Pay

Pay is the probably the most important term of the employment contract so far as an employee is concerned and there are a number of legal provisions that protect the pay of employees.

 

Contractual rights

The right to pay stems from the contractual agreement between the employer and the employee.  An employee is entitled to the rate of pay that has been agreed so long as he does, or is willing to, work. 

 

The contract of employment should set out the rate of pay and any enhancements for particular situations e.g. overtime rates.  If there is no written contract the pay the employee has previously received would be evidence of the agreement or if that is in dispute then evidence of what was actually verbally agreed would need to be obtained.

 

The employee can generally only legally enforce the contractual right to pay that exists - so if there is no agreement to pay a higher rate for overtime it cannot be claimed.

 

Although there is no right to a written contract there are statutory rights to receive itemised pay slips and a statement of terms and conditions of employment.

 

Right to receive itemised pay slips

 

Right to receive a statement of terms and conditions

 

A failure to pay wages that are due will be a breach of contract.  This can be enforced as a claim for unauthorised deduction of wages in the Employment Tribunal; a claim for breach of contract can also be made although this has some complications.

 

A serious breach of contract could give rise to a constructive dismissal but this too will need further consideration.  See:

 

Breach of employment contracts

 

Constructive dismissal

 

National Minimum Wage (NMW)

The law also imposes an obligation on employers to pay a minimim wage which overrides anything that has been agreed with the worker. 

 

From 1 October 2014 the NMW is £6.50 per hour for workers aged 21 and over.

 

NMW rates vary for other age groups.

 

More information on the National Minimum Wage

Unauthorised deductions of wages

Where a worker can show a contractual right to pay a further right exists to claim that an unauthorised deduction has been made from that pay.

 

Deductions can be made where

  • the employer has legal authority to do so (e.g. for tax and national insurance)
  • where the employee has consented (e.g. to repay a loan)
  • where the deduction is to correct an overpayment of wages

 

More information on recovering deductions from wages

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Zero increases by 26%

The Office for National Statistics has released new figures that show nearly 700,000 people work on zero hours contracts - up 26% from last year.  The problems caused by these contracts will require a significant change in the law.

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