Wages Owing / Deduction From Wages

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The Employments Rights Act 1996, sections 13 – 27 determine the circumstances in which:

 

  1. An employer can and cannot deduct wages from a worker’s salary; and
  2. An employer may receive a payment from a worker.

 

An employer is not entitled to make a deduction from wages of a worker employed by him unless:

 

  1. 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
  2. the worker has previously signified in writing his agreement or consent to the making of the deduction.

 

The right of a worker not to suffer deductions does not apply to the deduction from a worker’s wages made by his employer where the purpose of the deduction is reimbursement of:

 

    1. An overpayment of wages; or
    2. An overpayment in respect of expenses incurred by the worker in carrying out his employment.

 

Furthermore, such deductions do not apply to a deduction of a worker’s wages:

 

      1. In consequence of any disciplinary proceedings if those proceedings were held by virtue of a statutory provision;
      2. 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;
      3. Where the worker has taken part in a strike or other industrial action and the deduction is on account of the worker having taken part in that strike or other action; or
      4. Where there is a deduction made with the worker’s prior agreement or consent signified in writing where the purpose of the deduction is the satisfaction of an order of a Court or Tribunal requiring the payment of the amount to the employer.

Finally, such deductions do not apply to a deduction in pursuance of any arrangements which have been established:

      1. in accordance with a relevant provision of his or her contract where the worker has signified his or her agreement or consent in writing; or
      2. 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.

An employer is not entitled to receive a payment from a worker employed by him. The worker’s right and the exceptions broadly mirror those pertaining to the right not to suffer unlawful deductions.

 

The definition of wages includes:

 

      1. Any fee, bonus, commission, holiday pay or any other emolument under the worker’s contract of employment;
      2. Statutory sick pay;
      3. Statutory maternity pay;
      4. Statutory paternity pay or additional statutory paternity pay;
      5. Statutory adoption pay;
      6. A guarantee payment;
      7. Any payment for time off under Part VI of the Employment Rights Act 1996 or section 169 of the Trade Union and Labour Relations (Consolidation) Act 1992.
      8. Remuneration on suspension on medical grounds and remuneration on suspension on maternity grounds pursuant to sections 64 and 68 or the Employment Rights Act 1996;
      9. Remuneration on ending the supply of an agency worker on maternity grounds;
      10. Any sum payable pursuant to an order for reinstatement or re-engagement by an Employment Tribunal;
      11. Any sum payable by order of an Employment Tribunal for the continuation of a contract of employment  under section 130 of the Employment Rights Act 1996 or section 164 of the Trade Union and Labour Relations (Consolidation) Act 1992;
      12. Remuneration under a protective award under the Employment Rights Act 1996, section189.
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