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My ex-employer claims I was overpaid - received demand

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Hi there.

My last employer has sent me a demand for overpaid wages for the sum of £320.

I cannot afford to pay this at this time as my wife's business has had to stop during this pandemic and I cannot be furloughed in my new job because I started on 2nd March. We have severe money issues as a result.

Can my employer take me to court to recover the money?

 

They have included a copy of my last pay slip to explain the over payment. I can't work it out. The accompanying letter mentions that after recalculating my Tax and NI contributions they come to my overpayment figure. My pay slip doesn't explain this.

I have spent all of my pay and had no idea about the over payment.

 

Would Estoppel come into play here?

 

Any help greatly appreciated.

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It's not your problem. Sure they could take you to small claims court, but they would be extra stupid to try, especially in the current climate.  If you defended the claim, I doubt whether a judge would have any sympathy for them.  Personally I'd just ignore them, until if and when they are stupid enough to issue a Claim Form.

 

Aside from that , the courts are going to be stalled for the forseeable future anyway,  so it's likely just hot air from them.


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I think it would be helpful if you gave us more detail. How did it come about? When did it happen? Did you notice the overpayment? When did your employer bring it to your notice?.

Give us all the detail


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Posted (edited)
34 minutes ago, BankFodder said:

I think it would be helpful if you gave us more detail. How did it come about? When did it happen? Did you notice the overpayment? When did your employer bring it to your notice?.

Give us all the detail

Thanks for your replay BankFodder.

 

I left my previous employer (a major well known company) after being off with stress/anxiety due to bullying. I was off for 6 months total. I raised a formal grievance and the outcome was a whitewash where they lied and slandered me and cast me as the villain. I took it to appeal where they doubled down. I resigned on 10th February without notice. I sought ACAS conciliation but my employer ignored it. In the end I have no evidence for my treatment as it was one senior manager's word against mine. I don't want the stress of a full tribunal so I cut my losses. that was the end of it all as far as I was concerned. Totally defeated and so upset that a company with the reputation they have could treat me that way but as a result I realised I was better off out of it.

 

So I looked to get another job as finances were very poor for us as a result of only being on SSP for a while. Managed to get a new job with a start date of 2nd March.

 

Received the demand letter on about the 25th March.

 

I've attached the letter and payslip.

Hope that helps.

letter.pdf payslip.pdf

Edited by OutsiderLookingIn

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41 minutes ago, London1971 said:

It's not your problem. Sure they could take you to small claims court, but they would be extra stupid to try, especially in the current climate.  If you defended the claim, I doubt whether a judge would have any sympathy for them.  Personally I'd just ignore them, until if and when they are stupid enough to issue a Claim Form.

 

Aside from that , the courts are going to be stalled for the forseeable future anyway,  so it's likely just hot air from them.

Thanks for your reply. Hopefully that's the case.

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So I understand that this payment was made for the month of February – so you received it at the end of February. Is that correct? I'm afraid that you really haven't given us the proper dates even though I asked you to tell us when it all happened.

The letter which you have uploaded has no date at all.

Please will you address these questions.

Give us a chronology – bullet pointed.


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11 minutes ago, BankFodder said:

So I understand that this payment was made for the month of February – so you received it at the end of February. Is that correct? I'm afraid that you really haven't given us the proper dates even though I asked you to tell us when it all happened.

The letter which you have uploaded has no date at all.

Please will you address these questions.

Give us a chronology – bullet pointed.

Sorry.

 

1. Left employer 10th Feb - resigned.

 

2. Started new job 2nd March

 

3. Letter informing of overpayment dated 24th March

 

The payslip is my last pay and is for February. Money received 26th Feb.

 

I was not aware I had been overpaid.

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Pardon me asking this personal question – but do you have personal financial resources? Has the money been spent or is it still there? If it was spent then what was it spent on please?


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2 hours ago, BankFodder said:

Pardon me asking this personal question – but do you have personal financial resources? Has the money been spent or is it still there? If it was spent then what was it spent on please?

No problem. Yes the money is gone. It has just gone on food and bills. We are in a fair bit of debt as a result of last 6 months. We also invested in my wife's business and borrowed to facilitate this.

As it stands we have borrowed from my parents to survive and have a mortgage payment holiday for now.

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their letter actually give a figure that says they owe you £328.54

If there is an error then the error lies with the tax people not the employer and HMRC will be letting you know that you owe them money in about 2 years time.

Ignore this letter, it is not a lawful invoice and undoubtedly wrong even if you do owe them something.

Having said that it looks as though they have paid you for the full month when you left on the 10th. as most of your income is SSP that is a DWP problem so you still wont owe them that much

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Don't ignore letter. You need to respond.
 

 

They may well bring an action against you to recover the money – and in principle they would win and you would have to pay some kind of instalments. However, you should read up on estoppel.

It's important to show that you've acted in scrupulously good faith because otherwise a judge would refuse to uphold an estoppel defence. Of course is not hundred percent certain that the defence would work – but it is what you would have to do.

 

Quote

Dear Mr/Ms X X X

Thank you for your letter of X X X date.

