How can I claim back money that my employer owes me?
If your employer owes you money then there are 2 ways you can claim the money back:
- A claim for an Unlawful deduction of wages in an Employment Tribunal
- A Breach of contract claim in the Tribunal or County Court
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:
- 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
- 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
What is the time limit for bringing a claim for unlawful deduction of wages?
Your claim must be submitted to the Employment Tribunal within 3 months less one day of the date that the wages were due to be paid.
Who can issue a breach of contract claim and what is the time limit?
A breach of contract claim can be issued in the Employment Tribunal or the Civil Courts depending upon the employment status of the individual and the value of the claim.
You can bring a breach of contract claim in a Tribunal if you are an employee, your employment has terminated and you are owed money by your employer which you are entitled to under your contract of employment.
The claim must be issued within 3 months’ less one day of the date that your contract was terminated (e.g. if your contract terminated on 2 November 2009 your claim must be issued by 1 February 2010) and the Tribunal can only deal with claims that are worth less than £25,000.
If you are not an employee or you have missed the deadline for bringing a claim in the Tribunal then you can issue a claim in the Civil Courts. The claim must be issued within 6 years of the date that the breach of contract occurred (e.g. the date that the money was due to be paid to you).