Yes, or the employer may have to forfeit the debt said the Employment Appeal Tribunal in Ridge v HM Land Registry.
Mr Ridge had exhausted his sick pay entitlement. His pay was adjusted by his employer for the month-end payroll depending on information being received and processed in time. When the information was not received in time, Mr Ridge was treated as having been overpaid for that month and the overpayment recovered from his following month’s gross pay. The deduction to the employee’s pay was shown as a separate entry on the payslip with a minus sign.
Mr Ridge argued that further details explaining the variation to his gross total pay, including whether adjustments were made in the same or following pay period, should have been provided by his employer. He considered that the explanation should have been expressly set out in his payslip.
The Employment Appeal Tribunal found that what the employer did amounted to a deduction of wages and suggested that the employer should have included some abbreviated words to make it clear that the sum was recovery of an overpayment.
This case highlights the importance of ensuring that payslips are properly itemised and explained, particularly if employers wish to reduce an employee’s wages to recover an overpayment.
If not, employers who reduce an employee’s wages to recover an overpayment may have to forfeit the debt. This is despite the employer being entitled to make the deduction and the employee understanding the reason for the deduction.
The full case can be read here.