First published: September 28th 2018
Last updated: April 28th 2023
Sunday Working Rates of Pay – What Premium is “Reasonable”?
Section 14 of the Organisation of Working Time Act (OWTA), 1997, sets out that the amount paid to staff for working Sundays must be “reasonable… having regard to all the circumstances”.
Employers therefore have a level of discretion when deciding what is reasonable when it comes to remunerating staff for Sunday work.
The important point to note for employers is that they must recognise Sunday work by paying a premium.
Labour Court Rulings on Sunday Working
The Labour Court has made a number of rulings involving employers in the hospitality industry which found that:
- a hotel paying staff a Sunday premium of 5 cents per hour was deemed “not reasonable”
- a restaurant paying staff a Sunday premium of 33% was deemed “reasonable”
- a leisure club paying staff a Sunday premium of 25% was deemed “reasonable”
The WRC and Labour Court place a heavy focus on the term ‘reasonable’ and award compensation to an employee if they deem the premium to be unreasonable.
In the absence of any specific guidelines, the general trend across industries suggests that many employers are paying a Sunday premium of around 25% to 33% as it is highly likely that this will be deemed reasonable based on Labour Court case law.
Each case will nonetheless be decided on its own facts and circumstances.
Is there a Sectoral Employment Order in place?
Specified Sunday pay rates may be required under a Sectoral Employment Order if the employer operates within an industry that is subject to a SEO. Employers in the mechanical engineering and construction sectors are currently bound to abide by the minimum pay rates set out in the SEOs governing their industries.
A reasonable rate of pay for Sunday work should be agreed between the parties
Businesses that are not bound by the terms of a SEO should note that the onus rests in the first instance with the employer and the employee to agree ‘reasonable’ compensation for Sunday work.
Free meals and the Sunday Premium
Some employers have sought to include other forms of compensation such as free meals in place of a reasonable rate of remuneration. The Labour Court has issued clear rulings confirming that employers must not claim that meals provided to employees is adequate compensation for working on Sundays.
In Hyper Trust Limited-v- Gordins, the Labour Court concluded that “the Respondent is seeking to substitute a benefit in kind, access to free meals, for the payment of an allowance or the granting of additional time off. Such a substitution is not provided for in the Act.”
Incorporating the Sunday Premium into a Composite Hourly Rate
If an employer is paying a composite rate which includes the Sunday premium, then it must be detailed on the employee’s contract of employment and it must be clearly discernible as to how much of that rate is attributable to the Sunday premium.
If it is not clearly discernible then the WRC or Labour Court will simply deem the higher composite rate as the employee’s normal rate, and require the employer to pay an additional Sunday premium on top of it.
For example, paying €13.50 per hour could be detailed in the contract as ‘€13.50 per hour, €2.00 of which is in paid in respect of hours worked on Sundays.’.
If the contract simply states ‘€13.50 per hour which encompasses the Sunday premium’ then this will not satisfy the Act/Labour Court as the actual Sunday premium rate is not identifiable.
Get expert advice on minimum pay rates
Failure to pay the correct wages is the most common cause of action against employers in the WRC.
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