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Forfeiture of wages clause held invalid…
An employee was injured at work and unable to resume work due to the injury. He put in his notice and was unable to work out the notice period. The employee withheld his holiday pay owing on the basis of a forfeiture clause for failure to work out the notice period.
The Employment Relations Authority upheld the employee’s personal grievance and ordered the withheld wages to be paid.
The forfeiture clause here was being imposed as an illegal penalty and it was not a genuine estimate of extra costs from an employee failing to work out his notice. Here the employee was injured and unable to work, and he had not deliberately left the employer in the lurch.
Before enforcing a forfeiture clause, an employer needs to have been put to extra expenses by the lack of notice e.g. hiring a replacement at a greater cost due to short notice.
An employer cannot make a profit by holding back wages when extra expenses have not been incurred, and also cannot hold back wages where there is no fault by the employee.