NSW Debt - Previous Employer Withholding Pay - Legal Under Employment Law?

[billiebella]

Hello

My previous employer loaned me approx. $9000 to pay off a debt for uni. It was agreed in an email to her and her accountant that I would pay this amount back at $300/month, with the potential of it increasing on Jan 16, depending on circumstances. This was the only agreement put in place.

I have just receive an email from her stating that she wants to withhold my last months pay, and wants the remaining debt to be paid off by the end of today.

My questions are:

1. Can she withhold my last pay to pay this debt off under Employment Law?

2. If there was no agreement besides the $300/month repayment, does she have any other legal standing in terms of repayment?

3. Can you get paid/owed overtime on a salary? I worked overtime and quite late at night on numerous occasions.

I left the job due to duress and her threatening me, not due to termination in Jan 2016.

 

[Rod]

1. Can she withhold my last pay to pay this debt off?

Not legally.

2. If there was no agreement besides the $300/month repayment does she have any other legal standing in terms of repayment?

Unlikely. She will more than likely say she told you that if you leave you need to pay the loan back in full when you leave but if that is not written down anywhere and agreed to then her chances of success are reduced.

3. Can you get paid/owed overtime on a salary? I worked overtime and quite late at night on numerous occasions.

I left the job due to duress and her threatening me, not due to termination in Jan 2016.

It is possible. Need to look at your employment agreement agreement to see what it says about overtime and reasonable hours.

 

[billiebella]

Thanks Rod,

If I continue to pay the agreed monthly amount, would she have any other legal standing? As I cannot afford to pay the lump sum.

Not legally.



Unlikely. She will more than likely say she told you that if you leave you need to pay the loan back in full when you leave but if that is not written down anywhere and agreed to then her chances of success are reduced.

It is possible. Need to look at your employment agreement agreement to see what it says about overtime and reasonable hours.

 

[Rod]

You appear to have a simple contract. The question becomes one of whether an implied term can be construed from the discussions and or correspondence that says the loan must be repaid in full if employment ceases. Not being a party to the discussions and not having seen the correspondence, it is hard to give a definitive answer. Sometimes in contract law, what appears to be a little fact or action can make a large difference to the outcome.

Note that I don't have at hand any precedents which would influence my answer. Precedents in contract law are important as most of contract law is common law.

 

[Serge Gorval]

Hi Billebella

There're 2 issues here.

Employment Law

Under the Fair Work Act, which I assume would apply to you unless you fall outside its gamut, your employer cannot withhold your pay or entitlements unless that deduction is a permitted deduction. A personal loan to help you pay your debts is not a permitted deduction.

You are entitled to your full pay and entitlements if any.

Debt Recovery.

Your former employer can always file a claim in the local court ( General Division) for recovery, regardless whether you pay or not pay and truth be told, if I were her I'd file and serve you with a claim pronto!

I suspect that it will be relatively easy to establish the cause of action in this case and she would have sufficient evidence to show that money way transferred to you on the basis part express/ part implied agreement.

To avoid further debts being incurred, you should suggest entering into a deed in which you can negotiate and agree payment terms, etc.