Sunday Premiums Rates of Pay – What is “Reasonable”?

The provision of compensation for work on Sundays pursuant to 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”.

Over the past 12 months the Labour Court has made the following determinations in a number of cases involving hotels, restaurants and leisure centres:

  • 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 or 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. But that is not to say that anything below those rates will be deemed unreasonable. For example, a 14% premium was deemed reasonable in Cadbury Ireland Ltd. –v- SIPTU (DWTO0720).

Specified Sunday pay rates have been introduced in some industries such as mechanical engineering and construction and there is currently an agreement in the pipeline for Electrical Contractors.

Businesses from all other sectors where no such agreements exist are reminded that the onus rests in the first instance with the employer and the employee to agree ‘reasonable’ compensation for Sunday work.

The Provision of meals and the Sunday Premium

The Labour Court has been very clear on this, meals cannot be provided to employees in compensation for the Sunday Premium. In Hyper Trust Limited-v- Gordins (DWT1467) 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 in lieu of 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 €11 per hour could be detailed in the contract as ‘€11 per hour, €1.00 of which is in paid in lieu of hours worked on Sundays’ or something similar.

If the contract simply states ‘€11 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.

If you require any further information regarding the Sunday Premium, please don’t hesitate to contact the advice line on 1890 253 369

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