Can my ex Employer recover overpaid salery?

[Etchell]

I worked for my ex Employer from April 30th until November 19th 2007.

From June I started to get suspiscious about a lack of payslip and started to verbally ask him, and was reasured it was going to be delt with.

In October I got so fed up at constantly asking him for my paysplips and not receiving them (salery was either a cheque or cash), I approached ACAS for advice, and they recomended that I put it in writing which would force him into a reply within 30 days. I did this, but my contract seased within this 30 days period.

I wrote to him again asking him for my payslips AND now my P45 and received communication that it was being delt with.

Nothing was received by December and so I applied for an employment tribunal to 'force' this paperwork out of him as I was led to believe I had 3 months from termination of contract for an employment tribunal.

I received all the paperwork of payslips and P45 at the weekend with a covering note from him saying that I have been overpaid over £2500 and that he was now going to seek this back from me.

If he had supplied me my payslips from the beginning, or even from the point of me requesting, this would have come to light a lot earlier and this figure would not have been so great. With my wife not earning, we simply do not have this money to 'spare'.

I was constantly reassued everything was correct (verbally) in terms of NI contributions etc, and so have 'happily' spent my salery!

Does he have a right to this money back (there is nothing in my contract that I can see regarding overpayment of monies etc), and what would he have to do to 'force' me to return this money he claims?

[Sidewinder]

Firstly it is important that you have your payslips independently checked, and I would also contact your tax office to verify that PAYE has been passed on to them - the last thing you need is to become involved in a tax investigation. On what grounds does your ex-employer claim that you have been overpaid? Did you agree a salary for doing the job? This should have been confirmed on a statement of terms which legally should have been provided on starting the job. Do the payslips show that you have been paid in excess of this amount?

 

If the calculations add up, then unfortunately the employer can lawfully pursue you for the money, BUT you are not obliged to repay this in one lump sum. The recovery of overpaid salary does not need to be specified in any contract, but can be reclaimed through the Courts by obtaining Judgement if neccessary. Subject to verification, if you agree that you have been overpaid, you will have to make a realistic proposal for repayment by instalments, based on your income and expenditure.

 

Sadly for you, you will have a battle to keep this money, as despite your ex-employer's shoddy administration, if it is not yours, he is within his rights to get it back.

[Etchell]

I did agree my salery, which is in my contract I signed when i first joined the company.

The gross pay on the payslips I have now received agrees with the figure on the contract.

The net pay on the payslips is in access of what I was being paid, and totals the difference he is claiming as overpayment.

What REALLY frustrates me to all of this is that I constantly asked him for this information, and he constantly assured me it was all correct and I now find out it wasnt and I have to pay for HIS error and his shoddy administration.

(Could he claim interest?)

[Sidewinder]

I do not quite understand why if the Gross pay is correct, that the Net pay should be different unless the tax and NI deductions have been wrongly applied. In that case, any overpayment might be due to the Revenue not the employer, so I repeat my original advice to have this properly checked and to contact HMRC to check that everything is in order.

 

Hang on though - you are saying that the Net pay shown on the payslips is more than you actually received? Surely somebody owes you money not the other way around.

 

I am confused - does anybody else see it the same as me or am I missing something?

 

Assuming that when this is verified you do owe money, then no he cannot claim interest as far as I am aware.

[Goldlady]

Were you paid cash or by cheque/bank? It sounds a little dodgy to me as well.

[Etchell]

Further to Sidewinders latest reply (and thank you to them for their comments), It has only come to light that the net pay was incorrect due to me 'forcing' the payslips out of them post my employement.

My understanding is that they believed (and they repeated their reassurances to me through my employment that my take home was correct) they were paying my salery correctly, but due to the employment tribunal 'forcing' the payslips out of them, they have realised their error due to processing all the payslips and P45 in one go following the termination of my contract and the outcome of the employment tribunal.

It is difficult for me to try and get this all accross in text, and I did a slight miswording in my first reply....what I ment to say was that the money paid to me (in either cash or cheque...it altered month to month) was more than what the payslips are now saying it should have been.

I will certainly take Sidewinders advice and get them independantly checked.

I hope this clears up what has happened?!

[Sidewinder]

I understand this now. Get things checked out then do an accurate and realistic income/expenditure calculation and make a repayment proposal. Let us know if you need any more help.

[advisee]

My advice... specificially if it was cash..... is to claim you received the correct money.

 

If you want to fight this then go for it! If you want a tribunal to decide this, you have a week to file a tribunal claim (perhaps for unfair dismissal, given that you complained over the lack of a payslip) and then he can make his counterclaim.

 

Do check with the tax office though... it may well be that any money is properly owed to them not to the employee.

