Employer Must Pay Back Unlawfully Deducted Wages
📌 In brief
An Employment Tribunal has decided that an employer must repay any wages that were unlawfully taken from an employee's paychecks. In this case, the employer had deducted too much national insurance and income tax, which they are now required to return in full.
⚖️ Legal holding
An employer must pay unlawfully deducted wages to an employee as provided by s.12(4) of the Employment Rights Act 1996.
📖 What the law says
Section 12 of the Employment Rights Act 1996 allows an employment tribunal to declare that an employer has failed to provide a proper pay statement to an employee. If the tribunal finds that there were unnotified deductions from the employee’s pay over a period of thirteen weeks, it can order the employer to pay back the total amount of these deductions.
Plain-English explanation — does not replace advice from a solicitor.
📖 Technical summary
The claimant successfully recovered underpaid national insurance and income tax from the respondent.
📜 Headnote Official document
The Employment Tribunal ruled that the employer must pay back to the employee the unlawfully deducted national insurance and income tax, totaling £1631.01, as required by s.12(4) of the Employment Rights Act 1996.
📚 Full judgment Official document
OUTCOME: Allowed
Case No. 2400240/2025
EMPLOYMENT TRIBUNALS
Claimant: [redacted]
HELD AT:
Manchester ON: 18th March 2026 BEFORE:
Employment Judge Anderson
REPRESENTATION:
Claimant: [redacted]
In Person
Both Mr & Mrs [RESPONDENT] in Person
JUDGMENT BY CONSENT
1. The [APPELLANT] agrees to pay to the Claimant the following sums unlawfully deducted from his wages as provided for by s.12(4) of the Employment Rights Act 1996: a. £1256.51 in under payment of unpaid national insurance b. £374.50 in under payment of income tax.
2. The total sum payable is £1631.01
3. Upon receipt of this sum, the Claimant shall discharge any liability to HMRC. If the [APPELLANT] does not pay the Claimant all or part of this sum, the [APPELLANT] shall remain liable for this sum to HMRC.
4. All other claims are dismissed on withdrawal.
Case No. 2400240/2025
_____________________________
Employment Judge Anderson
18th March 2026
JUDGMENT SENT TO THE PARTIES ON
17 April 2026
FOR THE TRIBUNAL OFFICE
Notes
Public access to employment tribunal decisions
Judgments and reasons for the judgments are published, in full, online at www.gov.uk/employmenttribunal-decisions shortly after a copy has been sent to the claimant(s) and [APPELLANT](s) in a case.
Recording and Transcription
Please note that if a Tribunal hearing has been recorded you may request a transcript of the recording, for which a charge may be payable. If a transcript is produced it will not include any oral judgment or reasons given at the hearing. The transcript will not be checked, approved or verified by a judge. There is more information in the joint Presidential Practice Direction on the Recording and Transcription of Hearings, and accompanying Guidance, which can be found here:
https://www.judiciary.uk/guidance-and-resources/employment-rules-and-legislation-practice- directions/
Case No. 2400240/2025
NOTICE
THE EMPLOYMENT TRIBUNALS (INTEREST) ORDER 1990 ARTICLE 12
Case number: 2400240/2025
Name of case: [APPELLANT]
v [NAME] [RESPONDENT] and Mrs [RESPONDENT] trading as [NAME] [RESPONDENT] is payable when an Employment Tribunal makes an award or determination requiring one party to proceedings to pay a sum of money to another party, apart from sums representing costs or expenses.
No interest is payable if the sum is paid in full within 14 days after the date the Tribunal sent the written record of the decision to the parties. The date the Tribunal sent the written record of the decision to the parties is called the relevant decision day.
Interest starts to accrue from the day immediately after the relevant decision day. That is called the calculation day.
The rate of interest payable is the rate specified in section 17 of the Judgments Act 1838 on the relevant decision day. This is known as the stipulated rate of interest.
The Secretary of the Tribunal is required to give you notice of the relevant decision day, the calculation day, and the stipulated rate of interest in your case. They are as follows:
the relevant decision day in this case is:17 April 2026
the calculation day in this case is: 18 April 2026
the stipulated rate of interest is: 8% per annum.
[NAME] For the Employment Tribunal Office
Case No. 2400240/2025
GUIDANCE NOTE
1. There is more information about Tribunal judgments here, which you should read with this guidance note: www.gov.uk/government/publications/employment-tribunal-hearings- judgment-guide-t426
If you do not have access to the internet, you can ask for a paper copy by telephoning the Tribunal office dealing with the claim.
