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Ex-Employer withholding holiday pay

  • 29-06-2015 9:34pm
    #1
    dylanelliott
    Registered Users Posts: 3 ✭


    Hi all, I'd love to hear some opinions about this issue that my partner is currently caught up in - sorry it's a bit long-winded!!


    His ex-boss sent him an email saying that he is seeking compensation from him for a mistake he made while at work that has cost the company money. Basically he overlooked a missing piece of paperwork for a part that he bought and it led to it being unusable for the project they were working on.
    He will admit he made the mistake, and as soon as he realised he contacted the supplier to ask for a refund - but this didn't work out. All in he reckons the company lost about $2000 max because they had to buy and ship a new part to replace this one (they still own the original part which is fine but just needs that paperwork)

    Basically the boss is claiming negligence & breach of duty of care for this mistake and is withholding holiday pay (in the amount of about €200 )that was due to my partner while he figures out how much compensation he wants in total. the boss advised him that an official claim would follow

    This has gone on over a month now with no official claim or solicitors letter sent to my partner, just withholding of the money due.

    My opinion would be that a company can't hold an (ex)employee personally financially liable for an honest mistake that they made during the course of their work. I would think that companies would be indemnified for losses that their employees incur. There is no claim from the boss that this mistake was malicious, just that it was negligent.

    I would have thought that the procedure for dealing with negligent employees would at the maximum be the termination of their contract & since my partners contract is already terminated there should be no further action needed.

    As far as I can figure, a company can't withhold your wages unless it is provided for within your contract- Would you consider this to be an implied provision to withhold wages:

    Article 14.12 “Employee shall, at all times, observe and comply with the Company’s ‘Sign-off Authorisation’ rules and structures, as amended from time to time, relating to work in which he is involved. Employee warrants, furthermore, that he shall not place the Company into a situation of financial or legal liability, debt, negligence or otherwise, outside of his remit and appropriate approval.”


    Thanks to anyone who bothers to read this and gives their opinion. My parter has applied for legal aid in regards to this but as you know that takes ages and we'd like to at least have an idea if his boss has a legitimate case here or not.


Comments

  • #2
    Peregrinus
    Registered Users Posts: 26,050 ✭✭✭✭Peregrinus


    An employer is limited in the deductions he can make from an employees pay: Payment of Wages Act 1991 s. 5.

    Cutting to the chase, by s. 5(2)(b)(i) the employer can't make a deduction in respect of "an act or omission of the employee" unless the deduction is authorised "by virtue of a term (whether express or implied and, if express, whether oral or in writing) of the contract of employment".

    This requires consideration of the entire contract of employment, and of the discussions surrounding it, not just of a phrase plucked out of it. For what it's worth, the phrase you have quoted sets out the employee's duty to comply with certain purchasing procedures. It does not say that if he fails to do so and loss results this can be withheld from his wages. But it may be that something else in the contract, expressly or by implication, says this. You have to read the contract as a whole.

    Couple of other points:

    Under s. 5(2)(b)(iii), before making any deduction the employer is supposed to give the employee a copy of the contract term authorising this (if it is in writing) or (if it's not in writing) to give him notice of the existence and effect of the term. It doesn't sound as though the employer has done this.

    Under s.5(2)(b)(iv), at least a week before making the deduction the employer has to give "particulars in writing of . . . the amount of the deduction". If the employer hasn't yet quantified the amount he is claiming, I doubt that he has complied with this requirement.

    Finally, you don't say when your partner made the mistake. But under s. 5(2)(b)(vii) any deductions have to start within six months of the mistake became known to the employer. It could be that the employer is too late to start deductions.

    It doesn't sound, from what you say, that the employer is aware of its obligations under the Payment of Wages Act, so I'd say there's a good chance that your partners will succeed in stopping this. The key issue is going to be whether there is anything in the contract of employment which, expressly or by implication, authorises the employer to make deductions from wages to recover losses suffered due to acts or omissions of employees.


  • #3
    dylanelliott
    Registered Users Posts: 3 ✭dylanelliott


    Thanks for the reply Peregrinus, I don't have his contract to hand but most definitely will be reading through it in full a.s.a.p.

    The mistake was only about 2 months ago so its within the time allowed.


  • #4
    MudSkipper
    Registered Users Posts: 556 ✭✭✭MudSkipper


    I was in a similar situation a couple of months ago, where my then employer decided to not pay me my last paycheck and instead claimed I owed them training costs.

    Lodged a case on workplacerelations.ie, which is a part of the labour relations committee. They offered the early resolution service to me and within weeks the employer settled to pay 80% of what they owed and dropped their own claim.


  • #5
    dylanelliott
    Registered Users Posts: 3 ✭dylanelliott


    Thanks mudskipper that is good to know, will be having a look into that site you mentioned for sure :)


  • #6
    vector
    Registered Users Posts: 1,756 ✭✭✭vector


    MudSkipper wrote: »
    I was in a similar situation a couple of months ago, where my then employer decided to not pay me my last paycheck and instead claimed I owed them training costs.

    Lodged a case on workplacerelations.ie, which is a part of the labour relations committee. They offered the early resolution service to me and within weeks the employer settled to pay 80% of what they owed and dropped their own claim.

    That's a good result (although pity it wasn't 100%), I've been there before... FYI The employer has to consent to the early resolution service, many don't


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