Deductions from pay - Employee/ Employers rights

Nensi

Hello everyone, I am new here and this is my first topic on "Boards.ie" forum. I hope that together we will be able to find answers to my queries. I'll get straight to the point.
I am trying to interpret some points of "Payment of Wages Act, 1991" and I am not 100% sure if I am doing it right.
I want to ask You guys about deductions from wages. Section 5(2)(iv) of the Payment of Wages Act, 1991 says that employer isn’t allowed to make deductions unless: (I quote Section 5(2)(iv)) :

- "in case the deduction is in respect of an act or omission of the employee, the employee has been furnished, at least one week before the making of the deduction, with particulars in writing of the act or omission and the amount of the deduction."
And now my questions are:

1. If I don't receive a written notice of a deduction at least one week in advance will my employer be allowed to make deductions from my wages anyway?
2. Do I have to sign the notification if I receive?
3. How can my employer prove that he delivered a notice of deduction to me? How should my employer do that effectively?

I will be thankful for any answers.

Peregrinus

Note that this only applies to deductions "in respect of an act or omission of the employee".

My answers to your questions:

Nensi wrote: »

1. If I don't receive a written notice of a deduction at least one week in advance will my employer be allowed to make deductions from my wages anyway?

If he makes the deduction, he's in breach of the Act. (Unless he is covered by an exemption under s. 5(5), discussed below.)

Nensi wrote: »

2. Do I have to sign the notification if I receive?

The Act does not require the notification to be signed in order to be effective. Nor does it oblige the employee to sign it, if the employer asks him to.

However, if your employer asks you to sign an acknowledgement confirming that you have received the notification and you refuse, the employer could probably treat that as a disciplinary matter.

Nensi wrote: »

3. How can my employer prove that he delivered a notice of deduction to me? How should my employer do that effectively?

Same way you would prove the delivery of any document; testimony from the person who gave it to you. Or, as you have already suggested yourself, he could head off the problem by asking you to sign an acknowledgement of receipt. Or, if he gives you the notice by electronic means, he may have a record of delivery. (Electronic Commerce Act 2000 deals with the circumstances in which a statutory obligation to give information "in writing" can be satisfied by giving it in electronic form.)

Note that there are various other conditions in s.5(2) beyond the one you quote, and of course the employer has to satisfy them too if the deduction is to be lawful.

But note also s.5(5) which lists a number of exceptions - deductions which can be made without complying with the conditions of s.5(2). Obviously, if the deduction in your case is one of the exceptions listed in s.5(5), then the employer doesn't have to give you the week's written notice.

Nensi

Thank You for the comprehensive explanation. I am confused about a provision in my contract of employment that says :

" The company shall be entitled to deduct from your remuneration any monies owed by you including, but not limited to any outstanding loans, advanced, the cost of repairing or any damage or loss of the company's or their client's property caused by you and any excess holiday pay"

This means that I gave a written consent for the deduction in case of any damage or loss of my company.

Section 5(5)(d) says that :

Nothing in this section applies to—

"a deduction made by an employer from the wages of an employee in pursuance of any arrangements—

(i) which are in accordance with a term of a contract made between the employer and the employee to whose inclusion in the contract the employee has given his prior consent in writing, or

(ii) to which the employee has otherwise given his prior consent in writing,
and under which the employer deducts and pays to a third person amounts, being amounts in relation to which he has received a notice in writing from that person stating that they are amounts due to him from the employee, if the deduction is made in accordance with the notice and the amount thereof is paid to the third person not later than the date on which it is required by the notice to be so paid"

Does it mean that my employer doesn't have to give me the week's written notice or just my interpretation is wrong?

Peregrinus

The section 5(5)(d) exemption only applies in relation to deductions which your employer will pay to a third person - e.g. if there is an arrangement by which your union dues or professional subscriptions or whatever are paid by your employer and recovered from your salary. It wouldn't be relevant to deductions which the employer is going to keep for itself.

The term in your contract is, I think, intended to satisfy one of the conditions of s. 5(2). S. 5(2) authorises deductions if several conditions are satisfied, condition (i) being "the deduction is required or authorised to be made by virtue of a term . . . of the contract of employment made between the employer and the employee". So, they've got that covered. But they also have to satisfy the other conditions and, if the deduction is in respect of some "act or omission" of yours, condition (iv) requires them to give you, a week in advance, written particulars of the act or omission, and of the amount they are going to deduct.

Calahonda52

OP, It might be easier if you have a specific example in mind.
It would also be better to post the entire section 5 as it really does not lend itself to cutting and pasting sections,especially when one reads 5.5.

http://www.irishstatutebook.ie/eli/1991/act/25/section/5/enacted/en/html#sec5
eg:
5.—(1) An employer shall not make a deduction from the wages of an employee (or receive any payment from an employee) unless—

(a) the deduction (or payment) is required or authorised to be made by virtue of any statute or any instrument made under statute,

(b) the deduction (or payment) is required or authorised to be made by virtue of a term of the employee's contract of employment included in the contract before, and in force at the time of, the deduction or payment, or

(c) in the case of a deduction, the employee has given his prior consent in writing to it.

