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|Legality Of Deductions From Exit Benefits by freeradical(m): 5:16pm On Jul 19, 2016
A colleague of mine got disengaged from his place of work of 5 years and is faced with an issue. The company is insisting on making certain deductions from his exit pay before final payment of d remnant sum. The deductions are balances of car grant and housing allowance upfront payed to him in January(dude was laid off in may).
Now note that it's a car grant and not a loan. The car grant is an agreed sum of money paid to junior level managers to enable then secure a vehicle. The amount is amortised over 4years and deductions made to reflect this and show balance on his payslip monthly. In essence no deductions are made from his basic pay for it. In the eventuality that you resign from the company then you pay the balance of the value. In my friends case he did not resign rather the company was downsizing and he was affected. For the housing upfront, the company usually pays housing allowance as a lump sum in January. So according to them, they will recover the balance from the exit benefits since he did not last the full course of the year with them.
So my question to the house if it is legally tenable considering the circumstances for the company to make such deductions from his exit benefit. If it is illegal to make such deductions how will you advise my friend to go about confronting the company to desist from their position. My friend is already considering taking legal action against them.
Mods please help move to front page. We need all d expert advice we can get
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