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// Home / Practice Areas / Employment Law / Unlawful Wage Deduction

Unlawful Wage Deduction


It is unlawful for an employer to make any deduction from the wages of an individual employed by him or her unless the worker has agreed to the deduction being made or it is required by law, for example deductions for PAYE and national insurance. Deductions may also be made to recover a prior overpayment.

If unlawful deductions have been made, one should first try and resolve the matter informally or by lodging a formal grievance. If such steps fail to resolve the matter, then one can bring a claim in an Employment Tribunal. A claim may also be brought for a breach of contract in the civil courts. To that end, as an unlawful deduction from wages would usually render the employer in breach of the employment contract, an employee may be entitled to resign due to the same and thereafter claim constructive dismissal. Accordingly, it is crucial that employers seek advice before considering making any deduction from wages, especially as the terms wages is interpreted widely and can include bonuses, commission and contractual entitlements such as holiday pay. Moreover, employees should seek advice before terminating his or her contract of employment on the basis of an unlawful deduction of wages as a successful claim for constructive dismissal shall not necessarily follow: see constructive dismissal for more information.

Members of Chambers are well placed to advise and act on behalf of both employees and employers in this area.

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