Part II of the Employment Rights Act 1996
governs unauthorised deductions from wages and has evolved (as a result of case law) to include complete non-payment of wages or salary.
Unlawful deductions from wages provisions cover
'workers', including employees and apprentices. Also included are
people working under a contract and providing work or services
personally to someone who is not a customer or client of the
worker's profession or business. The provisions do not cover the
Lawful deductions include income tax and NICs,
any deductionsauthorised by the worker's contract and those
deductionsagreed in writing by the worker before the deductions are
Workers in the retail sector have additional
protection against unlawful deductions and special rules apply to
any deductions made in relation to 'cash shortages or stock
Complaints regarding unlawful deductions from
wages must normally be made to an employment tribunal within three
months of the deduction.
Overpayments resulting from a 'mistake of fact',
such as a computing error, can potentially be recovered, although
any repayment by the employee from his or her wages must comply
with the provisions that govern unlawful deductions.
Overpayments resulting from a 'mistake of law',
such as misinterpreting legislation, are irrecoverable.