If an employee fails to return corporate property eg laptop, clothing, mobiles phone etc, is it permissible to deduct the value of the equipment from their final salary?
The ability to make deductions from salary depends on what is written within your contract. This applies to final salary just as much as to any other salary payment.
Deductions in relation to corporate property can only be made if the right to deduct for this is contained within a relevant part of the contract or if the employee has given their agreement in writing to the making of this deduction before it is made.
Some employees believe that if they have not signed the contract then the deduction cannot be made. This isn’t correct. Provided the employee has been given details of this clause in writing that is sufficient. It is, however, always preferable to have their signed agreement.
Many companies require employees to sign for company property and the documentation specifically records an agreement by the employee for the company to recover the value of their property in the event that it is not returned. This should be sufficient to constitute an agreement to the deduction. Check if the term specifically allows for recovery from final salary. If it does then the deduction can be made.
In order to avoid any difficulties it is often best to write to the employee in advance highlighting what needs to be returned and what the charge will be in the event that the property is not returned. Set out that it is the intention to recover these amounts from final salary in accordance with the terms unless an alternative is agreed.
See also: Employee perks on the rise