Wages

This Handbook is about the law relating to the payment of wages. Wages may be identified as the return due to a worker for making his or her labour available to an employer. On this level, there could hardly be a more fundamental aspect of the employment relationship.

The payment of wages in this country is primarily governed by the individual contract of employment, although the National Minimum Wage Act 1998 sets out a minimum hourly rate of pay below which wages must not fall. Case law has emphasised the significance (over and above other contractual rights) of the mutual interdependence of the obligation of the employee to be ready and willing to work and the obligation of the employer to pay wages. Although collective bargaining still plays a vital part in setting wage levels, it is usually given legal effect only through the incorporation of collective agreements into individual contracts of employment.

The scheme of this Handbook is as follows:

Chapter 1 considers the legal sources of contractual terms, the different types of contractual terms that relate to wages and whether such terms can be varied. It also looks at the effect of industrial action on wages and at the problems associated with the overpayment of wages at common law.

Chapter 2 examines the remedies available to employees whose employer has failed to pay the wages due under the employment contract.

Chapters 3 and 4 look at the protection of wages provisions contained in Part II of the Employment Rights Act 1996. These provisions are primarily concerned with unlawful deductions from wages and unlawful payments to employers.

Chapter 5 sets out the law governing the national minimum wage which came into effect on 1 April 1999.

Chapter 6 explains the law relating to guarantee payments, which provide a modest level of wage protection in cases where employees are laid off.

Chapter 7 considers one of the most significant statutory payments for employees when they are absent from work: statutory sick pay.

Chapter 8 is concerned with a number of other statutory provisions that relate to the payment of wages: insolvency law, medical suspension pay and itemised pay statements

Chapters 9 and 10 look at two types of deductions from wages that an employer may be required to make in certain circumstances: attachment of earnings and check-off.

Chapter 11 considers the concept of a 'week's pay', which is central to a number of employment protection rights, including unfair dismissal and redundancy.

The law is stated as at 1 July 2003.

Published in August 2003