Wage disputes

Occasionally your employer may fail to pay money that is owed to you. This could include unlawful deductions to your wages or the failure to pay holiday pay or bonuses. There is a three month less one day time limit in which to make a claim for a wage dispute and so it is key that you act as quickly as possible.

If you believe that you have grounds for a claim against your employer for their failure to pay money owed to you, speak to a member of our specialist employment law team on 0203 816 9302 who will discuss the options available to you and advise you on the best route to take to resolve the dispute as quickly as possible.

loading staff

What is an unlawful deduction of wages?

Employees and anyone who personally provides work or services to another under a contract, provided the person is not a client or customer, has the right not to have unauthorised deductions taken from their wages.

The following list contains examples of the most common types of payments that are classed as “wages” and can therefore be claimed in the tribunal:

  • Salary
  • Commission and bonuses
  • Holiday pay
  • Statutory sick pay
  • Statutory maternity, paternity and adoption pay
  • Notice pay (provided the employee is required to work during the notice period or is treated as doing so)

The following list contains examples of payments that are not classed as “wages” and therefore must be claimed by issuing a claim for breach of contract:

  • Loans and advances of wages
  • Pensions, allowances or gratuities in connection with retirement
  • Expenses
  • Redundancy payments
  • Benefits in kind (gym membership, private health care, life assurance)

Are there any circumstances when my employer can make deductions to my pay?

An employer can only deduct wages from an employee if:

  • If it is authorised by statute (e.g. tax, national insurance, court orders for maintenance payments and fines)
  • If it is authorised by the contract (there is no requirement that the term has to be in writing but the employer should notify the employee in writing about the existence of the term before making a deduction)
  • If the employee has previously agreed in writing to the deduction being made
9.1 out of 10
Trustpilot logo5-stars on trustpilot Based on count 458

We're Great

It is our business to deliver legal services that work for our clients, and you can trust our specialists to take care of things on your behalf.

Our Trustpilot reviews

For someone like myself who has never been through such an experience, they were extremely patient in explaining the process and consequences.
View from an employment law & discrimination client

Failure to pay holiday pay

All workers are entitled to 5.6 weeks’ worth of leave per year and the amount of statutory annual leave that you are entitled to is determined by the number of days you work per week. For example, if you only work one day per week you will be entitled to take 5.6 days of annual leave over the year. It is at your employer’s discretion whether they include bank holidays as part of your entitlement or if they award you more annual leave than they are legally obliged to.

Holiday pay should be paid at the same amount that you are paid when you are not on holiday. For example, if you are paid £300 per week and you take a one week holiday you should still be paid £300 for that week. If you work irregular hours the amount you will be paid will be based on the mean average amount that you earned in the 12 weeks leading up to your period of leave.

If you are self-employed you won’t be entitled to statutory holiday pay. In some situations you may be told that you are self-employed when that is not the case. You can use the government’s website to determine your employment status and find out more about your employment rights.

Making a claim for an unpaid bonus

Bonuses are usually dependent on performance and paid at the discretion of your employer. However, they are sometimes contractual and your entitlement to a bonus should be clearly written into your contract of employment if this is the case. If it is not written into your contract but a bonus has previously been paid on the basis of custom and practice you may still be able to make a claim for non-payment.

To make a claim for an unlawful deduction from wages you must make a claim for a specific amount of money. If you do not know the exact amount that you should have been paid your claim will not be classed as unlawful deduction and you will need to make a claim for a breach of contract instead.

Resolving a wage dispute

The first step in trying to resolve a dispute with your employer over their failure to pay money owed to you should be by speaking to them directly. Explain to them that you are aware of your rights as an employee and why you believe that you have not been paid the correct amount. 

If you are unable to resolve the issue by talking to your employer about the issue then you should raise a grievance by following your workplace’s grievance process. Include copies of evidence of the failure to be paid correctly such as your contract, and evidence of the payment of bonuses in the past if claiming for the failure to be paid a bonus. If this also doesn’t work to resolve the dispute you should then consider taking your employer to a tribunal. Before you start with the employment tribunal process you will need to contact ACAS who will also see if your dispute can be resolved without need for tribunal through early conciliation.

Employment tribunals should be used as a last resort and it is important that you are aware of the how stressful and costly they can become. To speak to a member of our employment law team call us on 0203 816 9302. Our employment law specialists can advise you on the best route to take to resolve the dispute as quickly as possible and recover the money that you are owed.

New year resolutions for employers

Employers looking for a new year’s resolution could do worse than adopting some of the suggestions below, all of which will help risk-proof your business should the worst happen. Review your contracts and policies to make sure they are up to date ...

Read more

Twitter block 1 tweet

SolicitorsLLP

Stephensons' employment team shortlisted for top legal award

The employment  department at the national law firm, Stephensons, has been shortlisted in the ‘Team of the Year – Employment’ category at the prestigious Manchester Legal Awards 2019. The Manchester Legal Awards recognise and...

Read more

Employment for you reorder

  • Philip Richardson
  • Martha McKinley
  • Adam Pennington
  • Stephen Woodhouse
  • Eleanor Adshead
  • Maria Chadwick

We're always here for you

As an award-winning top 150 law firm, with over 450 staff based in offices across the country, you're never far from the advice you need.

Find your nearest Stephensons office and arrange a meeting

As an award-winning top 150 law firm, with over 450 staff based in offices across the country, you're never far from the advice you need.