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comebackjimmy

Overpaid, now employer clawing back and forcing repayment Contract

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Hello All,

 

A friend of mine started work for a care home around eleven months ago.

 

From the very start they over paid her and it has just come to light.

 

I do not know for sure if she was aware of the over-payment, (she is cunning enough to be aware and dizzy enough to not notice!, with apologies to feminist readers!!).

 

The company has now demanded she repay the over-payment.  I am not clear what the sums are but she was contracted for around 20 hours a week and was paid for thirty so I would estimate 40 hours x minimum wage x 11 months so something like £3500.  (Please don't comment that this was a huge number that she should have noticed, I already know!).

 

At first they told her she could not leave until she had paid it back, finally an arrangement was made that she will repay at the rate of £50 per month and must settle the balance if she leaves before she has paid it back and they have made her sign a contract to that effect.

 

I take the view that whether or not she has an obligation to pay it back there should not be any contract that in effect ties her to the place.  She should be free to give notice and work elsewhere, any repayment should be at a rate she can afford and if she has a better job offer she should be able to take it without having to wait to pay back the overpay.

 

I would be most grateful for any CAG'ers opinions and comments on this matter and what her rights and obligations are. 

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Please follow the link and read on this forum about estoppel.

If she has received the payment completely in good faith – meaning that not only did she accept the fact that the payment was made properly and with authority, but also she had no reason to suspect that there was an error, then she will be entitled to say that they were estopped from recovering the payment – assuming that she no longer had the money and she had not used it to improve her lifestyle beyond what was normal for her.

From the sounds of it, she may not be entitled to rely upon the doctrine of estoppel. You say that she was working 20 hours and she received 30 hours – which is a very substantial overpayment. She would have to persuade a court that she really had no way of suspecting that the money she was receiving had been paid to her in error.

The courts apply very high standards if people try to rely on the doctrine of estoppel by way of a defence.

In terms of them refusing to allow her to leave, they have no right to do this. It's complete nonsense – although they may well decide to hang on to any payment which is owing to her including holiday pay et cetera and she would find it very difficult to deal with this.


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Just to add, I completely agree with you that a contract to prevent her leaving the employment would be completely unenforceable. However she probably should realise that the situation may be referred to in any references provided to her for a future job.

Who is the employer? Their approach to this problem – which of course has been of their own making, is frankly bullying and unacceptable.


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Thank you for your response BankFodder.

 

First of all her employer is a care home and she is a Part Time Carer.  I do not know what the company is called but would prefer not to publish it here even if I knew.

 

Having read through the link you provided I would tend to agree with your opinion regarding the Estoppel standard of proof especially as she is getting 50% more than she should of been expecting.  Having said that she has had this from the very start and knowing her as I do it is possible she thought this was her monthly wages! 

 

In her everyday life she goes from hand to mouth so there is no improvement in lifestyle unless you consider her absence from Foodbanks an improvement!

 

I think the solution is for her to repay at the low figure that seems to be in place but to disregard the contract requiring her to pay it back before or on leaving.  Should she give notice and work four weeks how can we stop them from witholding her last months wages?

 

 

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they cant force her to stay but they can deduct the money from her last salary run and then bill her for the rest that is still owed.

If she leaves the problem becomes theirs rather than hers because f she offers to pay 325 a month there is nothing they can do other than try adn sue for the entire amount and risk getting an order for worse payment terms from the court

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