Employers take note of Section 5(1) of the Payment of Wages Act 1991 (as amended) which provides that a deduction from salary can only be made in three instances:
(a) the deduction (or payment) is required or authorised to be made by law e.g. tax/PRSI etc.
(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.
Where a deduction is made which does not fall within one of the above grounds, an employee can make a complaint to the Workplace Relations Commission.
In a recent case issued in January 2022, Jennifer Healy v XS Direct Insurance Brokers Limited ADJ-00030361, the defendant insurance company was ordered to repay the complainant employee over six thousand euro in respect of salary and bonus which the employee had not consented to. Whist the Workplace Relations Commission noted that the company was in financial difficulty and had to subsequently make redundancies, it nonetheless noted that the employee had not consented to the deduction in writing.
Employment Law Learning
Employers should always obtain an employee’s consent in writing to any changes to a contract of employment or any changes they wish to make including making any deduction from salary.