The High Court upheld the Minister for Social Protection’s method for calculating insolvency-scheme payments to three former White Sands Hotel workers, while leaving open a further review of the wage figures used in their cases.
In a judgment delivered on 13 October 2016, Ms Justice Baker found that the Minister could use a formula to determine what should be paid from the Social Insurance Fund against awards made under unfair-dismissal legislation. The formula was permissible and, in the circumstances, fair and rational, the court held.
The workers’ employment ended in February 2010 in what was described as a purported redundancy. The Employment Appeals Tribunal found in 2013 that they had been unfairly dismissed. On appeal, the Circuit Court increased their awards to €20,000, €60,000 and €70,000. The court had heard evidence about their actual and prospective financial losses, but its orders did not specify a calculation based on weekly pay.
After the hotel company became insolvent and a receiver was appointed, the Minister determined that the workers qualified for payments under the Insolvency Payments Scheme, but reduced the amounts payable by applying a €600 weekly statutory limit. The Minister’s method divided each Circuit Court award by the gross weekly wage on the relevant application form to estimate the number of weeks covered, then applied the weekly cap, subject to a maximum of 104 weeks. The resulting amounts were €6,480, €6,701.04 and €16,804.
The workers sought judicial review, arguing that the Minister had wrongly treated the Circuit Court awards as calculated by reference to remuneration and had used incorrect weekly wage figures. The Minister argued that the awards concerned financial loss and could be understood by reference to remuneration, even though the Circuit Court had not expressed them as a number of weeks’ wages.
Justice Baker accepted that the Scheme did not require an award to have already been calculated by reference to remuneration. She held that the Minister could treat the awards as referable to remuneration and devise a methodology to exercise her discretion. The Scheme, she said, provides limited relief against the effects of an employer’s insolvency; it does not make the Minister responsible for paying the employer’s entire debt.
On the wage figures, the court noted the workers’ concern that the form recorded gross weekly wages without separately capturing other remuneration elements. Justice Baker said including additional sums could have reduced the estimated number of weeks and therefore produced a smaller payment. She considered the workers may have benefited from the figures used.
The Minister had agreed to review the calculation in light of further evidence. The judgment did not order that a review take place: it said the workers were entitled to an order for review, but could choose whether to accept the offer, and that a review might not increase their payments. The court reserved the question of costs and whether to return the matter to the Minister for further review.