In a recent decision the Queensland Industrial Relations Commission has ordered a local government to pay to its former employee an amount that was deducted for relocation costs after the employee resigned.
The Facts
The employee accepted a position at a local government, signing a letter of appointment that included clauses by which the employee:
- Agreed to repay relocation expenses if they resigned within 12 months, and
- Authorised the local government to deduct from his pay any debts he incurred to it.
After the employee’s resignation within 12 months the local government deducted from his final pay an amount for relocation costs.
The employee disputed the deduction for reasons including that:
- Instead of being supplied with a house and internet as promised in his interview he was given a dilapidated donga without internet.
- After a complaint the local government promised to repair the donga when he took leave but it failed to complete the repairs.
The Industrial Relations Act (QLD) provides that an employee must pay the employee’s fixed rate of pay without deduction unless the deduction is authorised by the employee’s consent.
The Decision
In finding that the deduction was unlawful and ordering the local government to pay the deducted amount, the Commissioner observed that:
- The employee did not consent to the deduction simply by his blanket acceptance of the terms and conditions of the letter of appointment, and
- Otherwise an employee would be exposed to arbitrary or unfair deductions arising from issues that may be contested – e.g. repayment for damaged equipment, cost of training etc. – where the cost of contesting the deduction may be prohibitive.
Implications
Although decided under QLD legislation the case highlights the importance of having specific deduction authorities before making a wages deduction.
Employers need to be aware that the Fair Work Act (Cth) also has specific protections before an employee may deduct an amount from wages.
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