If an employee uses their E-tag for personal use and the employer has not agreed to cover the cost of that personal use, can the employer deduct the value of that personal use from the employee’s wages? If not, can the employer issue the employee with an invoice to repay the value of the personal use?
The Fair Work Act 2009significantly limits the circumstances in which it will be lawful for an employer to make deductions from employee wages.
It will be lawful, however, for an employer to rely on terms within a contract of employment (or a modern award or enterprise agreement) that permit an employer to deduct an amount from employee wages where the deduction is for the purpose of recovering costs directly incurred by the employer as a result of the voluntary private use of particular property of the employer by an employee (whether authorised or not).
Examples of such costs are set out in regulation 2.12 of the Fair Work Regulations. Such examples include the cost of items purchased on a corporate credit card, the cost of personal calls on a company mobile phone and the cost of petrol purchased for the private use of a company vehicle by an employee.
Deductions for the cost of personal use of E-tags (or for any road tolls) are likely to fall within the scope of regulation 2.12. This means that if an employer has a term in a contract, modern award or enterprise agreement as set out above, then they will likely be able to use it to deduct the value of the personal use of the E-tags from the employee’s wages.
If the employer does not have any such term that they can rely on, then it would be best practice for the employer to have a policy in place regulating the repayment of personal use amounts.
Such a policy should state that personal use of E-tags must be repaid. The policy should also outline the procedures to make repayments (such as by the employee depositing the amount into an employer bank account). The use of a policy in these circumstances would help to avoid any confusion or disputes at the time that the employer requests the repayment.
If no such policy exists, the employer can still issue the employee with an invoice to repay the value of the personal use if the employer had not previously agreed to cover this cost. Alternatively, the employer may choose to write the employee a letter asking them to repay the relevant amount.
For more information about permitted deductions from employee monies, please call the Ai Group Workplace Advice Line on
1300 55 66 77.
Clinton is the Publications Manager at the Australian Industry Group.
He is responsible for a number of key services including Annotated Modern Awards, Workplace Relations Handbooks and the management of Ai Group’s HR and Health & Safety Resource Centres.
Clinton has a master's in Employment Relations and previously held advisory roles with the Workplace Authority and Department of Employment and Workplace Relations.
