Mr J from Co Wicklow is annoyed that his employer recently switched from paying his staff by cheque to the electronic "paypath" method by which salaries are paid directly to the employee's bank account. "Can an employer do this against the wishes of the employee on the grounds of security, efficiency, etc.? Can it be done without fully consulting the staff?"
Direct lodgements of salaries into bank accounts is becoming standard practice with many companies, large and small.
It saves considerable time, effort and money on the part of company accounts offices once it is set up and banks prefer it too, since it requires far less manhours to process electronic transmissions.
Bank staff are no longer tied up cashing and depositing workers' money every week or month. Security issues were one of the main reasons why the system was developed by the banks in the first place and electronic paypaths have helped cut the number of armed raids on accounts offices on payday. Less cash is physically being moved, cutting down on raids on security trucks.
Mr J doesn't say why he would prefer to be paid by cash or cheque, but unless this preference is written into his contract of employment, his employer, under the Payment of Wages Act 1991 is obliged to pay his employee "a readily negotiable mode of wage payment". The list of payment methods includes cheque, credit transfer, cash, postal/money order and bank draft.
Workers who were paid by cash or other methods before January 1st, 1992 (and had it written into their contracts or collective agreements) when the new Act came into effect were given a transitional period in which to negotiate a new method of payment and could continue to be paid cash.
Meanwhile, Mr C from Dublin 6 cannot understand how the banks "take no less than five days to clear a cheque". He says "this seems unnecessary and indeed unbelievable in this era of widespread IT networks, instant, worldwide communications and electronic fund transfers, among other developments. Would it be possible for your column to take the initiative to get all the retail banks to agree to reduce this period to perhaps 24 hours?"
We'd like to thank Mr C for his vote of confidence in Family Money, but the banks themselves agree that five days to clear a cheque is far too long.
"Three working days is more like it," said a bank spokesmen, "though it could take five days if the cheque was only deposited on a Friday because of the intervening weekend".
Annoying as a long cheque clearance is, the banks say that cheques that are not written from an account in the same branch must be physically handled and moved between the banks, a fairly mammoth task at the best of times. The exception is AIB which introduced an electronic-based, same day inter-AIB branch cheque clearance system over the last 18 months.
It has experienced hiccups, but does mean that someone depositing an AIB cheque written on an AIB branch account in Dublin into their AIB account in say, Tralee, will have the funds in their account within 24 hours. The cheque writer will similarly find the same amount debited from their own account within the same time. "Electronic and Internet banking is the ultimate solution," said the Bank of Ireland spokeswoman. You can pay many bills directly from account to account over the phone right now, she said, and credit transfers can be easily arranged this way.
"Mind you, not everyone is unhappy that it takes three or even five days to clear a cheque. But these are usually the customers who have written it," the spokeswoman said.
Suggestions welcome
Family Money welcomes suggestions from readers on topics of personal finance they would like to see highlighted. Please write to Jill Kerby, c/o The Irish Times, 11-15 D'Olier Street, Dublin 2 or by Fax No. 6798874 or e-mail: jmkerby@indigo.ie
