Benjamin Mendy will receive most of his unpaid salary after his former club Manchester City witheld it amid sexual assault allegations. In a case similar to that of broadcaster Huw Edwards, employers need to tread carefully if they decide to withold wages, says Rhys Wyborn.
Last week it was revealed that ex-Manchester City defender, Benjamin Mendy, won the majority of his employment tribunal claim against the club and will now receive around £8.5m of his £11.5m unpaid salary.
The money had been withheld for three years following sex offence charges of which he was later cleared.
In a similar case earlier this year, controversy was sparked when it was revealed that Huw Edwards continued to earn his salary for five months after he was arrested for making indecent images of children.
These two high-profile cases have raised questions about employers withholding wages, when it is appropriate and lawful, and the risks associated with doing so.
Difficult decisions
When an employee has been charged with a serious offence, it can be tempting to withhold their wages to prevent a scandal, similar to the outrage that the Huw Edwards’ case caused. However, employers should be wary of doing this, particularly if this is not specified in the contract.
While it can be easy to give into this kneejerk reaction, these decisions cannot be driven by emotion and employers are duty-bound to pay their employees, unless there are contractual grounds to the contrary.
Employment contracts
The current law on withholding wages largely comes down to what’s written in the employment contract.
If specific circumstances where an employer can withhold salary are not outlined contractually, an employer must continue paying their employee to refrain from breaching the agreement.
There are, however, some exceptions under which an employer can lawfully withhold or deduct wages. Typically, this is when an individual is not holding up their end of the bargain such as refusing to work.
Other instances include where employees engage in strike activity, where an overpayment has been made, or where employers are obligated to make deductions on behalf of HMRC, child maintenance or court orders.
Minimising risk
Even within these parameters, employers can get into hot water over withholding wages and must be careful to follow procedures to minimise legal, financial and reputational risk.
Legal costs can quickly add up, not to mention that this could be in addition to paying back the employee the wages they are owed, should tribunal proceedings be lodged.
Tribunals can also affect the company’s ‘employer brand’, potentially affecting the attraction and retention of talent.
The public nature of a tribunal hearing could also mean long-term damage to consumer confidence and trust.
High-profile brands, or brands that consumers feel they have some stake in, such as the BBC, charities or football clubs, should be particularly careful when navigating the reputational risks.
For these higher-profile businesses, the potential reputational damage from criminal proceedings could mean that it would be prudent to explore the possibility of including a clause in employees’ contracts, broadening the scope of when wages can be withheld or reclaimed.
Whether it is advisable to write clauses into contracts regarding recovering wages depends on the employer.
While every employer is different, a number of factors should be considered, including the likelihood a story would be picked up by the media, how much attention it would likely receive, and how damaging and long-lasting the effects would be on the brand’s reputation and trust with its customers or stakeholders.
Potential repercussions
If a clause is deemed necessary, employers should be very mindful when they are drafted. For example, employers are allowed to withhold pay in the case of an employee refusing to work but, as in the case of Benjamin Mendy, employees that are actively prevented from upholding their duties because of third-party conditions or other court orders are not deemed as refusing to work, but rather as having external factors stopping them from doing so.
These tiny distinctions within a contract could have huge repercussions if challenged in court.
The addition of these clauses can also easily venture into the employer appearing to presume wrongdoing before the employee is found guilty in a court of law.
This again could lead to an unfair dismissal claim, where the employee has the necessary service – noting this is set to reduce to a day-one right under the government’s reforms; therefore, employers should consult with a professional when drawing up a contract and only consider this addition for key employees such as public figures or senior directors.
Tread carefully
In the wake of the Huw Edwards scandal, the BBC tried to make amends by announcing that it would try to recover the substantial wages Edwards continued to receive for five months after his arrest.
Unless this was specified in the contract, this would not be an option available to employers and this would fall on the goodwill of the employee involved.
High-profile cases, such as Mendy and Edwards, hitting the headlines has put this issue back in the spotlight, increasing awareness of an employee’s right to claim against wrongfully withheld wages.
For employers, these cases serve as a reminder to tread carefully, especially as their business’ reputation could be on the line.
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