7 working tips on how to present a paper on conference

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Minimum wages

When may deductions be made from wages lawfully ?

The basic right given to employees by Part II of the ERA 1996 is stated in s 13, whereby an employer must not make any deduction from wages unless:

(1) it is authorised by statute (eg Pay As You Earn (PAYE) and national insurance);


(2) it is authorised by the worker’ s contract; or

(3) the worker has previously signified in writing his consent to the making of it.

A deduction is defined in s 13(3) as follows:

‘ 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 wages properly payable by him to the worker on that occasion … the amount of the deficiency shall be treated … as a deduction …’

Therefore, if the total amount paid to the employee is less than the total amount properly payable (which will not include pure errors of computation), it will be a deduction.

Non-payment of a sum due can amount to a deduction, provided that the sum relates to a period of employment.  Non-payment of wages in lieu of notice after termination of the contract does not therefore fall under the ERA 1998 (Delaney v Staples and abogados de accidentes [1991] IRLR 112).

A unilateral reduction in wages can amount to a deduction, as can a non-payment of commission or holiday pay.

An employer may also make deductions where those deductions are covered by one of the exemptions in s 14 (see 1.10.3).

If the employer wishes to make any deductions from an employee’ s wages, for example penalties for substandard work or to recoup ‘ till shortages’ from employees handling money, authority to make the deduction should be specified in the contract.

retail employment For workers in this field, deductions for cash shortages or stock

deficiencies must not, except for the final payment of wages, exceed one-tenth of the employee’ s gross wages (ERA 1996, s 17).

Loans If the employer wishes to make deductions of a type not provided for in the  contract, for example, if the employer makes the employee a loan to be repaid by deductions from wages, the employee must give his written consent to the deduction. (In the example given, this would usually be done in the loan agreement.)

Definition of ‘wages’?

The ERA 1996 prohibits deductions from ‘ wages’ and s 27 of ERA 1996 defines

wages as any sum payable to the worker by his employer in connection with his

employment … including any fee, bonus, commission, holiday pay or other

emolument referable to his employment, whether payable under his contract of service or otherwise’ .