Employers are not debt Collectors

Sheila Nash

Jun 11 • Law

This has been forwarded to me and in case it's useful for some, here it is:

Your employer isn't a debt collector. Send them this and follow through if they don't cease..

[Your Name]

[Your Address]

[City, Postcode]

[Date]

To: [Employer's Name / HR Department]

[Company Name]

[Company Address]

Subject: Formal Notice – Unlawful Wage Deductions for Alleged Council Tax Arrears

Dear [Employer's Name],

I write to formally put you on notice that any deductions from my wages relating to alleged council tax arrears claimed by [Council Name] are unlawful unless and until the council provides clear and lawful evidence of their entitlement to enforce such deductions.

Legal Framework Governing Wage Deductions

1. The Requirement for a Legally Executed Liability Order

In Leighton v Bristow and Sutor [2023], the High Court reaffirmed that enforcement actions, including wage deductions, cannot proceed without a valid and properly executed Liability Order issued by a Magistrates’ Court. Such an order must:

• Be properly executed, bearing the court’s official seal and the signature of an authorized officer; and

• Clearly specify the liability in question.

Without a valid Liability Order meeting these statutory requirements, any attempt to enforce the alleged debt is rendered unlawful under the Council Tax (Administration and Enforcement) Regulations 1992.

2. Employer Obligations Regarding Wage Deductions

Under the Employment Rights Act 1996 (Section 13), deductions from an employee’s wages are only lawful if:

• Required by statute; or

• Made with the express consent of the employee.

In this case, the statutory basis for deductions hinges entirely upon the existence of a valid Liability Order. Without such an order, deductions are unlawful, as established in Southfield v British Telecommunications plc [1998] IRLR 18.

Employers must also act reasonably to verify the lawfulness of deductions. As stated in Cambridge and County Developments (Contractors) Ltd v Hughes [1973] QB 522, an employer is under a duty to investigate the validity of any purported statutory authority before acting on it.

3. Employer Liability for Unlawful Deductions and Data Breaches

Should [Company Name] proceed with deductions without verifying the existence of a legally executed Liability Order, the company may be liable for:

• Unlawful deductions, in breach of the Employment Rights Act 1996;

• Compensation for distress and anxiety, arising from financial hardship caused by such deductions, as exemplified in Southfield v British Telecommunications plc [1998] IRLR 18;

• Breaches of data protection laws, if deductions are based on unlawfully processed or shared personal information, in contravention of the UK GDPR and the Data Protection Act 2018.

Further, if the council’s request for an Attachment of Earnings Order was made without a legally executed Liability Order, this raises additional concerns under the GDPR. Both the council and [Company Name] could be liable for:

1. Unlawful processing of my personal data, in violation of Article 6(1)(c) of the GDPR, which requires a lawful basis for data processing.

2. Failure to protect my personal data, under Article 32 of the GDPR, which mandates appropriate security measures to prevent unlawful processing.

3. Breach of confidentiality, if my personal data was acted upon or shared without sufficient verification of the legal basis for its use.

These breaches expose the company to complaints to the ICO and legal claims for compensation for non-material damages, such as anxiety and distress caused by the unlawful processing of my data.

4. Criminal Implications of Unlawful Deductions

Deducting wages without lawful authority may also amount to theft, contrary to the Theft Act 1968, as it involves dishonestly depriving me of my earnings without proper justification.

Action Required

To avoid legal liability, I respectfully demand that [Company Name]:

1. Suspend all deductions: Cease all wage deductions relating to the council tax arrears until [Council Name] provides a valid and legally executed Liability Order, bearing:

o The official seal of the Magistrates’ Court; and

o The signature of an authorized officer on court-headed paper.

2. Verify compliance: Confirm with [Council Name] that they have fulfilled the legal requirements under the Council Tax (Administration and Enforcement) Regulations 1992, and provide me with written proof of such compliance.

3. Pause further action: Refrain from any further deductions or actions until this matter is resolved through lawful means.

Consequences of Non-Compliance

Failure to comply with this notice will result in the following actions:

1. I will file a formal complaint with the Employment Tribunal under the Employment Rights Act 1996 for unlawful wage deductions.

2. I will pursue a civil claim for damages, including compensation for anxiety, financial harm, and unlawful data processing under the UK GDPR.

3. I will refer the matter to relevant regulatory authorities, including the ICO and HMRC, if there is evidence of systemic non-compliance with statutory deduction requirements.

Confirmation of Receipt

Please confirm receipt of this letter and provide a detailed response outlining your intended course of action within 3 days of the date above. Failure to comply with this notice will leave me with no option but to take immediate legal action to protect my rights.

Yours faithfully,

[Your Full Name]

Sent from my iPhone

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Employers are not debt Collectors