How to Make a Claim for Unpaid Wages

A claim for unpaid wages arises when an employer fails to pay money that is properly owed under an employment contract or under statutory rights. This may include unpaid salary, underpaid wages, overtime, holiday pay, commission, or deductions made without lawful authority.

In England and Wales, most unpaid wages claims are brought either as an unlawful deduction from wages claim under the Employment Rights Act 1996 or as a breach of contract claim in the civil courts or employment tribunal. The correct route depends on the employment status of the worker and the nature of the dispute.

The legal framework is designed to ensure workers receive payment for work already performed, and disputes are resolved through structured procedures involving internal resolution, Acas early conciliation, and, where necessary, tribunal proceedings.

What Counts as Unpaid Wages

Under UK employment law, “wages” is broadly defined and includes:

• Basic salary or hourly pay
• Overtime pay (contractual or regularly expected)
• Holiday pay under the Working Time Regulations 1998
• Statutory sick pay
• Commission (where contractually due)
• Bonuses (where contractually guaranteed)
• Notice pay

Unpaid wages can arise in several ways:

• No payment at all for work completed
• Partial payment (underpayment)
• Late payment causing financial loss
• Unauthorised deductions from pay

A key legal concept is “unlawful deduction from wages” under section 13 of the Employment Rights Act 1996, which prohibits deductions unless authorised by statute, contract, or prior written consent.

Legal Basis for Claiming Unpaid Wages

Unlawful deduction from wages

Most claims are brought under the Employment Rights Act 1996, where a worker argues that:

• Wages were properly payable, and
• The employer failed to pay them or deducted them without legal authority

Employment tribunals can order repayment of the withheld amount.

Breach of contract

Where the claim does not fall within tribunal jurisdiction (for example, some post-employment claims), a breach of contract claim may be brought in the civil courts.

National Minimum Wage issues

If wages fall below the statutory minimum, enforcement may also involve HMRC or tribunal claims under the National Minimum Wage framework.

Step 1: Identify What Is Owed

Before starting a claim, it is necessary to calculate the unpaid amount precisely.

This typically involves:

• Reviewing payslips
• Checking employment contract terms
• Comparing hours worked with hours paid
• Identifying deductions or missing payments
• Confirming entitlement to bonuses or commission

Where there are repeated underpayments over time, these may form a series of deductions, allowing a claim to cover multiple pay periods if brought within time limits.

Step 2: Raise the Issue Informally

Most disputes begin internally. Common approaches include:

• Speaking to payroll or HR
• Writing to the employer requesting correction
• Submitting a formal grievance

Although not legally required, internal resolution is often expected before escalation.

However, internal procedures do not normally stop limitation deadlines from running.

Step 3: Acas Early Conciliation

Before bringing most tribunal claims, the claimant must notify the Acas and enter early conciliation.

Key features:

• Mandatory step before most tribunal claims
• Temporarily pauses the limitation period
• A conciliator may contact both parties
• Settlement may be recorded in a binding agreement (COT3)

If settlement is not reached, Acas issues a certificate number required for the tribunal claim.

Step 4: Employment Tribunal Claim (ET1 Form)

Most unpaid wages claims are submitted to the Employment Tribunal using an ET1 claim form.

Information required includes:

• Employer and employee details
• Dates of employment
• Description of unpaid wages
• Breakdown of amounts owed
• Supporting evidence (payslips, contracts, bank records)
• Acas early conciliation certificate number

The claim should clearly explain how the amount has been calculated.

Step 5: Time Limits for Unpaid Wages Claims

Strict deadlines apply.

For unlawful deduction from wages claims:

• Usually 3 months minus 1 day from the date of the underpayment or deduction
• Where there is a “series of deductions”, time runs from the last deduction in the series

Time limits are strictly enforced, although they are paused during Acas early conciliation.

Missing the deadline can result in the claim being rejected unless exceptional circumstances apply.

Step 6: Employer Response (ET3)

Once the claim is submitted, the employer must respond using an ET3 form.

The response typically sets out:

• Reasons for non-payment or deduction
• Contractual justification (if any)
• Evidence supporting the employer's position

If the employer fails to respond, the tribunal may still proceed based on available evidence.

Step 7: Tribunal Process and Hearing

If the case proceeds, the tribunal will:

• Review documents and witness statements
• Hold preliminary hearings if needed
• Examine payroll and contractual evidence
• Hear oral evidence at a final hearing

The tribunal decides whether wages were lawfully owed and whether the employer acted unlawfully in withholding payment.

Remedies for Unpaid Wages Claims

If a claim succeeds, the tribunal may order:

• Payment of unpaid wages
• Repayment of unlawful deductions
• Interest on unpaid sums
• Reimbursement of holiday pay or commission
• In some cases, additional compensation linked to financial loss

There is generally no upper cap on recovery for unpaid wages themselves.

Alternative Routes for Recovery

HMRC enforcement (National Minimum Wage)

If the issue involves minimum wage breaches, HMRC may investigate and enforce repayment.

County Court claim

Some contractual wage disputes may be brought in the civil courts, particularly where tribunal jurisdiction is limited.

Settlement through Acas

Many disputes resolve before a hearing through negotiated settlement.

Common Issues in Unpaid Wages Claims

Disputed contractual entitlement

Employers may argue:

• Bonuses are discretionary
• Overtime was not authorised
• Commission was conditional

Incorrect classification of worker status

Some claims depend on whether an individual is legally an employee or worker.

Time limit disputes

Tribunals frequently assess whether claims are out of time or form part of a continuous series.

Lack of documentation

Claims often succeed or fail based on payslips, contracts, and written communication.

Practical Considerations

• Keep full records of all pay and hours worked
• Act quickly due to strict limitation periods
• Ensure calculations are clear and consistent
• Identify the correct employer legal entity
• Use structured evidence rather than informal summaries

Common Questions from our Readers

Can I claim unpaid wages after leaving a job?

Yes. Claims can be brought after employment ends, subject to time limits.

Do I need a solicitor?

Not required. Individuals can bring claims directly, although legal representation may assist in complex disputes.

What if my employer cannot pay?

A tribunal judgment can still be enforced through enforcement mechanisms, including court enforcement procedures.

Can I claim for multiple months of underpayment?

Yes, if the underpayments form a continuous series linked by the same issue.

Final Thoughts

Making a claim for unpaid wages involves identifying the exact amount owed, attempting internal resolution, and then progressing through Acas early conciliation before submitting an ET1 claim to an employment tribunal. The legal basis is primarily unlawful deduction from wages under the Employment Rights Act 1996. Strict time limits apply, and evidence such as payslips and contracts is essential to support the claim.

Where successful, tribunals can order full repayment of unpaid sums and related financial losses.