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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3695
Experience:  Solicitors 2 years plus PQE
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Hello, I have just been asked to sign a new contract of employment,

Resolved Question:

I have just been asked to sign a new contract of employment, I have been with them for 3 years now.

There is a line in it that reads:

Deductions from pay:
By signing these terms and conditions of employment you consent to any deduction from any sum otherwise payable to you, the value of any claim the company may have against you including.......
Where the company has sustained loss in relation to monies of the company caused through your negligence, recklessness, dishonesty or through breach of the company rules the company requires the employee to repay any proven loss.

I am quite worried about this and potentially giving unlimited personal liability to the company. I am a sales manager for the business and look after some very high value contracts.
I am worried that as I work on high value contracts, if I make an honest mistake that could be suggested to be negligent (let's say I miss off a zero on a quote and cost the company thousands) could I be potentially liable to repay the companies losses. Or if I accidentally break a piece of company equipment, am I liable for it?

Please can you advise what this means and what levels of liability an employee is reasonably required to give.

Many thanks
Submitted: 4 years ago.
Category: Law
Expert:  Alex J. replied 4 years ago.

Thank you for your question and welcome to Just Answer.

Are you being given a pay rise for this new contract?

If you refuse to sign this do you think they will seek to remove you? Have you previously caused the company loss?

Kind regards

Customer: replied 4 years ago.
Thanks for your prompt reply.

I am not being offered a pay rise. All employees are being asked to sign this new contract (there are changes to sick policy etc that I have no problem with)

It has been suggested that if the contract isn't signed then "you will be out the door" (a line manager mentioned that to a colleague of mine)

Due to the nature of my job, I have made mistakes and caused he company losses - but it's not isolated to me, all of us make silly mistakes that cost the company money, on the flip side to this - we can also make mistakes and make the company lots of money!

Many thanks and kind regards
Expert:  Alex J. replied 4 years ago.

Thank you.

In terms of liability you are free to agree whatever you like however I would note the following:
1. There is no way I would agree to this liability, it is as you say an un known and unlimited. If you must sign it then your liability must be limited by reference to your salary you don't want to have to pay out more than you actually receive for example liability limited to three months salary;
2. They cannot force you to sign these terms they are more onerous than your existing terms and you are not being compensated for it. If they then get rid of you, you may have grounds for an unfair dismissal claim.
3. It is not normal for employers to do this, they should ensure that these mistakes are not made through proper training process and by monitoring the staffs work. They are basically passing this risk on to you by way of deductions to pay.
4. They used the word dishonesty, this is basically fraud if you defrauded the company they would be able to claim this money off you anyway and they would probably sack you. Therefore it is very strange to try and anticipate this.
5. Finally if you are going to sign this it must clear that any money taken from you can only be by way of future deductions and they must not be allowed to claw back any salary they have already paid to you.

I personally would not sign this and if you felt you had to sign it I would expect an increased salary.

If you have any further details please do not hesitate to post them. I look forward to hearing from you.

Kind regards


Customer: replied 4 years ago.

Many thanks for your reply - can I just clarify that if I do sign this contract then I am holding an unlimited liability to the company?

Many thanks for your great advice

Kind regards


Expert:  Alex J. replied 4 years ago.

Thank you.

If you do sign this contract it appears that your employer will have very wide scope to make deductions form your wages without any limit to your liability. In theory as you only receive a fixed amount each month it could be implied that your liability is limited each month to your monthly salary, but this is not expressed.

This is why it is so important that they are not allowed to claw back from you any monies already paid as that could make your liability truely unlimited.

The clause is completely one sided and it appears there is no explanation as to how the deductions will be made or whether you can appeal them.

Kind regards

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