over payment of wages

[kaka22]

Hi , Wondered if anyone can help me , my dad has been over paid for the last 3 months in error but he genuinely didnt realise , anyway the company he works for has decided to take the overpayment back giving him less than 7 days notice and leaving him with nothing for the next month , they have taken approx 75% of his wages

 

are the allowed to do this ?

 

any advise would be appreciated , thanks

[BankFodder]

No they are not allowed to do this. However there is a risk that if he challenges them he may be risking his job or promotion prospects.

 

Is it a big company? If it is then he should go to HR and discuss it with them and come up with a scheme of repayment

[rebel11]

Further info, if he can't meet essential costs such as food, bills etc, Write to HR, explain that your happy for them to deduct the money, but this has left you short, can they advance salary etc.

 

http://www.adviceguide.org.uk/wales/work_w/faq_index_employment/faq_employment_overpayment_of_wages.htm

[kaka22]

Thanks for the reply

 

Yes it is a big company he works for a major energy supplier

 

He has been to HR and they told him they were well within their rights to take it back and offered him a £400 loan to be paid back at £75 a month .

 

His wages are quite complicated as he gets paid basic , commission and allowances which are paid weeks later and i think at different times . He hasn't realised there have been the over payments ,they where made over a 3 month period .

 

He doesn't dispute owing the money but I just think this is wrong to give him 7 days notice just before xmas that they are going to take 75% of his wage! hes worked for them for over 10 years!

[ericsbrother]

they have formalised a method of repaying it over time. I'm sure that by turning it into a loan it is just an administrative convenience so they can recalim it should he leave in the near future.

There is no point being upset about the stupidity of an energy company nor being upset by proxy. Your dad has been given an equitable solution.

[Ethel Street]

No they are not allowed to do this.

 

Where are the rules that say they can't do this? Just curious because rebel11 posted links to CAB guides but I can't see anything in them about restrictions on how an employer can recover overpaid wages. Maybe I just missed it though.

[caro]

The Employment Rights Act 1996 says that an employer is not authorised to make a deduction from an employee’s wages unless the deduction is authorised by statute (i.e. tax and NIC), or the worker has given prior written consent to the deduction being made. If such deductions are made the employee is entitled to make a claim under Section 13 of the Act. However, in practice, a claim against deductions made by the employer for overpayments of wages or expenses is unlikely to be successful.

 

Your father needs to negotiate a repayment plan he can afford. It's not uncommon to repay an overpayment over the same period it was paid, so in this case, 3 months.

[stevemLS]

The Employment Rights Act 1996 says that an employer is not authorised to make a deduction from an employee’s wages unless the deduction is authorised by statute (i.e. tax and NIC), or the worker has given prior written consent to the deduction being made. If such deductions are made the employee is entitled to make a claim under Section 13 of the Act. However, in practice, a claim against deductions made by the employer for overpayments of wages or expenses is unlikely to be successful.

 

Your father needs to negotiate a repayment plan he can afford. It's not uncommon to repay an overpayment over the same period it was paid, so in this case, 3 months.

 

Section 14 of the 1996 Act says that recovery of an overpayment of wages is an exception to the right not to have deductions made from wages. So, whilst they are not doing anything unlawful, you would expect (and they have) the employer to recognise the reality of the situation they are potentially leaving their employee in.

[Sidewinder]

The above is correct - an employer has the right to recover overpayments of wages without reference to th eemployee however a GOOD employer would negotiate with the employee and reach a mutually acceptable arrangement for repayment. It would seem in this case that the employer has agreed to do this.

 

The alternative where the employee feels particularly aggrieved or has perhaps been misled into thinking that the overpayment was an amount that he was entitled to would be to estop the employer from recovery arguing a change of position, however the hurdles to cross are fairly high - for example maybe querying thepayment and being told it was correct or having a genuine belief that there was entitlement. Not easy and as BF alludes to it would not be likely to win friends in high places.