‘There will be consequences’: Shop manager penalised for reporting cash-in-hand wages to taxman wins €40,000

She told the Workplace Relations Commission that when she followed the directions of the taxing authority and returned the money in cash, her employer told her: “There will be consequences.”

The tribunal has ruled that the worker was stripped of managerial duties, threatened and put under pressure because she refused to cooperate with her employer’s “illegal” actions.

In an anonymised decision, it has upheld her complaint under the Protected Disclosures Act 2014 against the unidentified operator of a convenience store, where she worked for more than a decade.

The employee, Ms A, told the WRC that that having managed the shop since 2023 she found her job was reduced to “mainly packing shelves” at the time of a hearing last month.

In March 2023, the employee said, the company had transferred another employee, Ms E, from a shop it was closing, and appointed the woman store manager in May that year, the complainant said.

One of the directors of the limited company operating the store, Ms D, denied that the complainant was being “demoted” but told her to “get behind” the new manager, the employee told the WRC.

When the complainant asked for the changes to be set out in writing, Ms D told her that the other director, Mr D, was not prepared to “put anything in writing”, the complainant said in her evidence.

In June 2023, Ms A said that Ms E “abused” her for calling a maintenance service to have a fridge repaired and two days later shouted at her “in front of staff and customers” for ordering in crisps.

Ms A had been getting €760 gross weekly wages, amounting to take-home pay of €600 a week up to September 2023, the WRC was told.

However, Mr D told Ms A on 7 September that year that he would change her gross pay to €350 and pay her €250 in cash each week, the worker said.

On Friday 22 September 2023, Ms A said she received €237 from a separate bank account to the one her employer normally used for payroll. She told the WRC she contacted the Revenue Commissioners about this and was advised to return the money and ask that it be processed through payroll – eventually handing it back in cash to Ms D, she said.

After this Mr D told them the business “couldn’t sustain their wages”, Ms A said. He agreed to put the balance through payroll in the first week of October, but told them: “There will be consequences,” the complainant added.

Later, Ms A said, her hours were changed from a 6am start to 7am, leaving her “under pressure every morning” because she had less time to prepare the shop to open up. She told the WRC she had been “humiliated” by being stripped of her duties as a manager and that she felt “intimidated” because of the way her employer and the new manager were treating her.

In her summary of Ms A’s evidence, WRC adjudicator Catherine Byrne recorded: “Mr D doesn’t speak to her now and that he just stands and stares at her. She said that she assumes he is trying to intimidate her.”

Ms Byrne noted that the employer had looked for an adjournment when the case was called on at the WRC, which was refused. The complaint was heard in the absence of the employer.

The adjudicator said Ms A’s evidence had been “credible” and that the employee was suffering a detriment “because she refused to co-operate with her employer and [because] she reported a breach of the tax code to the Revenue Commissioners”.

Upholding the whistleblower penalisation complaint, Ms Byrne wrote: “Every employer knows that paying wages ‘under the counter’ is an offence…

“The respondent told the complainant that his business couldn’t sustain her full wages and that there would be ‘consequences’ for her refusal to cooperate.

“I am satisfied that by telling her there would be consequences for her refusal to co-operate, the respondent threatened the complainant,” Ms Byrne wrote.

Setting compensation of €40,000 – a year’s pay – for the breach of the Protected Disclosures Act, Ms Byrne noted the law was “intended to be a deterrent to employers from taking retaliatory action” and that this was reflected in the award.

She added that Mr D had been obliged by law to give written notice of his intention to pay Ms A partly in cash.

“As what he was proposing was illegal, I accept that it was unlikely that he would confirm the change in writing,” Ms Byrne wrote. She awarded four weeks’ pay, €3,040, for a breach of the Terms of Employment (Information) Act, and gave a compliance direction.

The adjudicator also found the employer in breach of the Payment of Wages Act 1991 because payroll errors linked to the move to pay cash wages between September 2023 and January 2024 had left the employee out of pocket by €581.30 and directed payment of this sum.

The total awarded to the worker in the case was €43,621.30.