Can you Charge an admin fee to employees for calling in sick?
It has been revealed that a company in the Healthcare industry were imposing fines of £50 when employees phoned in sick.
It has also been alleged that workers were not paid for absences following serious incidents.
But is the legal? We discuss this in our article below.
The £50 Fine
It was reported that the £50 was deducted from the wages of the care staff regardless of the reason for illness, or even when a Doctor’s note was provided, covering the absence period.
The Company has denied that they made any deductions from employees who were genuinely ill.
As a result, carers were turning up for work when they were unwell and not fit enough to perform the role as they cannot afford to lose the money. This will potentially put vulnerable patients/residents at risk.
The company have argued that the fee was to cover administration costs if a carer gave less than 24 hours’ notice. They have stated that their staff have signed an employment agreement and that the policy is to protect patient care and to limit disruption to those who rely on their services. However, the company has faced criticism of the policy, and they will no longer impose this fee after April 2019.
The sickness penalty will now be replaced with an internal app that will enable staff to auto assign a shift, and any shifts that become available at short notice can be filled.
Unison has stated that there will be an investigation into the fines as care workers will often be exposed to germs and illness will be unavoidable.
Deductions From Wages
'Deduction from wages' is a common clause in an employment contract. It enables a Company to recover any money that is owed to them, for example, over payment of holiday entitlement.
Without this clause, any deductions that are made to a person’s wage is unlawful.
Deductions will be unlawful under the following circumstances;
- If they are not permitted by law (for example, PAYE, National Insurance etc.);
- Not authorised by the employment contract;
- Or, it was not consented to (in writing) by the employee.
These clauses can be valid, however, the amount that is being deducted from an individual’s wage should not be more than a ‘genuine estimation of loss’ that the Company has incurred.
The Case Law
Cleeve Link v Bryla
The employee had signed an employment contract that permitted her employer to recover amounts from her final pay if she was dismissed for misconduct or resigned in the first 6 months. She was dismissed after less than 3 months for misconduct where the Employment Appeal Tribunal stated that the deductions were fair and in accordance with her contract.
While these deductions were held to be lawful, the Tribunal might not have made the same decision if she left the Company through resignation rather than being dismissed.
ParkingEye v Beavis
However, the ‘genuine estimation of loss’ test was rejected by the Supreme Court. Instead it was stated that the true test would be to determine whether the deduction policy was actually a penalty. It was also considered whether the amount imposes a detriment on the employee that is not proportionate to the Company’s legitimate interest.
Therefore, the deduction would need to be proportionate and cannot be used as a deterrent or a punishment for not fulfilling contractual obligations.
Employers - Before Making Any Deductions…
Any deductions that are not authorised by the law need to be covered by a clause in the employment contract. Despite the deduction being contractual it’s advisable to make employees aware of the amount that is owed and that the Company will be taking the payment.
The deduction also needs to be valid and fair. It should not be used as a punishment to impose on the employee and Companies should be careful that it does not put an employee’s pay below the National Minimum Wage.
For help or assistance on an issue of this nature, please contact us for advice.