Home - What happens if an employee who has resigned ‘owes’ us leave hours?
October 17, 2019 on chapter Resignation

An employee has resigned and she owes hours for annual leave taken in advance. She also currently owes hours she has taken off work but still received payment for (no leave entitlements used). She has been working additional hours without pay to make up this time. Are we able to deduct this from her final pay? If the leave taken in advance is more than the final pay, is there an enforceable loan that the employee has to repay?

Under the Fair Work Act 2009 (Cth), you are not able to make a deduction from the employee’s payment without written authorisation to do so.

We suggest you write to the employee explaining the shortfalls and the specific amounts, so it is clear to the employee what she owes. You can suggest to the employee to repay the amount to you directly or alternatively, the company can deduct it from her final pay and she can repay any remaining excess should there be any. If the employee chooses the second option, you should ensure their consent to the deduction is in writing (an email is fine).

The overpayment is likely to be an enforceable debt, so if the employee does not agree to repay the money, you could choose to recover the debt through the courts. However, this can be an expensive process. If you choose to recover through the courts, we suggest you seek formal advice. It may be more commercial to write off the loss.


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