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Digital payslips and the right to an itemised pay statement: what HR needs to know
Adrian Fryer
A recent Employment Appeal Tribunal (EAT) decision provides useful guidance for employers that have moved to digital-only payslips.
In Leedham v Royal Mail Group, the EAT confirmed that an employer can satisfy its legal obligation to provide an itemised pay statement electronically, provided the payslip is genuinely accessible to the worker.
The case is a helpful reminder of what section 8 of the Employment Rights Act 1996 requires—and the potential risks for employers that fail to comply.
What does section 8 say?
Section 8 of the Employment Rights Act 1996 gives workers and employees the right to receive an itemised pay statement on or before each payday.
The statement must include:
- the gross amount of wages or salary;
- the amounts and purposes of any variable deductions;
- the net amount payable; and
- where pay is paid in different parts, the amount and method of payment for each part.
The purpose of the legislation is to ensure transparency, enabling workers to understand how their pay has been calculated and to identify and challenge any incorrect deductions.
What happened in Leedham?
Royal Mail had replaced paper payslips with digital versions that employees could access through a smartphone app or web browser.
Mr Leedham argued that Royal Mail had failed to “give” him an itemised pay statement because he had not received a physical document. However, the EAT rejected that argument.
The EAT held that the word “given” should be interpreted in a practical and purposive way. The key question is whether the employee can genuinely access the information. On the facts, Mr Leedham had a smartphone, could access the system free of charge, and faced no practical barriers to viewing his payslips.
As a result, Royal Mail had complied with its obligations under section 8.
A note of caution for employers
The EAT was careful to emphasise that each case will depend on its facts.
An electronic payslip system may not satisfy section 8 if employees face genuine barriers to access. Examples could include situations where employees do not have suitable technology, incur costs in accessing the information, or face other practical difficulties that prevent them from viewing their payslips.
For HR teams, the lesson is clear: moving to digital payslips is unlikely to create legal difficulties in itself, but employers should ensure that all workers can reasonably access the information provided.
What happens if an employer fails to provide a payslip?
Workers can bring a claim in the employment tribunal where an employer has failed to provide an itemised pay statement, or where the statement does not contain the required information.
Importantly, the tribunal’s powers are limited. Unlike many employment claims, there is no standalone award of compensation simply because a payslip has not been provided.
Instead, the tribunal can make a declaration and, where deductions have not been properly explained, may order the employer to pay a sum representing any unnotified deductions made during the 13 weeks immediately preceding the claim.
While the financial exposure may therefore be relatively limited, a failure to provide compliant payslips can create unnecessary employee relations issues, increase the risk of wider disputes about pay, and attract unwelcome scrutiny during other employment proceedings.
Practical steps for HR
Employers using electronic payslips should review their arrangements to ensure that:
- Payslips are available on or before payday;
- Employees are aware of how to access them;
- Access is free and straightforward;
- Alternative arrangements are considered where an individual employee faces genuine difficulties; and
- Payroll and HR teams understand the statutory requirements.
The decision in Leedham reflects the reality of modern workplaces. Electronic payslips are capable of meeting the requirements of section 8, but only where employers ensure that access is genuine, practical and effective.