Can an employer deduct employee's salary for a mistake rather than discipline for misconduct?

[franjipani]

...because I cannot see how that would be fair or equitable? I am a longtime lurker and was hoping someone may be able to share any knowledge or experience they have. I appreciate that this may be a situation where we need formal legal advice but at the moment, some words of reassurance would do...

DH came home from work today and told me something had happened but he had been sworn to secrecy.

In a nutshell, DH failed to do something at work. The company it affected has since gone bust (NOT as a result of this) and its administrators claim that DH's company owed that company money.

H had been told something serious was happening but no further details until today.

It turns out that the administrators obtained a winding up order in favour of DH's company as a result of this. DH knew nothing about any of this until today.

DH's company have had to pay to resolve this and basically his boss told him that they couldn't make him pay the money but suggested he "make them an offer" ie contribution to avoid disciplinary proceedings. He has been sworn to secrecy. None of this is in writing.

Naively, he accepted. And has signed something agreeing to pay a not insubstantial sum to his employer.

I understand DH's employer is angry but I cannot see how the winding up order could be his fault if he knew nothing about this? Surely no court in the land would issue such a thing unless it was satisfied that DH's company was on notice that it would petition for a winding up order if the debt wasnt satisfied? I have a sneaky feeling, DH's employers sat on this until it was too late and are now seeking to recoup their losses in legal fees.

Further, I'm really dubious about the idea of being expected to pay your way out of being disciplined for an honest mistake. DH wants to just swallow this for the sake of not being treated badly in the future.

It's interesting that DH's employer's IT system is being tightened up as a safety valve so this kind of mistake can never happen again.

DH has a long and glowing employment history. We depend upon his salary so he is worried about rocking the boat. It all seems to unfair though; HR wasn't even aware or present day when DH signed paperwork agreeing to pay some of the money back. It's not a small company.

Sorry for the essay.

So sorry you're going through this, frangipani, and yes I think you should seek advice from someone specialising in employment law. I agree with your suspicions that this has been left until it's become very costly to your husband's employers.

I'd suggest he makes HR aware that he signed the agreement under pressure and wants to rescind it whilst he gets legal advice.

Something to bear in mind, though - there's every possibility that as soon as he has paid his "contribution" they'll be looking to get rid of him since he knows how shittily they dealt with the issue.

Don't pay up!

Thank you so much for your reply! DH reckons he will be fine if he just swallows this and pays up but it seems so wrong to me. Definitely going to HR though,perhaps they may advise the bosses that their proposal looks dubious? Let them be the bad guys? It's oh-so easy for me to be objective as I'm not in this position myself but I am glad that Im not the only one who smells something fishy...

I've only worked in one industry for my entire career, and it's usual for there to be an Employee Liability Insurance policy to be in place. So on the occasions when an employee does something that costs the company serious money they (the employers) can claim the cost from the Insurers. Sorry, I don't know if this applies to all types of business, though! Perhaps if you could tell us a bit about your husband's area someone with more experience of that sector could advise?

It's recruitment. The company was an umbrella company. DH's company is challenging the method used by the administrator. They appear to be legal but disproportionate. Can't believe they obtained a winding up order. H must have for this wrong. Seems so extreme.

It's the secrecy he's been sworn to which sounds moody to me.

Thanks so much!

Cant advise on the money thing but a company tried to maliciously obtain a winding up order on my Dad's company when we disputed a debt. We wrote a legal sounding letter (a solicitor and the internet helped) pointing out the consequences of doing so. Companies basically use it as a threat because company owners panic and think it will make people think they are going bust. My Dad is bloody minded and has a real sense of right or wrong.

So it looks like his bosses panicked and didn't take proper advice.

Thanks, pictures. I'm wondering if they sorted it out at the doors of the court and are now trying to get DH to be the scapegoat. He's not entirely sure what has happened. The discussions today sounded very rushed. At the time, he was just relieved not to have been disciplined...