An employment inspector acted beyond his power by refusing to refer a complaint to the Employment Tribunal.

Janice Fleming, a former server and assistant manager at Flanagan’s Irish Pub and Restaurant, alleged that deductions were made from her pay without her permission, but labour relations officer Glen Lake did not transfer the matter because he found the restaurant had not breached the Employment Act.

But in a recent ruling, the Supreme Court ruled that Mr Lake did not have the power to make such a legal determination.

In the decision, Puisne Judge Charles-Etta Simmons wrote: “Given that Bermuda’s economy has a strong tourism base and as such depends heavily on the service industry, it was irrational in my view for the Inspector to assume for himself a matter of great public importance such as the issue of determining the distinction between wages, tips, gratuities and commissions and whether they fall to be determined as part of the complaint filed under the Act.”

The court heard that Ms Fleming worked at Flanagan’s between 2004 to December of 2010. She was initially hired as a server, being paid $5.50 an hour gross, in addition to a portion of the 15 percent service charge and any additional sums given voluntarily by customers.

She was later promoted to Assistant Manager with a gross pay of $12.50 per hour, but said that in March of 2010 she was demoted back to being a server without any notice or warning.

She alleged that not only was the demotion against the terms of her contract, the restaurant was making unlawful deductions from the pool of funds collected by the 15 percent service charge and making other wage deductions without employee consent.

Flanagans informed Ms Fleming by letter that it was terminating her employment as of January 3, 2011, citing disruptive behaviour and an inability to work with management. She instead resigned on December 30, 2010.

The court heard Ms Fleming made a formal complaint to Mr Lake, but despite the restaurant offering Ms Fleming a settlement, negotiations were unsuccessful.

With the dispute still ongoing, Ms Fleming requested in late 2012 that the matter be transferred to an employment tribunal, but Mr Lake informed her this February that he would not refer the matter, saying he had made a determination that Flanagan’s had not acted in breach of the law as alleged.

During a hearing, lawyer Henry Tucker, representing Ms Fleming, argued Mr Lake had acted beyond his powers by adjudicating the matter between the parties and making several determinations, including one on the distinction between a voluntary “tip” and a mandatory “commission”.

In her judgement, Mrs Justice Simmons wrote: “In my view it is highly undesirable for an Inspector to ground his decision to not refer a matter to the Tribunal on the basis of his interpretation of, and opinion on, the law.

“The inspector cannot extend his jurisdiction to making such findings and opinion. The issue complained of is one of strict law and fact; quintessentially circumstances in which the Tribunal is empowered under the Act to solicit legal advice in carrying out its functions.”

She ruled Mr Lake had improperly exercised his power and failed to take relevant considerations into account when exercising his power, ordering that Mr Lake’s decision not to refer the application be set aside and that he again consider Ms Fleming’s complaint be transferred to the Employment Tribunal.