[hanzo]

Remember that illegal contracts are not enforceable through the courts. If he's been paying you sometimes in cash for the purposes of tax evasion or some other dodgy piece of accountancy then he doesn't have a legal remedy.

[SeanT]

Even better, claim that you never received enough money, then they would have to prove that they had paid you correctly before they could recover anything from you.

[Goldlady]

Hi, if he has overpaid you by that much then that is sheer incompetence.

 

I don't know if anyone from the revenue can comment, but many years ago we had a PAYE inspection and at the time we were paying the office junior £65 a week in cash. She was on the payroll and should have paid a few pence of NI (shows how long ago it was). We were paying the NI for her, but it just was silly to fiddle about with change, however the inspector said that as we were paying her the full £65 in cash we should have increased her gross pay to £65.20 or whatever to keep everything right.

 

If this was applied in your case then the employer would have to increase your gross pay to cover the amount you have actually received:p Don't know what anyone else thinks....

[prushton]

You have a statutory right to an itemised pay slip. hope this helps

 

 

 

 

Itemised pay statements

 

Most employees have a statutory right to receive a written pay statement. However certain groups are are EXCLUDED from receiving a payslip:-

• anyone who is not an employee, (for example, an independent contractor or freelance agent).
  
• an employee who ordinarily works outside the UK under her/his contract of employment.
  
• members of the police service.
  
• merchant seamen and share fisherman.

If you are an employee and not in one of the excluded groups above, your pay statement must contain the following details:

• the gross amount of the wages or salary.
  
• the amounts of any fixed deductions (see note below) and the purposes for which they are made, for example, trade union subscriptions and National Savings scheme contributions.
  
• where net pay is split into different part payments, the amount and method of each part payment the amounts of any variable deductions and the purposes for which they are made, for example, the separate figures of a cash payment and a balance credited to a bank account.
  
• the net amount of any wages or salary payable.

Note: In the case of fixed deductions, your employer is allowed to give you a written “standing statement of fixed deductions”, showing the amount and purpose of each deduction, together with the intervals at which they are to be made. This statement must be updated where there are changes, and, in any case, at least every 12 months. If a standing statement of fixed deductions is provided, an employer does not then have to break down the fixed deductions on your pay slip, but can simply give the total figure in question.

What if I don't get a proper payslip?

 

If your employer does not give you a pay slip, or it is not complete, we would recommend that you write to your employer to request that s/he provides you with a full itemised statement. (Please note, if your employer dismisses you for requesting an itemised pay slip, see section below on Unfair dismissal). If your employer still refuses to supply you with one, you can go to an Employment Tribunal to determine what particulars ought to have been included in a statement. However, whilst the tribunal can make a declaration to the effect that your employer has failed to give you a pay statement or that the statement provided does not contain all the prescribed particulars, it does not have the power to order the employer to provide you with pay statements.

Tribunals can also award compensation, although whether they do in practice is up to them, and could depend, for example, on whether they regard the employer’s failure as a technical failure or a deliberate one.

Note: The amount of any compensation award will not be more than the total amount of deductions which the employer failed to record during the 13 weeks immediately before the date of your application to the Employment Tribunal. In other words, it is best to act quickly if you notice that money has been deducted, which is not recorded on your pay slip.

If you want to take a complaint to a tribunal you will need to make an application on an ET1 form [pdf] -you can get this from your local JobCentre Plus or Citizens Advice Bureau- while you are still in employment, or within three months of the job ending.

Unfair dismissal for asserting a statutory right

 

Normally you need to have worked for an employer continuously for one year before you can make a complaint of Unfair Dismissal to an Employment Tribunal. However, where you are dismissed for “asserting a statutory right”, you can claim Unfair Dismissal from the first day of your employment. If you are dismissed because you have requested an itemised pay statement, that will count as “asserting a statutory right”. If you can prove that was the reason for your dismissal, the dismissal will be automatically unfair and you will be entitled to compensation.

You can make a complaint for unfair dismissal to an Employment Tribunal on Form ET1 [pdf] - available from your local Citizens Advice Bureau or the Jobcentre Plus network. You must make your complaint within three months of the date on which you are dismissed.

Itemised pay statements

All employees must have an itemised pay statement containing a minimum of the gross pay, net pay, amounts and reasons of deductions and the methods by which every part of the net pay will be paid. The statement, or pay slip, must be given to the employee either prior to or on the pay day.

Deductions from Wages

An employer is allowed to make certain deductions from an employees wages, which include Tax & NI, attachments of earnings, authorised third person payments without prior written authorisation from the employee.

Even if the employee owes their employer money, repayment of a loan for example, and fails to pay it the employer, without specific written consent from the employee, can not just deduct it from their wages.

