Deduction of Salary for Damaging Company Properties

In the course of employment, an employee accidentally broke a vase bought by the company for “Feng Shui” purposes while doing his cleaning duties. The value of the vase stood at $10,000, and it was instructed to deduct the amount from the employee’s salary. As the employee earned $2,300 a month, they planned to recover the full amount in installments. The question is, can they do that?

At a moment, I was thinking what is the difference between company properties and company goods. I would say company goods are items that are to be sold, or given to clients, whereas company properties, which can also include the former, include also items that are considered assets that are meant to be used by the company itself?

As far as I interpret the terms in the Employment Act, if the employee is covered, it might not be legal (under the Act) to recover the amount. It is mentioned that we can deduct if – due to negligence – the employee damaged / lost the company goods entrusted expressly to him, amount to be caped at 25% of the employee’s salary. Prior to the deduction, the employee must be given an opportunity to raise his cause against it.

Am coming from the point that the vase is a company property, and not a good. Further, even if it is arguable that he shall be responsible, the amount to recover must be within the cap, and in 1 lump sum payment – recovering in installments is not allowed.

What do you think?

EA Statute (Part III, Section 27(1b)


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