Your previous employer may still have to pay out the money owed to you from your last wages
An employee who has left their job may be owed money by their employer. This may include basic pay, accrued holiday pay, overtime, pay in lieu of notice, contractual redundancy pay, etc.
An employer who owes money to an employee and refuses to pay it may be in breach of contract and/or the law.
This article will look at the possible alternatives an employee can pursue to get the money back.
An employee should firstly always try raising the matter informally with their employer.
If that is unsuccessful the employee should write to the employer requesting payment of the monies that are owed.
It will be helpful for the letter to include details of what money is owed, why it is owing and the period for which the money is owed.
The letter may also ask the employer to respond within a certain time so the employee knows what timescale they are working to.
If the employee is a member of a recognised trade union they should consider asking their representative to raise the matter on their behalf. If the employer agrees that a certain sum is due but offers only part of that amount the employee could acknowledge the payment as ‘accepted as part of full payment’.
If the amount due is still in dispute and the employer offers a lesser sum in ‘full and final settlement’ the employee is entitled to reject the payment and proceed to the industrial tribunal to recover the full amount owed.
If the employer refuses to negotiate or offers less money than the employee is willing to accept there are a number of options to pursue:
- l make a breach of contract claim;
- l make a claim for unlawful deduction of wages;
- l sue the employer in the county court.
If an employee is no longer working for the employer, they can take a claim for breach of contract to an industrial tribunal.
Claims to the tribunal must be made within three months from the effective date of termination, that is, when the contract of employment ends.
An employee may need to raise a written grievance with their employer before bringing a breach of contract claim to a tribunal.
An employee can make a claim for an unlawful deduction from wages whether or not they still work for the employer and do not need to have worked for the employer for a particular length of time to make a claim.
This will apply if the employer has not paid any wages because this counts as a 100% deduction. This procedure cannot be used for pay in lieu of notice claims because pay in lieu of notice is not generally viewed as wages.
For pay in lieu of notice the employee should claim breach of contract. There is a three-month time limit for making a claim for an unauthorised deduction of wages at an industrial tribunal.
An employee must first raise a written grievance with their employer and the time limit for making a claim can then be extended.
Further information on what to do if your employer owes you money is available from your local CAB or from the Labour Relations Agency on (028) 9032-1442.
Siobhan Harding is an Information & Policy Officer with Citizens Advice