4 DEDUCTIONS FROM WAGES AND PAYMENTS TO
EMPLOYER - section 5
Valid deductions (and payments to the employer) from wages -
section 5(1)
4.1 The Act allows an employer to make the following deductions (or
receive the following payments) from the wages of an employee:
— any deduction (or payment) required or authorised by law (e.g.
PAYE or PRSI),
— any deduction (or payment required or authorised by a term of the
employee’s contract (e.g. some occupational pensions scheme
contributions or particular till shortages), or
— any deduction agreed to in writing in advance by the employee
(e.g. trade union subscriptions or VHI premia).
Restrictions on certain deductions (or payments) - section 5(2)
4.2 Special restrictions are placed on employers in relation to
deductions (or the receipt of payments) from wages which:
(a) arise from any act or omission of the employee (e.g. till shortages, bad
workmanship, breakages) or
(b) are in respect of the supply to the employee by the employer of goods
or services which are necessary to the employment (e.g. the provision
or cleaning of uniforms).
Any deduction (or payment) from wages of the kinds described at (a) or
(b) must satisfy the following conditions:
(i) the deduction (or payment to the employer) must be provided for in the
contract of employment in a term whether express or implied and, if
express, whether oral or in writing,
(ii) the amount of the deduction (or payment to the employer) from wages
must be fair and reasonable having regard to all the circumstances
including the amount of the wages of the employee,
(iii) the employee must be given at some time prior to the act or omission
or the provision of the goods or services, written details of the terms in
the contract of employment governing the deduction (or payment to
the employer) from wages. When a written contract exists, a copy of
the term of the contract which provides for the deduction (or payment)
must be given to the employee. In any other case, the employee must
be given written notice of the existence and effect of the term.
Additional restrictions on deductions (or payments) for acts or
omissions of the employee - section 5(2)
4.3 Any deduction (or payment to the employer) arising from any act or
omission of an employee, in addition to meeting the requirements set out
at (i) to (iii) of paragraph 4.2, must satisfy the following conditions:
(iv) the employee must be given particulars in writing of the act or omission
and the amount of the deduction (or payment) at least one week before
the deduction (or payment) is made,
(v) the deduction (or payment), must be made no later than 6 months after
the act or omission became known to the employer. However, if a
series of deductions (or payments) are to be made in respect of a
particular act or omission, the first deduction (or payment) in the series
must be made within the 6 month period.
Additional restrictions on deductions (or payments) for loss or
damage - section 5(2)
4.4 Where an employer makes a deduction from wages (or receives a
payment from the employee) to compensate for loss or damage arising
from any act or omission of the employee, the deduction must comply with
the conditions set down at (i) to (v) of paragraphs, 4.2 and 4.3. In addition,
the deduction (or payment):
(vi) must be of an amount not exceeding the loss or damage sustained by
the employer,
A disciplinary fine, where provision for such is made in the contract, may
be deducted as well as a deduction for loss or damages. Any such fine
would, of course, be subject to the conditions set down at (i) to (v) in
paragraphs 4.2 and 4.3.
