In Trinity Leisure Holdings Limited Trading as Trinity City Hotel v Sofia Kolesnik and Natalia Alfimova, the High Court found an express statement in a contract of employment that working on Sundays was taken into account in the setting of an employee's pay discharged that employer's Sunday work obligation.

In doing so, the High Court has laid down a clear precedent in what was a fiercely contested area of employment law.

BACKGROUND

The key facts were not in dispute. Both employees worked two out of three Sundays. Both employees' contracts of employment specified an hourly rate of pay in excess of the minimum wage. Both contracts claimed that hourly rate "includes your Sunday premium based on you getting every third Sunday off (i.e. you work two Sundays out of three)".

However, neither contract explained how it included the Sunday premium. Simply put, it did not say that X of the employees' hourly rate was specifically referable to their obligation to work Sundays. Neither did the employer provide any evidence to the Rights Commissioner or Labour Court as to how the hourly rate took account of Sunday work.

The only evidence presented to either forum were the two contracts of employment.

THE SUNDAY WORK OBLIGATION

Section 14(1) of the Organisation of Working Time Act 1997 (the "1997 Act") provides that where an employee is required to work on a Sunday, and their having to work on that day is not otherwise taken into account in determining their pay, they shall be compensated by the following means and to such an extent as is reasonable having regard to all of the circumstances:

a. an allowance;

b. an increase in the rate of pay;

c. paid time off in lieu; or

d. a combination of two or more of the above.

This case turned on the meaning of the highlighted words above. These words, if satisfied, would appear to dis-apply the remainder of the section. The meaning of the words has been inconsistently addressed over the years in a variety of Workplace Relations Commission and Labour Court decisions.

The present case marked the first time the High Court considered the question.

THE EARLIER DECISIONS AND CORE ARGUMENTS

At first instance, a Rights Commissioner had awarded the workers a 30% premium for all Sunday hours worked between 25 September 2013 and 24 March 2014. On appeal, the Labour Court upheld this, finding the employer "failed to tender evidence to the court in relation to what, if any, element of the complainant's hourly rate of pay was specifically referable to [their] contractual obligation to work on Sundays." This led to the employer's High Court appeal.

The employees' basic point was that, as their contracts were silent as to what part of their pay related to their Sunday work and no other evidence was produced on that issue, they had not received their Sunday work entitlement. It flowed from this that the only way an employer could defend a Sunday work claim was by identifying precisely what part of an employee's pay related to their work on Sundays. The employees further argued no weight should be given to their hourly rate being higher than the minimum wage. The employees argued the High Court should not even consider the employer's appeal where the employer had only identified findings of fact (which could not be appealed) and no findings of law.

The employer's appeal was grounded on the Labour Court's finding that the employer had to give evidence as to what part of the employees' pay specifically related to their Sunday work. The employer argued the contracts of employment discharged its obligation in respect of Sunday work. The employer did at some point argue that the hourly rate was effectively the minimum wage (then 8.65) plus an increase to 9.53 in discharge of its Sunday work obligation, however this argument was only made through legal submission rather than evidence.

THE HIGH COURT

The High Court allowed the employer's appeal, reversing the Labour Court's decision and dismissing the employees' Sunday work claims.

The High Court found the Labour Court erred in two critical respects:

1. The Labour Court was incorrect in finding there was no evidence before it as this finding ignored the express statement in the employees' contracts of employment. The High Court emphasised the wording in question was "in plain English and could not be more clear". Further, it was "not buried in small print somewhere in the middle of the contract, but appears on the front page". The High Court said that, in the face of that "clear and unambiguous language", the employees appeared not to have given any rebuttal evidence; and

2. The Labour Court misinterpreted the 1997 Act by creating an employer duty "to explain by way of a breakdown any statement to the effect that an hourly rate takes into account the obligation to work on a Sunday."

ADVICE TO EMPLOYERS

There are two important issues arising from this judgment:

1. A new test for employee challenges to a contract of employment stating that their working on Sundays is factored into their rate of pay

It will not be the end of the matter in an employer's favour that a contract has a statement that the rate of pay takes account of the requirement to work on Sundays.

However, such a contractual provision now shifts the burden of proof onto an employee who is alleging they have not received their Sunday work entitlement. Such an employee must provide "credible evidence to rebut the express provision of the employment contract, or at least so as to shift the onus of proof in the matter to the employer".

To demonstrate what an employee rebuttal might resemble, the High Court gave the example of events overtaking a contract of employment such as where the minimum wage increased and an employee's hourly rate did not. In such circumstances, the High Court held it would be "difficult to see how the rate of pay could still be said to reflect the requirement to work on a Sunday."

In short, an employee, faced with written evidence of their agreement that their hourly rate of pay takes into account an obligation to work on Sundays, must proactively provide evidence to counter that. By failing to do so here, the employees left the contract unchallenged and the employer was under no obligation to go into evidence on the issue.

It is likely that the High Court's interpretation will stand for a significant time given that these cases primarily turn on questions of un-appealable fact. In the present instance, it was only the Labour Court's dual errors of law in effectively finding that a contract of employment was not evidence and that an employer had to give evidence as to the precise amount of pay attributable to Sunday premium, that allowed this matter proceed to the High Court.

2. The Terms of Employment (Information) Act 1994 (the "1994 Act") does not require an employer to set out what part of pay specifically relates to Sunday working

Although not necessary to determine the present appeal, the High Court noted that "it is clear that in providing simply that the [employees] are to be paid a specific rate per hour worked, the [employer] has met its statutory obligation to the respondents under s. 3(1)(g) of the Act of 1994."

The High Court accordingly rejected the employees' contention that Section 3(1)(g) of the 1994 Act requires an employer to identify in their contracts of employment precisely what element of pay is attributable to the obligation to work on Sundays.

The judgment will be welcomed by employers as clarifying the position on Sunday work entitlements.