Over payment of wages

[Paper_Tyger]

I currently work for my employer part time, I recived my P60 in the end of june and noticed that I had been paid more than I expected in the last financial year. On phoning payroll It turns out that when I last had my hours increased instead personnel had put in the paperwork that I now work 37.5 hour per week which technicaly I do, but term time only. This has ment that since january Ive been paid full time though I only work part time.

last month I was over paid again despite having informed personnel and payroll and offering to payback £20 per month. since then Ive been told that they want the full sum repayed by the end of dec.
Yesterday as I had still not heared from personnell how much have been overpaid and how much i will have to loose per month I phoned payroll, who told me there was nothing on their file that I have been overpaid, and to forward them copies of the emails from personnell.

Ive now been informed I now owe 3100+ in overpayments and they will not be paying me any wages in july, and unless someone from personnel contacts them with a repayment plan I wont be getting any more wages untill the overpayments are reclaimed..........

anyone have any thoughts on this?

[paulgmb]

Hi,
You have been totally honest and up front with them and this is how they treat you!
It would be illegal for them to withold wages from you. It is there mistake and you have been honest enough to bring it to their attention. By law they have to agree a repayment schedule with you but it does have to be reasonable on both parties.

You say you are term time only, is your salary divided by 12?

Regards,

Paul.

[Paper_Tyger]

it is yes,
to make matters worse ( this is just the last in a long string of issues to do with getting my milage expences which has resulted in my only getting paid my expences this month backdated to june 07)
Ive applied for a job and when i just phoned up my manager to discuss this they have informed me the new <prospective> employer has asked my current employer for a reference before Ive even got the interview.

[chesham]

Do you have anything in your contract? Some contracts govern what happens when over or under payments are made to you. That may clarify what is right and what isn't. If you haven't got anything such as that, but they withold your wages, it could constitute a breach of contract, which would be enforcable at a tribunal (if it were to go that far).

Why not escalate it up and speak to someone at Director level (HR Director?) or Head of Department and have a formal meeting to discuss matters and clarify exactly what has happened. In addition, ACAS may help - Acas - How can we help?.

[Paper_Tyger]

Oh this just gets better, ive just been over the figures based on my letter stating my new salary after the increase in hours ( which is correct) and my pay slips and they have over calculated the ammount by 1462.41,

[BeauBrummie]

This is a bit of a mess!!

Firstly, your current employer must pay your current salary this month, if they do not then they will have broken employment legislation.

Secondly you can make it as difficult as you like to repay any monies overpaid, the only overpayments that you MUST repay are overpaid holiday entitlements where they have not been accrued (should not apply in your case). You still have to repay but at your convenience not theirs. So thay cannot DEMAND full repayment by Dec 08 (they can ask)

You should write to them officially raising the point that you disagree with their assessment of the overpayment amount

And finally your prospective new employer should not have phoned your current employer without your consent, did you give it on say the application form?

BB

[Paper_Tyger]

Ill have to check the application form when I get home but im 99% sure I ticked the do not contact box, but then I might not have, either way the damage is done now. more to the point they sent a letter asking, which is a bit rich as I dont even have a letter asking me to attend the interview, I only know because they emailed me yesterday, interview is monday.

[Sidewinder]

With all due respect to those saying that the employer cannot legally recover an overpayment of salary, this is not altogether true.

Whilst the Employment Rights Act gives an employee protection against unlawful deductions or non-payment of wages, the same Act also gives an employer an absolute right to recover salary overpayments at whatever rate they see fit. The ERA exempts overpayments of wages and there are no rules to dictate appropriate rates of repayment. Whilst good practice would suggest that significant overpayments should involve a discussion with the employee about a suitable repayment plan, this is by no means a rule.


The fact that the overpayment has occurred over a period of time and that you queried it may stand you in some stead to argue for a repayment plan, but you will need professional advice to confirm this. There is a defence of Estoppel which may apply, but for this defence to be valid, the case has to satisfy certain conditions:-

• the employer must generally have made a representation of fact which led the defendant employee to believe that he was entitled to treat the money as his own
• the employee must have, in good faith and without notice of the claim, consequently changed their position (eg spent the money)
• the employee must be innocent of fault in causing the overpayment
• the court must be satisfied that it would, on the facts of the individual case, be inequitable to order repayment

It might also be argued that for the employer to withold all salary until the overpayment has been rectified would be grossly unfair, and it may also constitute a breach of trust on the part of the employer which could give rise to a claim for constructive dismissal - however this would serve little purpose in terms of compensation.

