Business Category Business: career motivation and tips to move ahead

What happens if an employer doesn't pay you on time?

If an employer pays you late, it can cause a great deal of stress.

It can even end up costing you money, such as in overdraft fees or other unanticipated borrowing. There are laws and guidelines in place which should help you if you find yourself in this difficult position.

Breach of contract

When you agree to work for an employer you will be offered a written contract or agreement.

According to the Employment Rights Act (1996) an employer ought to provide a written agreement detailing your terms of employment within the first two months of your employment.

The terms of your employment will include details about how much you are paid, and how often, and when; for example, on the last day of each month, or Friday of each week. If your employer does not pay you according to the terms of the agreement, then he or she is in breach of contract.

Constructive dismissal

If your employer has not provided you with a written agreement detailing the terms of your employment, and refuses to give you one, an Employment tribunal can force your employer to provide one.

Assuming you do have a written agreement, and your employer is consistently in breach of that contract by repeatedly paying you late, there are several options available to you. One option is to resign. If you have to resign because your employer is in breach of contract, you do in fact have the right to make a claim against your employer for constructive dismissal.

Submitting a grievance

If you decide on this course you should first submit a grievance to your employer and await a response. This will help you in the event of a claim, and will maximise your chance of securing full compensation should you be awarded it.

Your employer should have a grievance procedure that you can follow; usually you will be required to meet with your employer after submitting a written letter detailing your grievance. For more information on submitting a grievance you should contact the mediation service ACAS, which provides free advice and literature on solving problems in the workplace.

Seeking compensation

If you choose not to resign but to remain in your employment, there are other courses of action available. The first thing you should do is to talk to your employer, and try to sort things out informally. If this fails, you are entitled to pursue compensation from your employer even if you remain in work.

If you wish to pursue this course of action you are advised to seek impartial advice from your union, the Citizen's Advice Bureau and ACAS, and even a solicitor. It is always better to try to resolve the situation amicably, but if your employer is in breach of contract then you will find the law is on your side.