[Worth A Sticky] Deductions from salary for holiday taken when leaving a company (applies to any deduction).

[letterman]

Whilst researching for a case I am currently working on I came across the case of MISS R S HILL APPELLANT v HOWARD CHAPELL RESPONDENT.

Word Doc Link www.employmentappeals.gov.uk/Public/Upload/EAT1250012032002.doc

 

HTML Link

Appeal No.

 

Basicaly what this means is unless an employer has a written agreement in place with an employee and that employee has given consent in writing the employer can not deduct any money from salary that is not authorised or required by virtue of a statutory provision.

 

Having a clause in a contract of employment is not enough to authorise deductions in law.

 

Interestingly in the case above the lady had left the company half way through a holiday year at which time she had taken 15 days holiday but would have only been entitled to 10, the employer deducted the 5 excess days from her salary (quite reasonable you would have thought), the result of the case was that they had to pay it back to her as no agreement was in place which was agreed by the employee in writing.

 

This can be applied to most of the problems we see on here where an employer is attempting to deduct money for traing or anything else, no written agreement from the employee and that is the end of the matter no deduction!

[elche]

Basicaly what this means is unless an employer has a written agreement in place with an employee and that employee has given consent in writing the employer can not deduct any money from salary that is not authorised or required by virtue of a statutory provision.

 

Having a clause in a contract of employment is not enough to authorise deductions in law.

 

 

1) I agree that deductions from wages is a regular question here in the employment forum. However, if any OP re this issue is to be sticky, then surely it should concisely summarise when, and when not, such deductions are permitted.

 

With the greatest respect the OP does not do that.

 

2) Whilst I agree that any clauses in employee's contracts pertaining to allow deductions have been interpreted very narrowly by the Courts, I do not believe that, "Having a clause in a contract of employment is not enough to authorise deductions in law."

 

Surely if such a clause is drafted correctly, the worker has, "...previously signified in writing his agreement or consent to the making of the deduction.." as per ERA 1996 s. 13(1) ..... and therefore, such deduction is legal.

 

I shall read your case law, and see if it changes my interpretation of this Act.

 

Kind regards

 

Che

[letterman]

I would agree that if the clause is drafted carefully it could be enforceable, perhaps my statement was a bit sweeping and generalised. I think you would agree though for such a clause to be a valid part of a contract of employment it would have to be very detailed and would almost be a seperate contract in itself (hmm does that make sense?).

 

Anyway I would certainly bow to your greater knowledge of these things. Most of my knowledge has come from hours of research prompted by info you first sent me to help with my sons case.

 

1) I agree that deductions from wages is a regular question here in the employment forum. However, if any OP re this issue is to be sticky, then surely it should concisely summarise when, and when not, such deductions are permitted.

 

With the greatest respect the OP does not do that.

 

2) Whilst I agree that any clauses in employee's contracts pertaining to allow deductions have been interpreted very narrowly by the Courts, I do not believe that, "Having a clause in a contract of employment is not enough to authorise deductions in law."

 

Surely if such a clause is drafted correctly, the worker has, "...previously signified in writing his agreement or consent to the making of the deduction.." as per ERA 1996 s. 13(1) ..... and therefore, such deduction is legal.

 

I shall read your case law, and see if it changes my interpretation of this Act.

 

Kind regards

 

Che

[elche]

Cheers for that Letterman, I thought I had seen the name somewhere.

 

I have just been reading your case and, as it is a Friday I have had a glass of wine, but I think that the reason the employer fell down in your case was because:

 

The worker is entitled to paid holiday, up to 20 days per annum, under regulation 16(1). It is only where there is a relevant agreement providing for credit to be given to the employer for excess holiday taken that regulation 14(4) permits the employer to recover the excess payment in accordance with section 13(1) ERA.

 

And thus this case, as other before it is merely another example of ET, EAT'a and Courts reminding employers that deductions from wages (and as in this case holiday pay =wages), will always be carefully examined, and, barring statutory provisions, will NEVER be implied into an employee's contract.

 

Kind regards, and I hope your son is well.

 

Che