Certainly you need to make a written representation to your employer to complain that since the overpayment was as a result of incompetence on their part and that the money has been innocently spent by yourself you consider it unacceptable to withold salary in order to recover the amount. Whilst you are quite prepared to agree a repayment schedule which you can afford, you simply cannot accept that you should now be put into debt as a consequence of their maladministration. There is already some dispute over the exact amount and this almost certainly needs some independant verification, and don't forget that there may also be tax implications - presumably you have paid tax and NI on the overpayment? How will that be accounted for?

[BeauBrummie]

Originally Posted by Sidewinder

certainly you need to make a written representation to your employer to complain that since the overpayment was as a result of incompetence on their part and that the money has been innocently spent by yourself you consider it unacceptable to withold salary in order to recover the amount. Whilst you are quite prepared to agree a repayment schedule which you can afford, you simply cannot accept that you should now be put into debt as a consequence of their maladministration. There is already some dispute over the exact amount and this almost certainly needs some independant verification, and don't forget that there may also be tax implications - presumably you have paid tax and NI on the overpayment? How will that be accounted for?

While agree with your post in general sidewinder, the fact is that paper-tyger has had a demand given to him with very little notice. He has to fight fire with fire and stand up for himself.
He did after all attempt to reconcile the overpayments situation with the payroll dept.

The Tax and NI situation should be dealt with as part of the settlement as HMRC will not want to be involved. The P60 reflects the actual payments of pay and tax, so albeit an incorrect amount from the employee point of view in HMRC eyes it is correct.

BB

[Sidewinder]

And I agree entirely with your opinion - he should use any method available to avoid losing an entire salary payment. He cannot though use the ERA to do this.

Firstly, your current employer must pay your current salary this month, if they do not then they will have broken employment legislation.
Secondly you can make it as difficult as you like to repay any monies overpaid, the only overpayments that you MUST repay are overpaid holiday entitlements where they have not been accrued (should not apply in your case). You still have to repay but at your convenience not theirs. So thay cannot DEMAND full repayment by Dec 08 (they can ask)

I felt that these statements was slightly misleading though. The employer holds all the aces at this stage. If they refuse a request for repayment by instalments, they can dictate whatever terms they like - they are the ones paying the wages (or not as the case may be) - the ERA gives them a complete getout from action under statute and no legal protection to the employee whatsoever.

Employment Rights Act 1996

S 13 Right not to suffer unauthorised deductions
(1) An employer shall not make a deduction from wages of a worker employed by him unless—
(a) the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker’s contract, or
(b) the worker has previously signified in writing his agreement or consent to the making of the deduction.

S 14 Excepted deductions
(1) Section 13 does not apply to a deduction from a worker’s wages made by his employer where the purpose of the deduction is the reimbursement of the employer in respect of—
(a) an overpayment of wages, or
(b) an overpayment in respect of expenses incurred by the worker in carrying out his employment,
made (for any reason) by the employer to the worker.

However - a formal grievance raised, citing unreasonable behaviour, placing the OP in financial hardship as a result of their mistake, and restating in writing that he can afford repayments over a period but not outright, would open the door for a future legal argument if neccessary on the grounds of a)disregard for statutory or their own contractual grievance procedures and b) Estoppel - a Court could decide that repayment in the circumstances should be over a period, or even not at all (although unlikely).

[BeauBrummie]

Thanks Sidewinder.....knuckles duly rapped!!!

BB

[Sidewinder]

Not at all - I get as indignant as everybody else when employees are treated unfairly - no employer should withold all wages to recover an overpayment in the circumstances described by the OP

[kutitap]

I think that it is totally not your fault. And that your employer should not impose on you to pay in full consequently not receiving a single cent for months until the over payment is paid full. If you have documented your review requests to the the finance department, that should be enough reason for them to consider having the over payment paid in terms.

[LinRod]

Can anyone advise me of the legal situation whereby an employer realises that an overpayment has been made after an employee has left and a P45 issued?

[BeauBrummie]

Originally Posted by LinRod

Can anyone advise me of the legal situation whereby an employer realises that an overpayment has been made after an employee has left and a P45 issued?

Linrod,

Firstly welcome to the CAG forums,

Perhaps a little more info is required, and also a suggestion would be to start your own thread, then others will take more notice and be able to advise.

The answers to your problem lie with the current situation,

Have you written to the person and simply asked for it back ?

Does the other person know that they have been overpaid ?

Is this a very recent problem, ie can it be reversed by the banking system ?

BB