I have an employee who is known to gamble and has asked me for an advance in wages. If I do, I feel like I am encouraging him. What should I do?

When it comes to advance payments, check your contractual documentation for any ‘advance wages policy you may have. If you do, you should ensure that you stick to its provisions so that staff cannot complain about differential treatment.

Many employers take steps to implement employment contracts with clauses concerning the arrangements on salary advances, loans and the repayment of these. Such a clause may state the employee is not automatically entitled to advances based on a repayment of such or they may state that the decision as to the making of an advance is at a manager’s discretion.  If such a clause exists then this allows you flexibility, as a manager, to decline this request based on your previous information, such as the fact that he gambles and you do not want to encourage this.

If there isn’t a contractual term you need to identify whether, as a business, you have implemented an implied term in to employment contracts based on previous practice. There would be such an implied term if, previously, the business has always allowed wage advances, wage advances had never been refused or even where someone had asked for a wage advance without a reason, and no reason had been requested, the advance was subsequently approved. If this has consistently happened within the business then it could be said that allowing wage advances without flexibility has become ‘custom and practice’ so this current request should be approved. However, similarly, if you can show that it had become custom and practice to ask for reasons for advance requests, and that it was at manager’s discretion to approve or decline requests based on said reason, this would allow you to deny this advance based on such being an implied term.

If no previous requests have been made to support an implied term, and there is no contractual term on wage advances, then there is no obligation to allow this salary advance. But again, remember that this refusal, and using previous knowledge to support your refusal, may be used to create an implied term in the future.

For further clarification please contact the Peninsula Advice Service on 0844 892 2772