Can an employer withhold your wages owed.

[Introducingme]

We had an employee who allegedly stole something from the workplace.
No police action, no investigation. Just made uncomfortable they resigned.
I only receive instructions to pay the payroll from the bank every 4 weeks.
I've been asked not to pay this person any money owed.
They are owed a tax refund and that is all I'm told to pay.
This person is owed holiday pay plus 5 hours for work they attended.

I feel I've been put in a terrible position. Just getting as much info as possible
so I can push back.

If you've sent employee an email. I'd then do the deduction last in sage payroll itself. Then the net pay will be zero. Then issue p45. But that means you'd only be able to deduct max was his net pay would've been previously. But that's the best your employer can achieve I suspect.

The op is an employee and must act as instructed by her employer and that is not to provide evidence to the employee.
The employer cant prove the employee stole anything. So they cant instruct her to add in a deduction called 'theft recovery'.

Depends what their employment contract says. Most these days contain a generic clause claiming allowing deduction of wages, this is for a limited list, eg failure to return uniform, overpayments, excessive holiday.

Employer email to employee prior to payroll that a deduction will be made. Employee then has been informed and has a choice of how to respond.

You did not list outright theft which is what the OP has stated in her post. So the employee was never issued with whatever went missing just suspected of taking company property.

The OP is an employee and not in a position (and would be a fool to attach her name ) to any communication which said moneys are being withheld due to suspected theft of company property

The OP is new and not the decision maker in this process so she is well advised to leave who ever is making the decision to also take ownership of the action's outcome.

I don't think there is any actual risk of sending an email to ex staff to say here is your payslip with these deductions made by the company.

You are doing it on behalf of the company.

There may be issues if you are regulated but deducting moneys from staff is not a crime as such that a staff member communicating that decision would face any criminal actions for.

Its theft
You are sending a letter that you sign to someone who can sue you as you have provided proof that there was a 3 party communication with other employees.
If there was a court case your employer may have legal cover insurance and that bit is not your money.

Get the people who made the decision to sign off that way if there is legal action you dont need to pay a personal solicitor.

Wages payments are covered by law and case law (where employers lost cases) withholding money for unproven theft is an employer problem which the employer can sort out.

Writing to the ex-employee opens the employer and the employee to civil litigation the "for and behalf of" is a defence in court. Balancing the risk ex-employee not likely to have the funds to go to civil court but may on principle.

So unless there has been legal advice (not in this case) or police action (none) dont volunteer to be the named employee. And if you have no choice keep the covering letter to here is your payslip contact X if you have any questions.

It's not theft by you, the payroll person.

It's maybe company theft but it's not the person who does the action on behalf of their employer in the course of their job (different if they did it totally off their own bat)

Show me any legal case where the payroll person has been sued successfully or charged with theft for this sort of thing, when acting on clear instructions by managers.

You as an employee can do this:

any actual risk of sending an email to ex staff to say here is your payslip

Should never do this:

with these deductions made by the company.

defamation of character

You are telling the ex-employee that there has been a public communication (you and someone else) about the ex-employee and the reason that there is a deduction is that someone (not you) said that that the ex-employee is a thief.

In this case there is a financial loss (deducted wage, bullied from job, poor or no reference) to the ex-employee and defamation of character.
As the OP and the employer have no proof that the ex-ee actually stole there is no [(edit) true or] fair comment defence. And the OP's defence 'for and behalf of' helps prove the ex-ee case against the Employer

UPDATE

I've been let go with immediate effect.
My questioning if it was legal proves I'm not a good fit for the company.

If this is how they operate I'm glad they have let me go.
There were other things I saw that seemed wrong but it was the not paying someone on a suspicion I didn't like.

Sorry to hear you lost your job.
🌻
Hope you get a better one soon.

And you may want to have a friend call to see what they say if contacted by a new employer.

They appear to be the type to be foolish.

Sorry to hear that op. Hopefully you'll get a new job asap.

That's just terrible. They should encourage questioning. You're better off not working for them Op. Good luck with finding a new job.

If they don't pay you your contractual notice and accrued outstanding holiday pursue it through the employment tribunal (non-payment of wages). You will undoubtedly get back moneys owed.

Make sure you email them first, setting out what they owe you (get a read receipt).