Employee’s pay slip has to show reason for deduction
Case 3: The facts
Mr Ridge, worked as a software engineer for the Land Registry. He became unwell and had significant periods of absence, eventually exhausting his contractual sick pay entitlement. This meant that in some months, there were days which were unpaid due to sickness absence.
However, his employer’s administration department sometimes did not learn of or process the absence during the month when it occurred and when this happened, this led to an overpayment, which was then corrected on the next monthly payslip with a minus entry showing that the sum being reclaimed.
Ridge’s employer failed to record on the payslip the reason why the amount was reclaimed. Ridge brought a tribunal claim over the failure. He was initially unsuccessful, but he appealed to the Employment Appeal Tribunal (EAT).
The ruling
The EAT confirmed that when an employer reduces an employee’s wages or salary to recover an overpayment, this is a deduction from wages for the purposes of section 8 of the 1996 Employment Rights Act.
The employer is obliged to identify the deduction on the itemised payslip and state why it is being made. Ridge’s employer failed to do this and was therefore in breach of section 8.
Ridge v Her Majesty’s Land Registry UKEAT/0098/10/DM