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Small Claims Court - Repayment of Overpaid Wages


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Please can somebody advise?

 

 

Friend was employed by Company A from November 2010 till November 2012. Employment contract said company had right to take back any overpaid wages.

 

 

Company A has now written to friend saying that they want overpaid wages back - they aren't saying which hours were overpaid merely giving a lump sum amount to be in full settlement. They have said that if friend does not pay up soon they will go to the small claims court - and bankrupt friend if necessary.

 

 

We know that Company A is of the opinion that friend claimed meal breaks and travelling time when he shouldn't have done. Apparently, they think, he was entitled to claim this ONLY for the first few weeks that he worked there but he was not told this and claimed all the time he was there. His timesheets were seen by the MD (small company) and approved by him before being passed to outside payroll bureau. The timesheets quite clearly show that meal breaks and travel time were being claimed, it is not just buried in the figures but separately shown. As the timesheets do not give a total number of hours - or allow you to show the overtime rate (time and a half or double time) the MD would have had no choice but to read what was on the timesheet.

Friend's previous job and current job are in the same industry as Company A and they both paid meal breaks and travel time.

 

 

Assuming that Company A does go to the Small Claims Court and they ask for a lump sum rather than an amount linked to specific hours that they identify, will the Court allow this?

If the Court requires them to identify specific hours then how far can they go back? All the way to November 2010?

Lastly, what happens to the amount they ask for as it has already been subjected to PAYE and NI and presumably one cannot get this back from HMRC. Does the Net amount get worked out?

 

 

Obviously, all this is a bit of a new experience for us. If anybody notices anything that we have missed I would appreciate it if you assume its because I don't understand what goes on.

 

 

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Assuming that Company A does go to the Small Claims Court and they ask for a lump sum rather than an amount linked to specific hours that they identify' date=' will the Court allow this?[/quote']

It depends how the employee defends the claim. If he doesn't defend it properly Company A would get judgment by default.

 

If the Court requires them to identify specific hours then how far can they go back? All the way to November 2010?
It is important to understand that judges do not act like detectives or inspectors. Generally speaking the court takes a fairly passive role listening to both sides before making a decision. The court will let the case proceed through the court system but is unlikely to take an active role in managing it unless a formal application is made by one of the parties.

 

You can't rely on the judge taking it on himself to ask them to identify the specific hours. If there is some doubt about how the amounts claimed have been calculated then it is the Defendant's job to raise this as an issue and put them to proof of how the amounts claimed have been calculated. Similarly it is the Defendant's job to ask the Respondent to provide the underlying documents/timesheets as necessary. If the document are not provided it is the Defendant's job to request disclosure or invite the judge to draw appropriate conclusions at the hearing.

 

The time limit for claims like this is six years so yes can go back to Nov 2010.

 

Lastly, what happens to the amount they ask for as it has already been subjected to PAYE and NI and presumably one cannot get this back from HMRC. Does the Net amount get worked out?
I doubt HMRC will issue a tax refund after this time, so I imagine they would claim the gross amount possibly including an additional sum in respect of employer's NI contributions.

 

Obviously, all this is a bit of a new experience for us. If anybody notices anything that we have missed I would appreciate it if you assume its because I don't understand what goes on.
There are essentially two grounds to defend a claim like this. The first ground is to deny that there was any overpayment at all, on the basis that the employee received payments due to him under the employment contract, on the basis of time sheets duly approved and accepted.

 

The second ground is estoppel, if the money has already been spent and it would be unfair for them to demand repayment now. Have a read of http://www.consumeractiongroup.co.uk/forum/showthread.php?378736-Accused-of-receiving-OverPayment-of-Salary-for-3-years.

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