Key points

• It is unusual nowadays for an employer to dock an employee's wages or salary because of accidental damage to property or goods. In any event, an employer 's right to do so is strictly regulated by Part II (Protection of Wages) of the Employment Rights Act 1996. Save for deductions in respect of income tax (PAYE) and National Insurance contributions (and other exceptions), an employer does not have the legal right to deduct money from an employee's wages or salary (or demand any payment) without that employee's express consent. If an employer wishes to deduct monies (or demand a payment from an employee) for bad workmanship:

  • his (or her) right to do so and the reason for making that deduction must be clearly laid down in the employee's contract of employment (a copy of which must have previously been supplied to the employee before the incident that prompted the making of that deduction);

  • alternatively, the employee must have previously given his (or her) consent in writing to the making of such a deduction for the purposes for which it is to be made - which consent may not be given or have effect retrospectively.

  Even if an employee has given his (or her) written consent to the making of a deduction from his pay (or to accepting a demand for payment) in respect of damaged goods, the amount deducted (or payment demanded) should reflect the actual loss or damage suffered. However, there is nothing to prevent an employer disciplining or, indeed, dismissing an employee who wilfully or persistently causes damage to the employer's property or goods. Any monies outstanding on termination of employment in respect of damaged goods may be recovered in full from the wages or salary (and other contractual payments, including accrued holiday pay) due to the employee at that time.

• If an employer does not comply with these requirements, an employee has three months in which to complain to an employment tribunal. If the complaint is upheld, the employer will be ordered to reimburse the full disputed amount. Bearing in mind that an employee has no need to resign in order to assert his (or her) statutory rights before an employment tribunal, the law warns that an employer will be liable to pay heavy compensation if an employee is dismissed or selected for redundancy for questioning or challenging any alleged infringement of his rights under the 1996 Act or for pursuing the matter before an employment tribunal (ibid. section 104). This rule applies whether or not the employee is entitled to the disputed right and regardless of the outcome of the proceedings.