The case of a Complainant v a Respondent looked at a number of issues around deductions made from final salary and whether these were lawful.

The complainant (employee)  argued that when he finished employment with his employer, over €3,000 was deducted from him unlawfully. He stated that €2350 related to 3rd level fees that they paid on his behalf, €566.64 was in respect of commission, and €160 in respect of benefit in kind. The complainant submitted that these amounts were not authorised by him at any stage and that he received no notice of any deductions from his salary.

In respect of course fees, the complainant stated that although his employer had paid the course fee for him, it was not entitled to recoup the amount as he was only finished the first year of a two-year course. In relation to the €566.64 commission, he said that this was not recouped in an appropriate fashion and in relation to the benefit in kind of €160, this was only recouped as he gave his car back two weeks before his notice period expired.

The respondent employer stated that he tried to meet with the complainant to discuss the issues and that the employee was aware of the course deductions should he leave his job within one year of finishing the course. In respect of the commission payment, the employer said this was an overpayment and it was entitled to deduct this.

The Law

The Workplace Relations Commission looked at Section 5 of the Payment of Wages Act 1991 in respect of unlawful deductions

Section 5(1) (b) and (c) of the Act regulates certain deductions and payments received by employers. These sections state

An employer shall not make a deduction from the wages of an employee (or receive any payment from an employee) unless—

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.

Section 5 (2) states that:

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

(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

(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…

Conclusion

The Adjudicator found however that “…..arising from the imprecise nature of the wording contained in the refund of fees document, I find that that respondent was not entitled to recoup the fees it paid for the complainant’s 3rd level course”. This is a timely reminder to employers to ensure that the wording in a contract of employment or otherwise is drafted properly to ensure that any deduction can be properly and lawfully made.

It found that the commission was overpaid and the employer was entitled to deduct it and it had no jurisdiction to the hear the issue around benefit in kind as this was a revenue matter.