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Outstanding Wages

It is unlawful for an employer to make deductions from an employee’s wages or underpay unless the employer has the employee’s agreement to the deduction or underpayment in writing. This agreement needs to be signed by the employee.

The only deductions that are permitted without agreement in writing are those that are required legally for example deductions for tax and NI at source and overpayments of wages.

This will be the case even if the employee owes the employer money.

If an employer makes a deduction that is not agreed the employee will be able to pursue the employer in either in the employment tribunal for unlawful deductions from wages and/or breach of contract. In the alternative an employee could bring a claim in the civil courts for breach of contract.

Bonus claims can be particularly valuable to an employee and require a careful analysis of the provisions that have been agreed between employer and employee. Often an employer will state that a bonus is completely discretionary and non contractual however this may not be the case if the bonus is paid regularly and/or based on measurable factors.

In the employment tribunal the employee will have 3 months less a day from the last deduction of wages.

Instead of bringing a claim in the employment tribunal or court, you could also consider trying to negotiate a settlement agreement with your employer. We have a wealth of experience in successfully negotiating settlement agreements.

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