One of the more underused provisions of the Employment Rights Act 1996 is found in section 8. I have discussed some aspects of this claim before in a previous post. Section 8 of the Employment Rights Act imposes an obligation upon an employer to provide an employee (and, since 2019, a worker too) with a payslip at the time they are paid, or before that date. Although sometime claimed together the right under section 8 is entirely distinct from the right not to have unlawful deductions of wages under section 13 (a right much more widely understood).
The right in section 8 therefore has certain requirements, and a failure of any of these means the employer has breached the worker’s section 8 rights:
- The employer must give the payslip to the worker (this is what the previous post I linked to discussed)
- The payslip must be given at the same time or before every payment is made
- The payslip must itemise each of the following information:
- The gross amount of the wage/salary (that is total amount before tax/NI etc)
- The amount of any deductions from that gross salary (student loan deductions, pension, tax etc)
- If payment is by varying means (e.g., part cheque, part bank deposit) then the amount and method of each component
- If the salary depends on hours worked, the hours worked and, if varying, the salary per hour.
If an employer does not give a payslip at all, or if it fails to meet any of the requirements of the above list will have infringed the workers right under section 8 of the Employment Rights Act. The limit to make a complaint to the employment tribunal (called a reference in this instance) is the normal three months less one day if the employment has stopped. Somewhat strangely, if the employee is still employed by the employer at the time the application for a reference is made, then the time limit does not apply – section 12(4). As with most claims there is a requirement to obtain an ACAS early conciliation certificate before commencing a claim.
However, unlike most claims there is a positive incentive for an employee not to engage with the early conciliation beyond obtaining a certificate. The reason for this is found in section 12 of the Employment Rights Act. Any person who succeeds in a complaint will obtain a declaration from the employment tribunal that their section 8 rights were infringed and a finding from the tribunal as to what the relevant particulars should have been – section 12(1) and 12(3). However, the real sting of the right is to be found in section 12(4), emphasis is added:
Where on a reference in the case of which subsection (3) applies the tribunal further finds that any unnotified deductions have been made from the pay of the worker during the period of thirteen weeks immediately preceding the date of the application for the reference (whether or not the deductions were made in breach of the contract of employment), the tribunal may order the employer to pay the worker a sum not exceeding the aggregate of the unnotified deductions so made.Section 12(4) of the Employment Rights Act 1996.
I will follow up with a new post explaining the principles the court would consider at a later date but as will be clear, this is potentially a very valuable right. Think of all the deductions made from a payslip (tax, NI, etc) in a four week pay period, and multiply that by 3.25 (to give 13 weeks) and that is potentially a lot of money. The crucial thing in a section 8 claim is that that thirteen-week period of potential recovery is not extended accordingly. So, if early conciliation is commenced the day after a dismissal, and that takes six weeks, then even if a claim is lodged immediately the maximum recovery period reduces from thirteen weeks to just 7 weeks. If the dismissed employee defers a claim for another two months (as is usual in an unfair dismissal context) then more than thirteen weeks have passed and the prospect of any order to repay deduction is lost entirely. The claimant would still get a declaration but beyond that the victory is pyrrhic.
This seems a perverse situation, but the result is if you’re planning a section 8 claim and pondering an unfair dismissal claim too then it may be worth thinking whether a delay is in your interests to delay the claim. Any delay between dismissal and claim will reduce a claimant’s opportunity to obtain an order requiring the former employer to repay deductions over the maximum thirteen-week period.
As to the reason why the legislation has been drafted that way then I am afraid it is a complete mystery to me (if any readers can shed light on this then please do).
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