Can Employers Recover Financial Losses from Employees Legally?

October 3, 2024    Employment Lawyers
Can Employers Recover Financial Losses from Employees Legally?

In different fields or industries, it is common to see material damage or ingredient loss – and it can be because of an accident or the worker’s negligence. It is axiomatic that damage to the needed material will also cause financial loss for the employer. Everyone wants to know: Do these incidents create a breach of contract employment law? Most importantly, can the proprietor deduct money from the worker’s payment or other funds? The Australian legal system is clear on this matter, and being aware of the guidelines will help you manage if something similar happens to you.

 

Incidentally, keeping in touch with the best employment lawyers Perth will be a good precaution. However, before seeking legal help, it is imperative to know the essential aspects associated with it.

 

The apparent understanding

 

Even the best employment lawyers in Perth are often asked whether the company management can deduct money from the employee’s salary or wages. If they have lost equipment or caused damage, replacing or repairing those damages would take money.

 

Mostly, the rule of thumb remains that the repair cost will be the employer’s responsibility to bear. If they try to deduct something from the workers’ wages by themselves, they would be in breach of employment contract law, specifically the Fair Work Act (s324). However, the rule isn’t absolute, and there are exceptions.

 

An employer can rightfully deduct from a worker’s salary only if any statutory provision or court order allows it, and the employee’s specific authority will become null and void in these cases. However, even if permission is available, the deduction can solely be made to pay a third party and only for the employee’s (not the employers’) advantages.

 

What are the deductions allowed by law?

 

The Fair Work Act (s326) mentions instances where deductions are prohibited in the Australian legislature. On the other hand, the Fair Work Regulations 2009, Reg. 2.12 mentions examples where the deductions can be considered reasonable and wouldn’t cause a breach of employment contract claim.

 

  • Employers can deduct health insurance fees from employees’ salaries, also called health fund fees.
  • Employers can deduct fees from employees’ salaries against any services or goods they provide to workers or if the goods and services are related to the employer. However, there are several conditions attached to this guideline.
  • Firstly, the employer or related party can only provide those goods and services in the ordinary business. Secondly, the employees will get those goods and services on the same terms as any member of the general public. Finally, these terms and conditions must be more favorable for the employees.
  • The employer can deduct fees from the employee’s salary if the latter has taken a loan and needs to repay it.
  • The proprietor can deduct money from the employee if the latter uses a particular property the employer owns voluntarily and privately, and the employer has to incur costs because of that. It doesn’t matter whether the use was authorized; the employer can deduct money to recover the cost.
  • Some of these types of use are – calling personal numbers on a company mobile phone or buying items to be used personally with a corporate credit card. In these situations, the employer will not be liable for the breach of employment contract law.

 

What are garnishee payments? Can the employer deduct money for it?

 

Garnishee payments are court-mandated payments for a debtor. The most appropriate explanation is if an employee of a company incurs a debt, and any issue arises with the repayment – the court can order the employer to withhold a portion of the employee’s salary to the creditor or the court to satisfy the debt.

 

The Australian state and commonwealth law offices present garnishee orders with pre-existing limits on the employee’s salary deduction. The Australian Family Court and Tax Office can also issue such orders.

 

Conclusion

 

We would like to say that the court can also order an employer to deduct money from a worker’s salary to arrange child support payment. These pay cuts can be made from commissions, salaries, wages, bonuses, and allowances.

 

Or it can also be from particular measurable termination and retirement payments, payments of labour under work contracts, and remunerations like subcontractor payments and director’s fees. So, now you know the deductions that can be made as an employer. However, it’s better to hire an employment lawyer to get proper solutions in these cases.

REQUEST A QUOTE NOW! Complete the form below for a fast response


  • I was referred to employment lawyers perth wa by a friend and that were fantastic my employer was very rude and refusing to pay me what was owed to me I really thankful to employemeny lawyers in perth who resolved my case withing 2 weeks I appreciate your efforts and reasonable fees

    Pahulpreet Singh
  • You are really great in terms of resolving legal employment matters in quick time with reasonable fees. Recommending as best employment lawyer in perth near me.

    Komal Kanyan
  • I can’t thank enough Employment Lawyers Perth WA for helping me out with my contract case. I got in touch with employment lawyers in Perth. Excellent service fron an outstanding professional team. The lawyer here was very honest and efficient in helping me to bring out of this problem. I highly recommend them.

    Mathew Kolil
Employment Lawyers Perth Wa Have Been Helping You Take Control Of Your Outcome.
Copyright © Employment Lawyers Perth. All Rights Reserved
Enquire Now
Call Us Now