There are certain payments that are not classed as wages, which include advances, redundancy payments and compensation.

A retail shop worker may have a maximum of 10% of their gross wages deducted to pay back cash and stock shortages following written notification.

If a complaint to a tribunal is upheld then the deduction is made illegal and, no matter how justified the deduction was, must be paid back, furthermore, no other court action to recover the deduction may be made.

Overpayment of Wages

An employer is allowed to recover overpayments of wages, if the amount was quite large the employer would generally be expected to inform and then negotiate a repayment schedule with the employee. An employee need not pay back the overpayment if they can prove to a court that they did not know nor could they have reasonably been expected to have known of the overpayment.

[Etchell]

Prior to Prushtons response, and reading everyones opinions on this (and thank you to all for your advice), initially it seemed that I would still have to pay this money back. But picking up on the bottom of Prushtons reply, do I see a glimmer of hope for me?

'An employee need not pay back the overpayment if they can prove to a court that they did not know nor could they have reasonably been expected to have known of the overpayment.'

As I constantly asked for my payslips (which I never reveiced until some time following the termination of my contract and a succesful outcome from the employment tribunal), and was re-assured that my salery was correct during my employment (albeit the reassurance was verbal), would this stand up in my defence of not knowing of incorrect overpayment?

[advisee]

As I constantly asked for my payslips (which I never reveiced until some time following the termination of my contract and a succesful outcome from the employment tribunal), and was re-assured that my salery was correct during my employment (albeit the reassurance was verbal), would this stand up in my defence of not knowing of incorrect overpayment?

 

Definitely. Do not pay this guy a penny, don't agree to paying £x per week...

 

Let him decide to take you to the small claims court, and if (amazingly) you loose then the judge will set a payment plan.

 

I think you will win though.

 

Actually, I think he'll not actually take you to court, as he seems the sort of small employer who has skeletons in the closet, who wouldn't want the authorities to look too closely at his business affairs...

[prushton]

As my previous post stated, your employer has a legal obligation to provide you with an itemised wage slip. Despite continually asking him for wage slips he still did not supply them.

 

Your employer cannot recover this money from your wages without your written consent. If he does it would constitute an illegal deduction from wages and you could bring a claim to an employment tribunal (within a 3 month period).

 

Before you brought a claim against him for illegal deductions from wages you must exhaust your company grievance proceedures as laid down in your terms and conditions of employment that should have been given to you when you started working there.

 

Generally you should submit a grievance letter to him , stating that you are not happy about the situation etc ( see ACAS code of practice for grievance proceedures at Acas - Home) Your employer could not take all of this money at once , even if you knew there was an overpayment. You are entitled to agree a repayment plan, that you agree with and at a rate that you could reasonably afford.

 

Should you not want to repay any of this money your employer claims he has overpaid you, tell him that if he tries to take this money without your consent , then this would constitue an illegal deduction from your wages, and his only course of action would be to take you to court to recover the overpayment.

 

Now, because you can prove that you requested your wage slips ( that he is legally required to provide) and he failed to provide them to you, then you could also prove to a court that you did not know you were being over paid , nor could you have reasonably have known, in the abscence of pay slips to compare what you should have been paid against what you were actually paid.

 

Are you a member of a union ? if so see your shop steward, if not I would seek advise from a solicitor or citizens advice.

 

P.S I am a shop steward with the T.G.W.U

[patdavies]

prushton,

 

The employer in this case is not able to make any wage deductions.

 

I think you may have mised the point that this is an ex-employer

[prushton]

I am well aware that its an ex employer but the same principles apply when he is trying to recover over payment.

[advisee]

I am well aware that its an ex employer but the same principles apply when he is trying to recover over payment.

 

Agreed, in terms of following the grievance procedure.

 

Pat was trying to make the point that the threat of deductions happening is (thankfully) no longer there.

 

Etchell.... just a thought, but have you been paid all holiday pay etc that you are owed?

[Etchell]

Regarding my holiday pay owed etc, that is now quite a difficult one for me to answer, but in essence, I THINK so!

Baring in mind that he was paying me one figure inititially which is what he thought to be correct, he gave me my final (you guessed it) cheque, which he believed to be the correct amount of monies outstanding. I initially went back saying that it was incorrect as I had thought my notice period was 1 month, but on re-re-re reading the contract discovered my notifiaction period was 1 week and not 1 month.

On re-calculating, I now believe this to be correct.

I have also recently found out that my contract was written by an ex-employer, and I have been led to believe has not been passed under the eyes of a solicitor or anyone with anykind of employment law knowledge...sums it up really!

The lessons I have learnt from this!!!