio submitted that in May 2018 she reached an agreement with CPL Resources plc to "clean all fees owed to her from previous months up to March 2018" and a payment of €51,000 was made to her in August 2018 arising from that agreement.
In response to Ms Cuesta Carpio’s claim, CPL Resources submitted that no unlawful deductions took place and that wages alleged by Ms Cuesta Carpio to be due to her are not properly payable to her.
CPL Resources stated that the commission scheme in place is discretionary in nature and that this is specifically set out in the Ms Cuesta Carpio’s contract of employment dated October 2013.
The firm said that the contract signed by Ms Cuesta Carpio provides for the “company’s right to amend or withdraw the scheme based on the operational needs of the business”.
CPL submitted that this provision of the 2013 contract remains in force and was not deleted or removed by any subsequent amendment or addendum to the contract, of which there have been a number.
CPL stated that the meaning of Ms Cuesta Carpio’s claim is that she entitled to commission payments relating to a specific client account in perpetuity, regardless of whether or not CPL had continued to assign her to work on the particular account in question.
CPL said that this proposition “is an absurd one and clearly unworkable in any employment relationship”.
They said that Ms Cuesta Carpio’s commission was affected by her re-assignment in August 2017 arising from operational needs of the business.
CPL said it put in place a temporary transition arrangement whereby Ms Cuesta Carpio received a payment of €12,500 per month between August 2017 and January 2018 at which time her annual salary review would take place.
The firm added that Ms Cuesta Carpio conditionally agreed a new salary structure in April 2018.
In the Labour Court’s findings, chairman, Kevin Foley found that the alteration of Ms Cuesta Carpio’s commission scheme was provided for in her contract of employment.
Mr Foley said that as a result the alteration of Ms Cuesta Carpio’s commission scheme could not be considered an unlawful deduction.
Ms Cuesta Carpio was appealing a ruling of the Workplace Relations Commission (WRC) that had earlier dismissed her claim.
Mr Foley concluded that Ms Cuesta Carpio’s appeal cannot succeed and the decision of the WRC Adjudication Officer is affirmed.
