Workplace Relations Commission: Airline ordered to repay training costs deducted from pilot’s wages
An airline has been ordered to repay training costs which were deducted from a pilot’s wages when he resigned from the company within three years of being trained on a new aircraft.
The pilot had signed a training bond with the airline when he was based in London, however, when he was relocated to Dublin and given a new contract, there was nothing in the contract authorising a deduction from his wages based on the training bond.
Ordering the repayment together with compensation for breach of the Payment of Wages Act 1991, Adjudication Officer Davnet O’Driscoll made a total award of €5,015.44.
The complainant is a Pilot who was employed by a UK Airline and completed his training in 2015. He paid for his training on the company’s existing aircraft, which he submitted to the Commission was very costly – however, in September 2016, the airline introduced a new aircraft, which required him to sign a training bond with the company. He submitted that when one of his colleagues refused to sign the training bond for the new aircraft, he was made redundant.
After signing the training bond, he was told that his base was changing from London to Dublin. This was the second time in a nine month period that he had been forced to move his base. He was given his P45 from the UK company, and told that he would be issued with an Irish contract. Since the Irish contract did not mention any training bond, he believed it did not apply.
He handed in his notice in May 2018, and left his employment in August 2018. After issuing his notice, the complainant made it clear that he did not agree to a deduction from his salary; however, on termination, the respondent company deducted €3,431.62 from his wages.
Thereafter, the complainant sought adjudication from the Workplace Relations Commission under section 6 of the Payment of Wages Act 1991.
The respondent company submitted that the cost of the complainant’s training on the new aircraft cost €10,000 and that this was subject to a training bond which provided a scaled level of repayment if the complainant resigned within three years of his training. Since the complainant’s training was completed in September 2017, the respondent company submitted that the deduction was authorised by the employment contract.
Section 5 of the Payment of Wages Act 1991
The respondent company relied on section 5 of the Payment of Wages Act 1991, which regulates when an employer is allowed to make a deduction from an employers wages.
Section 5(1) of the Payment of Wages Act 1991 states that an employer shall not make a deduction from the wages of an employee (or receive any payment from an employee) unless:
- the deduction (or payment) is required or authorised to be made by virtue of any statute or any instrument made under statute,
- the deduction (or payment) is required or authorised to be made by virtue of a term of the employee’s contract of employment included in the contract before, and in force at the time of, the deduction or payment, or
- in the case of a deduction, the employee has given his prior consent in writing to it.
Adjudication Officer O’Driscoll said that section 5(1)(a) did not apply in this instance.
Considering section 5(1)(b), Adjudication Officer O’Driscoll noted that the complainant’s contract of employment from 2015 relating to his time in the UK did not contain any consent to deductions or payments from his wages or salary by the respondent company. Adjudication Officer O’Driscoll said that when the complainant signed the training bond in September 2016, he was employed in the UK and received a P45 from the UK Airline. When he relocated to Dublin and signed a new contract of employment, he understood that the training bond was no longer applicable as he had moved to a new company in Ireland – and indeed the contract did not make any reference to training costs.
Considering section 5(1)(c), Adjudication Officer O’Driscoll said this required prior written consent from the employee in the case of a deduction – which was not given by the complainant.
Adjudication Officer O’Driscoll noted that in Earagail Eisc Teoranta v Doherty & Ors  26 ELR 326, Mr Justice Nicholas Kearns (then President of the High Court) said that the “exceptions listed at (a), (b), and (c) of section 5(1) are clearly not to be taken conjunctively”.
Adjudication Officer O’Driscoll also considered section 5(2)(b) of the Payment of Wages Act 1991, which states that an employer “shall not make a deduction from the wages of an employee in respect of…any goods or services supplied to or provided for the employee by the employer the supply or provision of which is necessary to the employment” – unless a number of conditions are satisfied.
Deduction not authorised in new contract
Adjudication Officer O’Driscoll said he was not satisfied that the respondent company had complied with the provisions of section 5(1)(b) and section 5(2)(b), that the deduction was authorised by virtue of a term in the complainant’s contract of employment before and in force at the time of the deduction, in light of the termination of employment of the complainant from the UK company.
Adjudication Officer O’Driscoll was also not satisfied that the complainant consented to the deduction of training costs at any time later – the contract of employment did not authorise deduction of the training costs, specify the amount owed, or provide any calculation method for deduction of the training costs to ensure this was fair and reasonable on termination of his employment.
Finding the complaint well founded, Adjudication Officer O’Driscoll directed the repayment of €3,431.62, together with €1,583.82 in compensation for breach of the Act.
- by Róise Connolly for Irish Legal News
© Irish Legal News Ltd 2020