Deduction of Wages & Employee Rights

What an an Employee do if an Employer reduces salary ?

Employees have statutory and contractual rights pursuant to their employment contract with their employer.

Therefore, if an employer unilaterally decides one friday to reduce an employees wages, which is contrary to a provision of the contract in place between the parties, the employee has a legal right to challenge this contravention of the contract.

An employer cannot decide to amend the term of a contract without the consent of the employee.

An employer may argue that the variation of a term of contract was reasonable, but this shouldn’t wash.

The employee should be put on notice of the change of term, and the reasons for the change in a term of contract should be given at the least.

An employer is obligated to notify an employee of any term change of the contract.

Notification of Changes in the Contract

Section 5 of the Terms of Employment Act 1994 states the following :

5.— (1) Subject to subsection (2), whenever a change is made or occurs in any of the particulars of the statement furnished by an employer under section 34 or 6 , the employer shall notify the employee in writing of the nature and date of the change as soon as may be thereafter, but not later than—

a) 1 month after the change takes effect, or

b) where the change is consequent on the employee being required to work outside the State for a period of more than 1 month, the time of the employee’s departure.

There is also legislation regarding rules in respect of deduction of wages of employees without their knowledge or permission.

Regulations of Certain Deductions made

Section 5 of the Payment of Wages Act 1991 states the following:

An employer shall not make a deduction from the wages of an employee (or receive any payment from an employee) unless—

(a) the deduction (or payment) is required or authorised to be made by virtue of any statute or any instrument made under statute,

(b) the deduction (or payment) is required or authorised to be made by virtue of a term of the employee’s contract of employment included in the contract before, and in force at the time of, the deduction or payment, or

(c) in the case of a deduction, the employee has given his prior consent in writing to it.

Making a Complaint about a Deduction of Wages

A complaint can made by a complainant by submitting a completed complaint form to the Workplace Relations Commission.

The complaint form can be found on the Workplace Relation Commissions website.

For this complaint, one must complete Section B. of the complaint form. The date of deduction must be specified, the amount of deduction, whether there was notice of the deduction, the reason given for the deduction, and how much notice was given to the employee regarding the deduction.

The application form must be completed and submitted to the Workplace Relations Commission for claim registration. You should receive an automated response via email with an important reference number.

Time limits for Applications to the WRC

Strict time limits are in place for submitting an employment law related complaint to the Workplace Relations Commission. One must submit a claim within 6 months beginning on the date of the contravention to which the complaint relates.

Frequently Asked Questions

Can an employer change my contract and reduce my pay ?

Employers cannot deduct an employees wages unless this has been authorised by a legislative act, by a clause permitting same in the employee’s employment contract, or if the employee gives consent for the reduction.

Can my employer reduce my wages / salary in Ireland ?

This is answered above.

Disclaimer

Please be advised that the above-mentioned material is intended as an overview and as a broad out-line of the topic discussed. It should not be considered as complete and comprehensive legal advice, nor act as an appropriate substitute. Legal advice should be obtained from a solicitor prior to relying on anything in this article.

Due care has been taken in the publication of this article and we do not accept legal liability as a result of reliance on any material covered in the above article.