2. The payment of interest on Employment Tribunal awards is governed by The Employment Tribunals (Interest) Order 1990. Interest is payable on Employment Tribunal awards if they remain wholly or partly unpaid more than 14 days after the relevant decision day. Sums in the award that represent costs or expenses are excluded. Interest starts to accrue from the day immediately after the relevant decision day, which is called the calculation day.
3. The date of the relevant decision day in your case is set out in the Notice. If the judgment is paid in full by that date, no interest will be payable. If the judgment is not paid in full by that date, interest will start to accrue from the next day.
4. Requesting written reasons after you have received a written judgment does not change the date of the relevant decision day.
5. Interest will be calculated as simple interest accruing from day to day on any part of the sum of money awarded by the Tribunal that remains unpaid.
6. If the person paying the Tribunal award is required to pay part of it to a public authority by way of tax or National Insurance, no interest is payable on that part.
7. If the Secretary of State has claimed any part of the sum awarded by the Tribunal in a recoupment notice, no interest is payable on that part.
8. If the sum awarded is varied, either because the Tribunal reconsiders its own judgment, or following an appeal to the Employment Appeal Tribunal or a higher court, interest will still be payable from the calculation day but it will be payable on the new sum not the sum originally awarded.
9. The online information explains how Employment Tribunal awards are enforced. The interest element of an award is enforced in the same way.
📊 How courts decide similar cases
Among 12 similar decisions in this collection:
- Employment Tribunal Employment Tribunal Rules Wrongful Dismissal Due to Unpaid Notice Pay
- Employment Tribunal Unlawful Wage Deduction: Employer Ordered to Repay Worker
- Employment Tribunal Employment Tribunal Rules Employer Must Pay Unpaid Wages and Notice Pay
- Employment Tribunal Employment Tribunal: Employer Liable for Unauthorised Wage Deductions
- Employment Tribunal Employment Tribunal Rules in Favour of Claimant: Damages Awarded for Unpaid…
- Employment Tribunal Disabled Worker Wins Discrimination Case Against Employer
- Employment Tribunal Unauthorised Wage Deductions: Claimant Wins Compensation at Employment Trib…
- Employment Tribunal Claimant Wins Compensation for Unpaid Wages and Holidays
- Employment Tribunal Disability Discrimination: Job Rejection Allowed, Dismissal Claims Out of T…
- Employment Tribunal Employer Partially Liable for Unlawful Wage Deductions in Employment Case
- Employment Tribunal Employment Tribunal Allows Unfair Dismissal Claim Against an Online Retaile…
- Employment Tribunal Employment Tribunal Dismisses Race Discrimination and Whistleblowing Claims
A snapshot of this collection — not a prediction of your case's outcome.
⚖️ What tends to weigh in cases like this
✅ Tends to be accepted
- The employer made unauthorised wage deductions.
- The employer breached contractual notice periods.
- The employer failed to comply with statutory requirements for payment of wages and holiday entitlements.
- The employer did not provide a safe working environment as required by health and safety regulations.
- The employer dismissed an employee without a fair reason or proper procedure.
Patterns observed in similar cases in this collection — every case is unique.
❓ Frequently asked questions
What did this decision decide?
The decision ruled that the employer must repay unlawfully deducted wages from the employee's paychecks.
Who was involved?
An employee and their employer were involved in a dispute over underpaid national insurance and income tax.
How did the court decide, and why?
The court decided based on s.12(4) of the Employment Rights Act 1996, which requires employers to pay back any unlawfully deducted wages.
Which laws or rules were applied?
s.12(4) of the Employment Rights Act 1996 was applied.
What was the argument that mattered most?
The argument that mattered most was whether the deductions made by the employer were lawful under employment law.
Was the decision for or against the person who brought the case?
The decision was in favour of the employee.
What does this mean for someone in a similar situation?
If an employer unlawfully deducts wages, employees can seek to recover these amounts through an Employment Tribunal.
What evidence or documents mattered?
Evidence showing that the deductions were unlawful and documentation of the underpaid national insurance and income tax would have been important.
Can a decision like this be appealed?
Yes, decisions from Employment Tribunals can often be appealed to the Employment Appeal Tribunal.
Is it worth getting a solicitor for a case like this?
It is advisable to seek legal advice from a qualified solicitor for such cases.