Pay or wage dispute

If you have not been paid what you think you are due, then you should speak to your boss (or line-manager) to find out why. This applies if the dispute is over pay or other benefits. It might just be an error. But it might be that there is a disagreement over what you are entitled to.

If you are not happy with what your employer says, then our fixed price advice services may be able to help you take matters further. This could be help with a written complaint letter (known as a grievance) or mediation or taking legal action.
The time limits for using the Employment Tribunal are just under 3 months – so you should always act quickly with disputes relating to employment. 

Summary of the law - Pay and wage disputes

What are your rights?


  • As an employee, you have the right to be paid your full wages as agreed in their contract of employment.
  • You also have the right to be paid at the time given in your employment contract.

Employers cannot deduct or refuse to pay part or all of an employee’s ‘wages’ unless they are authorised to do so or in certain permitted circumstances:

  • the law allows the deductions for days when you were on strike
  • the law expects the employer to make deductions  where there is a court order (an ‘attachment of earnings’ order) or when directed by the Child Support Agency for maintenance payments
  • if your contract of employment allows specified deductions (perhaps to re-claim unauthorised expenses). But to do this the term in the contract must be one that is permitted by the law.
  • if you agreed in writing to the deduction before the event which led to it.

Special rules apply to deductions from / non-payment of wages of employees who work in retail sector with jobs such as selling products, services or financial services.

The area of law is known as “employment law/breach of contract”.  You are also given extra rights under Sections 13-27, Employment Rights Act 1996. 


Steps to take following unlawful deduction of wages


If an employers has failed to pay your wages or has made an unlawful deduction you have the following options;
1: usually your first step will be to talk to your employer or supervisor or HR department and ask why the wages have been deducted / have not been paid. 

They may have a simple explanation and may be able to resolve the matter without the need for further action from you.

2: if you do not get a satisfactory answer then you should put your complaint in writing. This is known as a grievance. A sample letter is provided to help you.

3: if the letter does not resolve the problem you can use the court process – you have 2 options:

  • Bring a claim for an ‘unlawful deduction of wages’ using the Employment Tribunal. This is limited to pay disputes and not other contractual benefits; or
  • Bring a claim for breach of your employment contract using the County Court. This can cover pay and other benefits. For claims under £10,000 the claim will be dealt with using the small claims procedure.


Under both options you can also claim back from your employer any interest or bank charges or similar expenses you have been put to because of not receiving the full pay you were entitled to.


What evidence should you collect together?


1: Contract of employment stating your salary and any clauses setting out where your employer may make deductions from your wages
2: Payslips
3: Bank statements showing any gaps in payment, 
4: bank statement showing any additional bank charges caused by not being paid
5: bank statements showing any loss of interest on savings you have had to use.
6: If it gets to using court or tribunal you should use a copy of your written grievance letter.


What can you claim?


1: The full sum of money owed

2:  Any interest or bank charges or other expenses which you have suffered or lost out on as a result of the deduction.


What is the deadline for starting a claim at tribunal or court?


3 months from the deduction / non-payment less 1 day. So if you were due to be paid on 25th January 2014 the tribunal must receive your claim by 24th April 2014. 
The three months is usually calculated from the date of last event. It is not enough to have written your grievance letter to your employer within the 3 months – you must also have applied to the Employment Tribunal using their official forms.

If you miss the 3 months deadline, you can use the county court process – where the deadline is usually 6 years. The court process (small claims court if the dispute is for £10,000 or less) is the one to use if as well as wages you are entitled to other contractual payments or benefits that have not been paid. See the example claims section for a list of the moist usual examples.


Example claims


Tribunal or County court - The following list contains examples of the most common types of payments that are classed as “wages” and can therefore be claimed in the Employment Tribunal: 

  • Salary, 
  • Commission
  • Bonuses
  • Holiday pay
  • Statutory sick pay
  • Statutory maternity, paternity and adoption pay, 
  • Notice pay - provided the employee is required to work during the notice period or is treated as doing so.

County Court only payments (as well as wages) due from employer not being paid on time or not paid at all.   The following list contains examples of payments that are not classed as “wages” and therefore can only be claimed for breach of contract:

  • Loans and advances of wages, 
  • Pensions, 
  • Allowances or gratuities in connection with retirement, 
  • Expenses, 
  • Redundancy payments, 
  • Benefits in kind (gym membership, private health care, life assurance).


Disclaimer reminder

Please note: To give you general information about your dispute, the information given here is a simplification of a complex area of law and cannot be relied upon. As part of our commitment to serving you better, we highly recommend utilising the resources available at the Money Advice Service website. Their comprehensive guides and information cover various aspects of financial and legal matters, including small claims advice and may be able to give you the support you need.

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