GENERAL RESTRICTIONS ON DEDUCTIONS MADE, OR PAYMENTS RECEIVED, BY EMPLOYERS (Hansard, 23 July 1986)

§ The Parliamentary Under-Secretary of State for Employment (Mr. David Trippier)
I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker
With this it will be convenient to take Lords amendment No. 2, in page 2, line 33, after "wages" insert , or (ii) any overpayment in respect of expenses incurred by the worker in carrying out his employment,

§ Mr. Trippier
Clause 1(5)(3) contains a provision which excludes deductions made by employers to recover earlier overpayments of wages from the requirements of part I. It is common practice in many organisations to make small overpayments of wages or expenses, for administrative convenience, which are then recovered from a later payment of wages. An example would be where final figures on bonus due or expenses claims are not available in the pay office when the computer is run, so a standard sum is paid and the balance paid or recovered later. In the Government's view, deductions for such reasons should not be caught by the Bill. Otherwise provision to make such deductions would have to be made explicitly in the contract of employment, with the result that vast numbers of contracts would have to be rewritten. An employer would also have to ensure that all workers liable to suffer such deductions had been given, at some point in advance of the first such deduction being made, a copy or explanation of the term of the contract providing for the deduction. In short, if such deductions were covered, it would lead to the need for substantial changes in administrative and personnel practice in many companies. In our view, that should not be necessary.
The Lords amendments with which we are here concerned are intended to close a gap in clause 1(5)(a). In some circumstances, employers will seek to recover an overpayment of expenses which has been made to a worker in the course of his employment. Because expenses are not included in the definition of wages for the purposes of the Bill, they are not caught by the existing wording of clause 1(5)(a). 474 Let me emphasise, however, that these amendments will not affect the common law rights of workers where an employer recovers sums from wages on the ground that he had made an earlier overpayment of expenses and the worker thinks the recovery involves a breach of contract. The Bill will not prevent workers from continuing to take employers to the ordinary courts about alleged breaches of contract arising from the non-payment of expenses. Furthermore, there is no possibility that these amendments could give rise to injustice. If the worker believes the employer is deducting more than what was overpaid he can complain to a tribunal, which will determine the matter. If what is being deducted is no more than the earlier overpayment, the worker has not lost anything.
We believe that expenses should be treated in the same way as wages concerning deductions to recover earlier overpayments. I commend these amendments to the House.

§ Ms. Clare Short (Birmingham, Ladywood)
There is no need to spend long on these amendments. The Opposition accept that they should be made. However, given the nature of the Bill, its mean-mindedness, the way in which it will cut the wages of some of our poorest workers, and the unreasonableness with which the Government have brought the Bill to the House when the other place finished with it only yesterday, we are inclined to be bloody-minded and to oppose amendments such as these, so that employers would have to specify in contracts the right to take back over-payment of expenses. However, we have decided to proceed on the basis of common sense, and it is obviously the case that sometimes mistakes are made and workers are overpaid wages or expenses, and it is better that these things should be settled amicably. We are not opposed to the amendments.