Witholding Salary to Clawback Bonus?

princeofpounds

Firstly, thanks to all who replied to an earlier thread asking about what constituted a proper job offer - my friend got all the proper material, and is now moving to a better place

But this isn't the end of the story...

Her old employer has put her on gardening leave, but there is a problem with her final salary payment.

She is in a commission-based job, and had recently been awarded and paid a sizeable bonus payment, greater than monthly salary. These bonuses were a regular feature of the job, awarded on a well defined scheme, but never written into contracts except to state that some discretionary bonus might be awarded.

This bonus was awarded for commissions accrued, as is normal practice, but that doesn't mean the company has actually been paid for them yet. Whilst employed, if a client did not pay up they would claw it back from the next bonus until they did.

So now the company are saying that they won't pay her final month's salary until they are sure the clients will pay the fees that are due.

Are the company allowed to do this?

Mudd14

Unless there is a clause in her contract then no they cant legally withold her basic salary. I would write to them stating you believe this is an unlawful deduction of wages which will be taken to employment tribunal if payment is not recieved in 7 days.

If later on they find that she owes money in respect of bonus' I would recommend they just invoice her?!

jdturk

Mudd14 wrote: »

If later on they find that she owes money in respect of bonus' I would recommend they just invoice her?!

I wouldn't even mention this last point

princeofpounds

Thanks. Can you point me to any particular legislation?

I'm not even sure they can clawback the bonus even by invoicing as it was already awarded and paid. Though she'd be probably be ok with paying back anything that never materialised as she's a pretty ethical person. Just wish this company were too.

bap98189

It's fairly standard practice to have a clause stating that commission or bonus payments can be withheld until the company receives payment from the customer. If it just these commission payments they intend to hold onto then that is probably fair enough, but if it the basic salary they intend to delay paying, that is not acceptable.

Mudd14

Employment Rights Act 1996 clearly sets out under Part 2 - Protection of Wages

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.

princeofpounds

Magic, thanks