Do I need to continue to pay a suspended employee?

Suspending an employee is generally actioned to temporarily stop the employee carrying out work duties on behalf of an organisation. This is usually to enable their employer to execute a disciplinary or grievance investigation. 

It is often a difficult process for employers to manage, with serious implications if certain legal procedures regarding the employee’s salary and pay are not followed. WHN employment law expert Michael Shroot explores the consequences if you happen to get it wrong.

If an employee is suspended from work while an investigation is carried out, it is important for the employer not to be seen to assume the employee is ‘guilty’ of any allegations. Any such suspension must be viewed as an unbiased decision, not as a punishment.

Therefore, where a disciplinary allegation is raised, an employer should only suspend the employee where it is reasonably warranted. In almost all such cases the employee should continue to receive full pay and be clearly told why they are being suspended.

Why suspend an employee?

There are several key reasons why you might suspend an employee from work. They are:

• To investigate an allegation of gross misconduct – for example theft, intoxication or violence at work, fraud or offensive behaviour.
• On medical grounds – your employee may be going through medical treatment but not fit for work, or their health condition (a disease or contagious illness) may put other employees at risk.
• Workplace risk to an expectant mother – in certain circumstances a pregnant woman may not be able to carry out her usual tasks due to health and safety concerns at work.
• Due to an alleged criminal offence outside the workplace – that your employee is currently under investigation for.

Under what circumstances can an employee be suspended without pay?

An employee can be suspended without pay, only if their employment contract states that the employer can do this. If the employment contract does not state this, as an employer you may still be able to suspend the employee, but you must continue to pay them, to indicate that the suspension is not considered or seen as a punishment or assumes guilt.

Even with the appropriate clause in the contract, non-payment may be seen as a punishment and cause you issues further down the line when considering the reasonableness of an employer’s action during the disciplinary process.

Through the course of any type of suspension, wages are defined as any sums payable to the worker in connection with his employment. This calculation can be complicated as it may include bonuses, commission, and holiday pay.

Making a claim against unlawful deductions against an employer

There are laws that protect an employee from the unlawful deduction of pay. If an employee feels that they have been deducted wages during a period of suspension, when they should not have done, the employee may be able to make a claim to an employment tribunal for ‘unlawful deduction from wages’.

An unlawful deductions claim is a statutory concept set out in sections 13 to 27 of the Employment Rights Act 1996 (ERA 1996), that protects workers from unauthorised deductions being made from their wages.

There is a time limit for an employee to bring such a claim, which is within three months of the date of payment of wages from which the deduction was made.

The employment tribunal will need to consider the relevant circumstances when determining whether a sum is properly payable, including an assessment of the contractual position.

If a tribunal finds that the deduction was unlawful, the employer will have to repay the monies to the employee and there is no upper limit on the amount that can be awarded. Furthermore, a tribunal can award a sum it considers appropriate to compensate the worker for any financial loss sustained due to the unlawful deduction such as bank charges or loss of bank interest.

Suspension should not be seen not as a disciplinary event, therefore if a worker is punished such as through non-payment of wages, this could give rise to not only the claim being brought by an affected employer, but claims for breach of contract, unfair dismissal and depending on the circumstances some discrimination-type claims.

For more advice on this complex area of employment law or to help resolve any work-related disputes, contact Michael Shroot on 0161 761 4611 or [email protected]