Throughout the course of the year clients have taken advice from us as to how to reduce their wage bill by reducing employees’ pay. One of the matters to be considered includes reviewing the employees’ contract to determine if there are any guaranteed wage increases. Not surprisingly we have yet to find a contract with any such guarantees.

The same can not be said for a case involving Aer Lingus where a Rights Commissioner held that a pilots contract which referred to his salary being on a “scale” meant that the pilot was entitled to an annual incremental increase and that the failure of Aer Lingus to make the payment amounted to an unlawful deduction from his wages.

Normally, an employee must prove that he has a contractual entitlement to a certain payment before a deduction from that payment can be found to be unlawful. Even though there was no clear reference to the increment in the pilot’s contract of employment the contract did refer to his salary as being on a scale “with a starting point”. The Rights Commissioner considered that the increment was automatic, invariable and was consistently applied across the entire pilot group, a point which Aer Lingus had not contested. It was also noted that the pilot had received the increment every year since commencement with Aer Lingus except for one year where it had not been paid on consent.

Interestingly the Rights Commissioner also considered a further point made by the pilot’s Trade Union that Aer Lingus were party to a collective agreement which stated that no reduction in pilot pay would occur before April 2011.

In short, the Rights Commissioner found that the failure to pay the increment led to a deficiency in the salary received by the pilot and as no prior consent was given the deduction was found to be unlawful.

This case is likely to be appealed and its outcome should be watched carefully by all those who have not paid or do not intend to pay increments but for the moment it is clear that the Rights Commissioners see the failure to pay an incremental pay rise as an unlawful deduction from an employee’s wages.