Can an employer withhold all or part of an employee's final wage if they terminate their contract without notice?
Employees who fail to give notice or give less notice than they are contractually obliged to do will be acting in breach of contract and potentially could be sued for damages for any loss suffered by the employer. However, from a practical point of view, employers rarely see the prospect of taking legal action against a former employee in these circumstances as being practical or cost effective. In such circumstances, the issue arises as to whether the employer could withhold all or part of the employee's final wage.
Whether or not an employer can withhold all or part of the employee's final wage in these circumstances will depend, in practice, upon whether there is a term in the employee's contract of employment permitting them to do so. Without such a clause, the employer will not be entitled to make any such deduction.
A well-drafted specific clause in a contract of employment that does not amount to a penalty clause will enable the employer to make the deduction.