(2) An employer shall not make a deduction from the wages of an employee in respect of—

(a) any act or omission of the employee, or

(b) any goods or services supplied to or provided for the employee by the employer the supply or provision of which is necessary to the employment,

unless—

(i) the deduction is required or authorised to be made by virtue of a term (whether express or implied and, if express, whether oral or in writing) of the contract of employment made between the employer and the employee, and

(ii) the deduction is of an amount that is fair and reasonable having regard to all the circumstances (including the amount of the wages of the employee), and

(iii) before the time of the act or omission or the provision of the goods or services, the employee has been furnished with—

(I) in case the term referred to in subparagraph (i) is in writing, a copy thereof,

(II) in any other case, notice in writing of the existence and effect of the term,

and

(iv) in case the deduction is in respect of an act or omission of the employee, the employee has been furnished, at least one week before the making of the deduction, with particulars in writing of the act or omission and the amount of the deduction, and

(v) in case the deduction is in respect of compensation for loss or damage sustained by the employer as a result of an act or omission of the employee, the deduction is of an amount not exceeding the amount of the loss or the cost of the damage, and

(vi) in case the deduction is in respect of goods or services supplied or provided as aforesaid, the deduction is ofan amount not exceeding the cost to the employer of the goods or services, and

(vii) the deduction or, if the total amount payable to the employer by the employee in respect of the act or omission or the goods or services is to be so paid by means of more than one deduction from the wages of the employee, the first such deduction is made not later than 6 months after the act or omission becomes known to the employer or, as the case may be, after the provision of the goods or services.

(3) (a) An employer shall not receive a payment from an employee in respect of a matter referred to in subsection (2) unless, if the payment were a deduction, it would comply with that subsection.

(b) Where an employer receives a payment in accordance with paragraph (a) he shall forthwith give a receipt for the payment to the employee.

(4) A term of a contract of employment or other agreement whereby goods or services are supplied to or provided for an employee by an employer in consideration of the making of a deduction by the employer from the wages of the employee or the making of a payment to the employer by the employee shall not be enforceable by the employer unless the supply or provision and the deduction or payment complies with subsection (2).

(5) Nothing in this section applies to—

(a) a deduction made by an employer from the wages of an employee, or any payment received from an employee by an employer, where—

(i) the purpose of the deduction or payment is the reimbursement of the employer in respect of—

(I) any overpayment of wages, or

(II) any overpayment in respect of expenses incurred by the employee in carrying out his employment,

made (for any reason) by the employer to the employee, and

(ii) the amount of the deduction or payment does not exceed the amount of the overpayment,

or

(b) a deduction made by an employer from the wages of an employee, or any payment received from an employee by an employer, in consequence of any disciplinary proceedings if those proceedings were held by virtue of a statutory provision, or

(c) a deduction made by an employer from the wages of an employee in pursuance of a requirement imposed on the employer by virtue of any statutory provision to deduct and pay to a public authority, being a Minister of the Government, the Revenue Commissioners or a local authority for the purposes of the Local Government Act, 1941 , amounts determined by that authority as being due to it from the employee, if the deduction is made in accordance with the relevant determination of that authority, or

(d) a deduction made by an employer from the wages of an employee in pursuance of any arrangements—

(i) which are in accordance with a term of a contract made between the employer and the employee to whose inclusion in the contract the employee has given his prior consent in writing, or

(ii) to which the employee has otherwise given his prior consent in writing,

and under which the employer deducts and pays to a third person amounts, being amounts in relation to which he has received a notice in writing from that person stating that they are amounts due to him from the employee, if the deduction is made in accordance with the notice and the amount thereof is paid to the third person not later than the date on which it is required by the notice to be so paid, or

(e) a deduction made by an employer from the wages of an employee, or any payment received from an employee by his employer, where the employee has taken part in a strike or other industrial action and the deduction is made or the payment has been required by the employer on account of the employee's having taken part in that strike or other industrial action, or

(f) a deduction made by an employer from the wages of an employee with his prior consent in writing, or any payment received from an employee by an employer, where the purpose of the deduction or payment is the satisfaction (whether wholly or in part) of an order of a court or tribunal requiring the payment of any amount by the employee to the employer, or

(g) a deduction made by an employer from the wages of an employee where the purpose of the deduction is the satisfaction (whether wholly or in part) of an order of a court or tribunal requiring the payment of any amount by the employer to the court or tribunal or a third party out of the wages of the employee.

Nensi

Gentlemen, thank you for help.
The only thing that is worrying me is that my employer gave me a document which is supposed to be a week's written notice but I am not sure if it's legal. My employer said that I must sign the document.
Here is how the document looks like:

"EXCESS AGREEMENT

CLAIM REFERENCE : ......

I "Name Surname" confirm that I agree to pay an excess of 1200 euro at fortnightly rate of 100 euro for claim ............... due to incident caused by negligence. I accept that the payment of this excess will be full and final settlement between myself and "name of the company" in respect of this claim.

Employee signature
Date

Company's representative signature"

I am wondering if I can consider above document as a written notice from employer. Do I have to sign it? What do You think?