Electronic payslips satisfy statutory requirements
The EAT has confirmed that employers can provide payslips electronically, provided employees can access them without practical barriers.
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Background
In Leedham v Royal Mail Group Ltd, the Employment Appeal Tribunal (EAT) considered whether providing employees with online-only payslips satisfied an employer's duty under section 8 of the Employment Rights Act 1996 to give workers an itemised pay statement.
Decision
Royal Mail had replaced paper payslips with a digital system, allowing employees to access their payslips through an app or web browser. The claimant argued that simply making payslips available electronically was not the same as "giving" them to employees.
The EAT rejected that argument. It held that the purpose of the legislation is to ensure employees can understand how their pay has been calculated and identify any deductions, rather than to prescribe a particular method of delivery. Electronic payslips are therefore capable of satisfying the statutory requirement, provided they are reasonably accessible.
The EAT emphasised that this will depend on the facts of each case. An electronic system is likely to be compliant where employees can access their payslips free of charge, the employer has clearly explained how to do so, and there are no significant technical or practical barriers. By contrast, a system which imposes material costs, creates genuine obstacles to access or fails to accommodate employees who cannot use the digital system may not meet the statutory requirement.
The EAT also noted that requiring employees to use their own smartphone or similar device will not, by itself, prevent an employer from complying with its obligations. However, different considerations could arise where an electronic system involves tracking or extracting data from employees' personal devices, although that issue did not arise for determination in this case.
Learning points for employers
Most employers already issue electronic payslips, and this judgment provides welcome confirmation that this is lawful in principle. However, employers should ensure that all employees can access their payslips in practice and be prepared to offer alternative arrangements where an employee has a genuine difficulty accessing a digital system.
For more information or advice, please get in touch with Alice Mennell in our Employment team.
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