Salary deductions

Mudd14

For the legal wording refer to section 13/14 of the ERA 1996

Protection of wages
Deductions by employer

13 Right not to suffer unauthorised deductions

(1) An employer shall not make a deduction from wages of a worker employed by him unless—
(a) the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker’s contract, or
(b) the worker has previously signified in writing his agreement or consent to the making of the deduction.
(2) In this section “relevant provision”, in relation to a worker’s contract, means a provision of the contract comprised—
(a) in one or more written terms of the contract of which the employer has given the worker a copy on an occasion prior to the employer making the deduction in question, or
(b) in one or more terms of the contract (whether express or implied and, if express, whether oral or in writing) the existence and effect, or combined effect, of which in relation to the worker the employer has notified to the worker in writing on such an occasion.
(3) Where the total amount of wages paid on any occasion by an employer to a worker employed by him is less than the total amount of the wages properly payable by him to the worker on that occasion (after deductions), the amount of the deficiency shall be treated for the purposes of this Part as a deduction made by the employer from the worker’s wages on that occasion.
(4) Subsection (3) does not apply in so far as the deficiency is attributable to an error of any description on the part of the employer affecting the computation by him of the gross amount of the wages properly payable by him to the worker on that occasion.
(5) For the purposes of this section a relevant provision of a worker’s contract having effect by virtue of a variation of the contract does not operate to authorise the making of a deduction on account of any conduct of the worker, or any other event occurring, before the variation took effect.
(6) For the purposes of this section an agreement or consent signified by a worker does not operate to authorise the making of a deduction on account of any conduct of the worker, or any other event occurring, before the agreement or consent was signified.
(7) This section does not affect any other statutory provision by virtue of which a sum payable to a worker by his employer but not constituting “wages” within the meaning of this Part is not to be subject to a deduction at the instance of the employer.
14 Excepted deductions

(1) Section 13 does not apply to a deduction from a worker’s wages made by his employer where the purpose of the deduction is the reimbursement of the employer in respect of—
(a) an overpayment of wages, or
(b) an overpayment in respect of expenses incurred by the worker in carrying out his employment,
made (for any reason) by the employer to the worker.
(2) Section 13 does not apply to a deduction from a worker’s wages made by his employer in consequence of any disciplinary proceedings if those proceedings were held by virtue of a statutory provision.
(3) Section 13 does not apply to a deduction from a worker’s wages made by his employer in pursuance of a requirement imposed on the employer by a statutory provision to deduct and pay over to a public authority amounts determined by that authority as being due to it from the worker if the deduction is made in accordance with the relevant determination of that authority.
(4) Section 13 does not apply to a deduction from a worker’s wages made by his employer in pursuance of any arrangements which have been established—
(a) in accordance with a relevant provision of his contract to the inclusion of which in the contract the worker has signified his agreement or consent in writing, or
(b) otherwise with the prior agreement or consent of the worker signified in writing,
and under which the employer is to deduct and pay over to a third person amounts notified to the employer by that person as being due to him from the worker, if the deduction is made in accordance with the relevant notification by that person.
(5) Section 13 does not apply to a deduction from a worker’s wages made by his employer where the worker has taken part in a strike or other industrial action and the deduction is made by the employer on account of the worker’s having taken part in that strike or other action.
(6) Section 13 does not apply to a deduction from a worker’s wages made by his employer with his prior agreement or consent signified in writing where the purpose of the deduction is the satisfaction (whether wholly or in part) of an order of a court or tribunal requiring the payment of an amount by the worker to the employer

zzzLazyDaisy

There must be prior written agreement to deduct money from wages.

See sections 13 to 15 of the Employment Rights Act 1996, under the heading "Protection of Wages"

If there is no such written agreement the employer must pay the wages as normal. If the wages are not paid as normal, this is an unlawful deduction and the employee is entitled to make a claim to an employment tribunal for payment of the money.

If the employee does in fact owe the money, the employer must seek to recover it by some other means.

HOWEVER - note a payment in lieu of notice, and a redundancy payment are not considered to be 'wages' for these purposes, so a dedcution may be made from those payments to recover the money owed and the employee would have no come-back.

EDIT: just to add, if a tribunal finds that an employer is guilty of unlawful deduction from wages, the employer must repay the money AND it also loses the right to recover the money by any other means. So it is very important that an employer does not deduct money from wages without consent, even IF that money is legitimately owed to the employer by the employee (there are some exceptions but the damage to the company vehicle does not fall within those exceptions)

FURTHER EDIT: note the above restriction on recovering the money ONLY applies if the employment tribunal has made a decision on the unlawful deduction of wages point. So it is very common for employers to agree an 'out of court' settlement and pay the wages due without going to tribunal, in order to preserve their right to pursue the former employee in the county court later.

dudes_2

Mudd14 and zzzLazyDaisy, thanks a lot for your help