Protection of wages - Case Study Example

Protection of Wages, expected deductions and expected payments Protection of Wages: The General conference of International Labour Organisation, has been convened at Geneva on 8th June 1949. As per C95- Protection of Wages Convention 1949, the employee has several protections. Some of the relevant articles are discussed here: As per Article 4, National laws or regulations, collective agreements or arbitration awards may authorise the partial payment of wages in the form of allowances in kind in industries or occupations in which payment in the form of such allowances is customary or desirable because of the nature of the industry or occupation concerned. Under this article it is stressed that the allowance is required to be appropriate for the benefit of the employee and the amount of such allowance shall be fair and justified. In case an employer is paying some allowance to the employee, which is more than the justified payment, then the employer can deduct such payment. Article 8 states that the deduction from wages by the employer is permitted only under the regulatory control of the national laws or as decided by the arbitration award. Workers shall be informed about the most appropriate reasons and conditions applicable for such kind of deductions. It is obvious that no employer has the authority to deduct the wages if there is no such provision made by the national regulation or by arbitration. Without informing the reasons of deductions, the employer has no authority to deduct the wages. ("Protection of Wages Convention 1949", n.d.) The legal restrictions on the deduction of payment are as follows: Employees are entitled for all the wages earned. Minimum assured wage must be paid to the employee and an employee shall not work for a lesser pay. The deductions from the wages must be beneficial to the employees. The employers are not authorized to deduct the costs of certain things from the wages of the employees on account of - Safety equipments, special clothing, customer theft, inventory shortage, education and training expenses for the benefit of the employee, equipment and tool repair, faulty work. There are several deductions that an employee can make such as - (a) Deductions governed by the statute (b) as per the decree of court (c) charges of boarding, lodging as governed by the employment standards (d) advance pay recovery or erroneous pay correction (e) any deduction, agreed by the employee, which benefits the employee. An employee can deduct the cost of tools from the wages of the employee - (a) If it is a precondition in the employment that the employee must own the special tools, then the supply of such tools by the employer, makes the deductions from wages as an appropriate measure. (b) The employee may be using the tools for job at other employers. (c) The tools may be available from other suppliers but the employee bought it from the employer. The employer cannot make any deductions towards the safety and health legislation. Any equipment, clothing required to be worn by the employee for personal safety must be supplied by the employer at its own cost. Cost of safety equipments and clothing are directly beneficial to the employer, that's why they are not deducted from the wages of employee. ("Deductions from wages", n.d.) Equal Pay: Employers must offer equal pay to men and women irrespective of gender: (a) if they are employed for similar or "like work" (b) if the job evaluation treats both kind of jobs as equivalent. (c) the value of work is recognized equal. As per the employment terms equal work shall offer equal payment irrespective of gender. An individual employee has the protection of claim under Equal Pay Act 1970 in an employment Tribunal. The employee can seek for the claim within six months after leaving the employment. ("Rights at work", n.d.) The employees are protected by the UK registered ship contracts: Under this contract or legislation, the wage of an employee is considered as the sum payable by the employer in relation to the job done, which includes: goods or services; gift vouchers or tokens; statutory payments like sick pay and maternity pay; bonus; fees; holiday pay etc. Some payments that are not protected under the legislation are: pension and redundancy payments; advances of wages and loans; compensation for loss of office; gratuity and other tips paid to the employee by a third party. A lawful deduction falls within the following conditions: (i) It must be authorized by the legislation e.g. income tax or national insurance (ii) If the deduction is done as per the worker's contract and the written justification and concerned terms has been handed over to the employee prior to the deductions. (iii) The work has to agree in writing for the deductions to be made. (iv) Deduction made as a result of disciplinary proceedings for in legislation. (v) Deduction to satisfy the court order or tribunal decision. (vi) Deductions for reasons such as misconduct or poor work, Under the contractual legislation, an employer can make certain lawful deductions for several cases of stock deficiencies and cash shortages. In all such cases the employer cannot deduct an amount more than 10% of the employee's gross wages at one time. Amount more than 10% of gross wages shall be divided over a period of time unless it is a final payment of the employee. No deductions can be started after 12 months of the reason of deduction took place. If an employee feels that he/she has fallen pray to the unlawful wage deduction, he/she can lodge a formal complaint in the employment tribunal. No prescribed length of service is required for lodging the complaint. Prior to lodging a complaint, the employee has to try to settle the dispute with the employer, if it fails then the employee can proceed for the legal remedy. For the sake of mutual settlement three months time is allotted before starting the legal proceedings of the case. ("Employment Contract", n.d.) Case Study: Considering the case of Dottie, where her employer has stopped the extra allowance for weekend shifts. Though the employer has put the notice of stopping the allowance on the bulletin board, it is his unilateral decision. Any decision, which reflects in the wage structure, must be decided in mutual consent with the employee's union. As per the contractual terms and conditions, the employees working on the week end shifts are entitled for the special allowance. Some special allowances are excluded from the wage package("Employee Rights"), but it is also studied from the "Protection of Wages Convention, 1949", Article 4 that the wages may consists of some part from allowances, if the nature of job in the industry desires so. Working in weekend shift is a special job, which supports the claim for an allowance. An allowance can be revised periodically, but stopping of an allowance breaches the terms of the contractual obligation. Therefore Dottie's case stands good for the legal protection against unlawful deduction. Dottie is strongly advised to seek the help of Employment Tribunal. In case of Edgar, the deduction has been made on account of cash shortages in the till. It is studied from the "Employment Contract" that the lawful deductions can be done by the employer from the wages of an employee in case of stock deficiencies and cash shortages. Therefore the deductions made by the employer are lawful and it does not breach the contractual terms. Considering these facts, Edgar's case does not hold stake for seeking the legal remedy against unlawful deductions. He is advised to refrain from lodging any complaint in the Employment Tribunal. References "Protection of Wages Convention 1949", from http://www.ilo.org/ilolex/cgi-lex/convde.plC095 "Deductions from wages", from http://www.gov.mb.ca/labour/standards/factsheet,doc,deductions.pdf "Rights at Work", from http://www.acas.org.uk/media/pdf/2/6/RW05_1.pdf "Employment Contract", from http://www.nwpayroll.com/factsheets/employcontract.html "Employee Rights Law", from http://www.ausa.org.uk/assets/Employee_Rights.doc Read More