How liable are employers for the consequences of not paying you on time?

[5char]

Hi,

My problem is quite specific and I have been unable to find any relevant case law or advice, so I thought I'd try here.
I will try to be as concise as possible, but please anybody do feel free to ask me for further info if it would be relevant.

My employer operates a share incentive scheme, whereby employees can contribute on a monthly basis and the end result is some shares at a good price and some free ones too.
Employees can specify how much they wish to contribute, but this is capped at 10% of your income.

In one month my employer made an error on my payslip and did not pay me for some overtime I had worked.
This mistake meant that my income for the month was low enough that my contribution could not be taken, as it would have been more than 10% of my earnings.

I have now received the outstanding money, but they are saying it is too late to back-date or retrospectively amend the share plan contribution.
As such I have been advised there is 'nothing they can do' to stop me losing out on what is potentially a significant value in shares, even though the sole reason I would lose out is because or their error in failing to pay me what was due correctly or on time.

Could anybody suggest my best course of action? At present the best I can think is to withdraw and sell the shares in 3 years time, at which point I could demonstrate a measurable financial loss, however I would be interested to hear any opinions regarding that or any better way?

Kind regards,

5char

[teaboy2]

Re: How liable are employers for the consequences of not paying you on time?

Under contractual law, they are liable for any losses you incur as a result of a breach of contract committed by them. By not paying you your full wage, they breached your contract of employment, as its clear in the contract as to what you will be paid per hour and what you will be paid per over time hour you work, its also clear as to when you will be paid too. Not only that paying you less than you were entitled to be paid is a breach of section 13 of the employment rights act 1996.

Therefore based on contractual law, they should reimburse you for any financial detriment or losses you will incur as a result of their breach of contract, regardless as to whether it was accidentally error or not. Because at the end of the day, why should you loose out on what you would have otherwise been entitled too, as a direct result of their error which amounted to a breach of your contract and a breach of section 13 of the employment rights act 1996. Yes they may say they have remedied the breach, which is true. However they have not compensated you for your financial detriment or loss you have incurred as a result, therefore the breach has not been remedied and they are technically still in breach of contract!

For example: If an employer was late paying an employees wage by 1 day, and the employee had direct debits declined or missed rent payments, then any charges the employee incurs as a result, the employer is liable for!

Write a formal grievance letter to them pointing out the above, and making clear that should they not reimburse you for your loss you will take civil court action (civil courts are cheaper than tribunal and deal with issues of debts and contractual damages).

Work out how much you stand to loose as a result of this and include the final figure in your grievance letter.

[5char]

Re: How liable are employers for the consequences of not paying you on time?

Hi Teaboy,

Thanks for your reply. My issue is that now they have rectified the non-payment, all I am now owed is shares in the company rather than money.
This makes working out how much I stand to lose practically impossible, as during the 3 year qualifying period before you can sell the shares and collect your gains, the share price could go up or down.

As far as I am aware, civil courts require a measurable financial loss, which for the next 3 years I am not going to have, only speculations as to what the loss could be based on the current share price.

Should a formal grievance not be fruitful (which I don't think it will be, although I definitely will try), could anybody suggest a course of action that would not involve waiting for 3 years?

Thanks again to anybody taking the time to read this.

5char

[teaboy2]

Re: How liable are employers for the consequences of not paying you on time?

The current value of the shares at the time they paid you wrong, or the value as they stand now, if you don't know what the value was at the time. That is the measurable loss, plus you can always ask the court to order, that should the have increased at the end of the 3 year qualifying the period the company also pays you the difference!