Payment of Wages Act – Allowances*

Payment of Wages Act – Allowances*

In ADJ-00026136 this issue arose.

The employer in this case raised two preliminary objections.

The first was that the payment the complainant was referring to in his claim was an allowance which is only paid to employees who carry out the duties of driving and is not paid while on annual leave or sick leave. The case of McKenzie and Others -v- Minister for Finance and Others 2010 IEHC461 is one where Mr Justice Edwards held

“Finally, the Court agrees with the respondent’s submission that the Payment of Wages Act, 1991 has no application in the circumstances of this case. Firstly, as has being pointed out, correctly in the Courts view, the reduction in the PDF allowance is not a “deduction” from wages payable. It is a reduction of the allowance payable. The Act has no application to reduction as a distinct from “deduction”. Secondly, even if that were so, any alleged breach of the Payment of Wages Act, 1991 is not a justiciable controversy before the High Court in circumstances where that Act set up specific enforcement mechanisms to be availed of elsewhere in such circumstances”.

It is now well established that a reduction of an allowance is not a deduction under the Payment of Wages Act. Where a person’s salary or wage falls to a lower sum then regardless of what title is put on it it is a “deduction”. In addition, the Payment of Wages Act does not apply to allowances.

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*Before acting or refraining from acting on anything in this guide, legal advice should be sought from a solicitor.

**In contentious cases, a solicitor may not charge fees or expenses as a portion or percentage of any award of settlement.

Richard Grogan

Author Richard Grogan

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