This is a warning to employers to be careful when deducting monies from an employee’s wages, especially in the absence of any specific provision permitting such action under the applicable industrial instrument, federal or state legislation or the contract of employment.
Generally, in the absence of a specific statutory provision, an employer is prohibited from making any deduction of monies from an employee’s wages without the employee’s specific authorisation.
The Fair Work Act 2009 (Cth) identifies the circumstances when an employer may be able to make deductions from an employee’s wages. Section 324 of the Act provides that an employer may deduct an amount from an amount payable to an employee if:
• the deduction is authorised in writing by the employee and is principally for the employee’s benefit; or
• the deduction is authorised by the employee in accordance with an enterprise agreement; or
• the deduction is authorised by or under a modern award or a Fair Work Australia order; or
• the deduction is authorised by or under a law of the Commonwealth, a state or a territory, or an order of a court.
Further, an authorisation must specify the amount of the deduction, and it may be withdrawn in writing by the employee at any time. Any variation in the amount of the deduction must be authorised in writing by the employee.