Hi,I received a bursary payment from my current employer in the 2011/12 tax year of £2000. Part of the bursary agreement stated that if I left the company the bursary must be paid back in full. I have asked my employer to take part of the bursary payment from my final salary and the rest I will make up with a cheque. However they have stated they what a lump sum payment of £2000 and until that is received my final salary will be withheld. Here is the part of the contract which refers to repayment:- "Such sums as may fall due to the Employer by reason of this Agreement may be recovered by the Employer in whole or in part by deduction from payment of any sums die to the Employee or such by other means as the Employer deems necessary, including but not limited to, an action for debt against the Employee."I feel the employer is being unreasonable and unlawful by stating they will withhold my final salary. I have spoke with HMRC and ACAS and both say part of the bursary payment can be taking (pre-tax) from my final salary. I personally believe my employer is being unreasonable however I need to know where I stand legally as he has stated failure to pay may result in debt collection. I have a series of emails from the employer if you require them
Province/Country relating to question: UK
Speaking directly with the employer, and confirming information with HMRC and ACAS
I'm happy for the employer to withhold all of my salary and to put this towards payment for the bursary. The outstanding balance I will then made up via a cheque. The Employer however does not want to do this.
This is the message he sent me:-
I have spoken to our advisors and they have confirmed that our position on this matter is entirely correct - it is indeed our choice as to how the £2,000 is paid back and we are under no obligation to either you or HMRC to pursue any alternative actions or to provide any explanations, legal or otherwise. As previously stated, if you feel that you will be out of pocket due to taxation, you will have to take that up with them, once both the £2,000 has been re-paid to us and your subsequent final salary has been paid upon completion of your employment here.
As already stated, our position remains clear – it is our prerogative to choose how the money is paid back to us. Your legal advisors seem to have not noticed that the section to which you refer uses the word ‘may’ as well as the phrase ‘by such means as the employer deems necessary’. If you feel that the sums involved are so large to make it worthwhile pursuing a legal action against us via your solicitor friend then that is of course your prerogative. As this entire situation is as a direct result of your breaking the contract in the first place, I would have thought that your friend or the ACAS rep would have advised you that such an action could not succeed.
I will correspond no more on this matter. Our position is quite clear, legal and quite proper. You must repay the £2,000 bursary in full as already agreed, in advance of your final salary being paid upon completion of your employment. This payment to us must be in whole and received in to our bank account as cleared funds before your final salary will be processed, in the normal manner.
In response to your implied threat, I now am forced to add that failure to comply with this request will result in immediate legal action to recover all debts relating to the breached contract, along with all associated costs.
I assume so...My final salary will be in the region of 1200 after holiday deductions. So I would then make up the remaining 800. However the employer isnt unwilling to do this, they just want the full amount before they release my salary which seem unreasonable to me. What do you recommend I do?
Yes I think that is probably the best course of action. Let them keep my final salary and I'll make up the remaining balance. I just dont want to be the position of paying tax on my final salary and then paying the full bursary back as I'll be out of pocket.
I have spoke with the tax office and it shouldnt be an issue. Anyway thank you for your time ben
Expert in UK Employment Law
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