Q&As

If an employer agrees to place a worker on furlough under the Coronavirus Job Retention Scheme (CJRS) and then later discovers that it is not eligible to claim the CJRS grant to subsidise the cost of the furloughed worker's wages, can the employer treat the payment it has made to the employee as an overpayment of wages and make a deduction from wages to recover the money, or will it depend on the contents of the furlough agreement?

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Published on LexisPSL on 30/09/2020

The following Employment Q&A provides comprehensive and up to date legal information covering:

  • If an employer agrees to place a worker on furlough under the Coronavirus Job Retention Scheme (CJRS) and then later discovers that it is not eligible to claim the CJRS grant to subsidise the cost of the furloughed worker's wages, can the employer treat the payment it has made to the employee as an overpayment of wages and make a deduction from wages to recover the money, or will it depend on the contents of the furlough agreement?
  • The nature of pay and wages
  • Deductions from wages
  • Changing terms and conditions
  • Coronavirus Job Retention Scheme (CJRS)

The nature of pay and wages

The essence of employment is pay in return for work; there is a duty to pay wages whenever an employee is ready, willing and able to work. Generally, it does not matter whether there is any work for them to do. As Lord Templeman put it in Miles v Wakefield MDC:

'In a contract of employment wages and work go together. The employer pays for work and the worker works for his wages. If the employer declines to pay, the worker need not work. If the worker declines to work, the employer need not pay. In an action by a worker to recover his pay he must allege and be ready to prove that he worked or was willing to work.'

The underlying contract must also be considered.

Different considerations will apply to a failure to work because of sickness, injury or other 'unavoidable impediment', which may be governed by express or implied terms or by custom.

For further information, see Practice Note: Pay and wages.

Deductions from wages

Where the employer fails to pay the employee’s wages, the employee may have a claim for unlawful deduction from wages; an employer may not make a deduction from the wages of any worker employed by the employer, or receive a payme

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