Unauthorised deductions from wages
In the twelve month period to March 2018, employment tribunal statistics show that there were over 23,000 claims made to employment tribunals for unauthorised deductions from wages.
The payment of wages is protected by law in the Employment Rights Act 1996. The law says that employers mustn’t make deductions from wages, unless a law allows it (for example, income tax and national insurance deductions}, or if the contract of employment says deductions can be made or if the employee had previously agreed to the deductions from wages.
The law protecting wages also gives the right to employees to not make a payment to their employer, unless one of the exceptions applies such as an over-payment of wages or expenses.
There are a number of situations that can give rise to potential claims by employee for an unauthorised deduction from wages. This can include non-payment of holiday pay sick pay. Also, where an employee is suspended during the process of disciplinary investigation usually the employee is entitled to be paid during the period of suspension. So the non-payment wages in these circumstances may amount to an unauthorised deduction from wages.
Workers and employers who have suffered unauthorised deduction from their wages can enforce their rights through an employment tribunal claim. Claims must be made within 3 months of the deduction from wages taking place. Quite often unauthorised deductions from wages can be series of deductions made over a period of time. Where this is the case the worker is often able to successfully argue that the three month time limit for bringing the claim should only begin from the date of the last deduction.
There are also a number of other issues that can arise following unauthorised deduction from wages. This includes breach of contract, breakdown in trust and confidence in the employer-employee relationship and protection from dismissal for asserting statutory rights.
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