Employer is going to keep my last months wages

[Gaw2410]

About a year ago I borrowed £2500 from my employer. I agreed to pay back £144 a month for 3 years. I never signed any agreement and it has never officially appeared on my pay slip but has always been taken out of my wage before it's paid in to my account (sometimes written in pencil on pay slip -£144). Unfortunately things turned a little sour at work and I had no other option to look for a new job. Thankfully I found one. When I handed my notice in it was a mixed reaction but when I said that I fully intended to pay back the loan at the agreed rate, my employer said that he would not do that and would take the remaining balance ( around £1500) out of my last wage. This would leave me with about £250. I have 3 young children, very little savings and it's the month before Christmas.
Can anyone tell me whether he is legally able to do this. I have guessed that it's some kind of tax dodge for him, lending kind of under the table. Any help would be greatly appreciated.

[des8]

Re: Employer is going to keep my last months wages

The short answer is "No, he may not make this deduction"
here's a link to ACAS :http://www.acas.org.uk/index.aspx?articleid=4122

If he persists in making the deduction you could take action via an employment tribunal, or even in the county court.
The problem is that neither route is particularly speedy, and in the meantime you are without cash.
I suspect you will have to show him he is acting illegally, by reference to the ACAS site, and convince him he will be in court at great expense to himself if e doesn't act in a fair and proper manner.
You have an agreement, albeit unwritten, which you can demonstrate exists by the deductions made from your wages.
He is not only breaking that agreement. but also acting unlawfully by making unlawful deductions from your wages

[vengence872]

Re: Employer is going to keep my last months wages

Can i suggest that the employer can deduct any deficit out of any final pay packet as that is a common contractual term.

The only time deductions can be made is if either a statutory measure such as a liability order, or contratual such as training/ HGV Licence, Etc.

If the employer can show that £2500 went from their bank account into yours, and you have been paying back direct to the company £144 a month, an implied contractual provision under custom and practice has been shown

To be honest this is just my own opinion as i do not know for sure. In your position i would send the boss a letter saying the deduction is unlawful under Section 13 Employment Rights Act 1996 and that you are considering a claim to the Employment Tribunal Service for redress

[teaboy2]

Re: Employer is going to keep my last months wages

Can i suggest that the employer can deduct any deficit out of any final pay packet as that is a common contractual term.

The only time deductions can be made is if either a statutory measure such as a liability order, or contratual such as training/ HGV Licence,

If the employer can show that £2500 went from their bank account into yours, and you have been paying back direct to the company £144 a month, an implied contractual provision under custom and practice has been shown

To be honest this is just my own opinion as i do not know for sure. In your position i would send the boss a letter saying the deduction is unlawful under Section 13 Employment Rights Act 1996 and that you are considering a claim to the Employment Tribunal Service for redress

Not entirely correct, as various deductions can be made if excepted under section 14 of the employment rights act 1996. This issue falls under section 14 (ss 4):

Section 13 does not apply to a deduction from a worker’s wages made by his employer in pursuance of any arrangements which have been established—

(a)in accordance with a relevant provision of his contract to the inclusion of which in the contract the worker has signified his agreement or consent in writing, or

(b)otherwise with the prior agreement or consent of the worker signified in writing,

Also if such loans from employer is not covered by the contract of employment, it is seen as an Private loan to an individual, much like between 1 friend to another friend! So would form a separate contract, which can be either verbal or written. Though that does not give the employer the right to deduct from the persons wages.

The fact the deductions were not shown on the wage slips, leads me to question integrity of the employer, as such loaned monies advances and related repayment deductions should appear the wage slips for accounting purposes and evidential purposes. SO if their was no signed written agreement for the loand or written confirmation and agreed repayment schedule signed, or any other evidence of the loan being paid to the OP that is signed by OP, then the employer can not make any deductions!