Unlawful deductions- what is fair?

The coffee chain, Costa Coffee, has been in the limelight this week as some of their employees have complained about having money deducted from their final pay for training. 

Further, employees of the popular coffee chain have also come forward to say that they have had money deducted from their weekly wages to cover cash shortages from their tills and running costs.  

Costa have spoken out by confirming that they have deduction clauses in their contracts of employment. However, a number of employees have claimed that they have never been provided with a contract of employment. 

This sparks the questions as to what is considered a “fair” deduction and when does a contract of employment need to be provided to employees. 

When it comes to deductions, the law is quite clear; an employer is entitled to make a deduction from their employee’s wages, only if the employee has provided the employer with their written consent to do so or if there is a clause in the contract of employment to enable them to do so. There is also a responsibility to ensure that an employee’s pay does not fall below the National Minimum Wage, unless there is valid reason such as a repayment of a loan. 

With regards to employees contracts, as a minimum, employers are under an obligation to provide their employees with a Statement of Main Terms. This must be provided within 2 months of the employment commencing. A Statement of Main terms stipulates the terms that the employee is employed under and there are legal requirements that a statement must include. 

Contracts of employment are usually longer than a Statement of Main Terms as they tend to cover more than the legal requirements. The additional pieces of information that they may contain are clauses which restrict an employee from working for a competitor or setting up a competing business. 

If your company could benefit from having your employment contracts reviewed, get in touch! Our email address is hello@yourhrlawyer.co.uk or call us on 0115 870 0150.