I'm very sorry that you consider that you've overpaid me. If you have then you will have to accept my word that I had no idea. I'm afraid that I have always relied on your systems and they have  never been any problem in the past. I received all payments from you in good faith and had no idea and no reason to query anything.

I can assure you that had I realised that money had been paid to me in error and that it wasn't meant to be mine then I would have informed you about this. As it was, everything was so confusing. As you know I left your employ in extremely difficult circumstances and everything was a bit chaotic and so was my life.

If you did overpay me – and it's not clear you did – then I can tell you that it has been spent.

I left your employ on 10 February. Money was paid to me over two weeks later and you only informed me about the apparent overpayment a month later.

My family and I are in very difficult circumstances and in fact we were in difficulty even before the current virus crisis. We are faced with debts which I am having difficulty repaying and any money that I received from you went to pay debts and essential bills.

I'm afraid that I won't be repaying anything back to you and I suggest that maybe your best course of action is to begin an action in the small claims court to recover the money but I'm afraid that I will be defending the action. I'm happy to waive the normal two weeks notice and you can issue the claim immediately if you wish.
The sooner we put it before a judge, the better.

If you did overpay me then this is an error for which you are responsible. You paid the money. I received in good faith – I took you at your word and I had no reason to doubt that this money was due to me. And accordingly I went ahead and spent the money as if it was mine.

I'm sorry that our employment relationship has ended like this.

Yours sincerely

 


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Posted (edited)

Personally I wouldn't ignore it, although I think I'd certainly ignore London1971.

 

On the face of it, if you resigned without notice on 10 February and this was too late for payroll cut-off, then you must have been overpaid on 26 February (or whenever it was).  What is interesting though, is that there is a note at the foot of the payslip stating that you left on 10 February, so presumably your leaving date was taken into account on that payslip and you haven't been overpaid(?).

 

I know what ericsbrother is saying about the letter showing that they owe you money (it says you owe them "minus" three hundred odd quid) but I suspect that's a typo and I certainly would not rely on it.

 

I used to work in the NHS and I have experience of overpayments from both sides of the fence.  You are entitled to a detailed calculation of the overpayment and that letter does not provide one - it's crap.  I also don't like the format of the payslip.  You know your own pay - I don't.  Does that payslip look right for a full months pay, or does it look as if you left on 10 February?

 

Are/were you in a union?  If "yes" - can they help?

 

If I were you I'd contact your old employer and ask them for a detailed breakdown of the alleged overpayment.  Tell them that their letter and the payslip explains nothing to you.  (BTW - is that true?)

 

I've cross posted with BankFodder.  He and others may disagree with me about whether you should contact your old employer or not because of your current financial hardship.  If they disagree they may be right, but I would contact them.

 

Personally I think any advice to ignore this letter is bad advice - unless you are absolutely certain you've not been overpaid, in which case why ignore it?

 

Edit:  On re-reading ericsbrother I see he's also noted added confusion re SSP.  Hhhmmm...

Edited by Manxman in exile

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Yup agree with bank fodder and the letter But the reality is , they can sing for it. Their only option is to take you to the small claims. In light of the present circumstances I doubt they will.  If they do they are really stupid. For the sake of £300.
 

Your priority is to feed your family and pay your bills. Right now caring about what you

need to pay back your ex employer is way down on your priority list.


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BankFodder's letter can't do any harm* and you may as well try it.  (Although I'd be interested to know of any recent instances where estoppel was successfully pleaded as a defence to an overpayment).

 

As regards London1971, they may well not pursue it at the moment or may decide it's not worth it for £300 but... they've got six years in which to pursue it and I'm sure circumstances will change from those at present.  And as you seem to have left in what could be called "unhappy" circumstances, they may decide that they do want to pursue you even for just £300.

 

But whatever you do, don't just ignore it.  It's easy to just say "they can't do anything" if you're not the one who's been overpaid.

 

*The only "harm" I can see is that they may take action now when you'd prefer to delay it as long as possible.  I'm really not sure how successful a "good faith and anyway I've spent it" defence would be.  But if you can't afford to pay it what have you got to lose anyway?  (I'd still want to see a proper calculation of the alleged overpayment).

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They might take action as you say @Manxman in exile , but we are in an unprecedented crisis. A lot of people, the OP included has had a financial shock and needs to prioritise feeding his family. A potential court case x number of years down the line barely registers in terms of priorities.

 

That is the sprint of my advice, although technically you are right.


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Agreed.  If the OP simply can't afford to pay it, then they can't afford to pay it.

 

In answer to the OP's original question: "Yes - your former employer could take you to court (assuming they can prove on the balance of probabilities that you were in fact overpaid*) but they may not.  They potentially have up to six years to decide to do so."

 

The OP may have a defence of estoppel but it's not something I personally would want to rely on - although it's definitely worth trying, nothing to lose.

 

*I don't know the details of the OP's employment but, to me, that letter and payslip do nothing to establish an overpayment.  The payslip even seems to acknowledge the correct leave date, so it's not clear what the overpayment is?  (In fact, the letter is woeful).

 

 If the worst came to the worst, the OP could always offer a payment plan.  (Easy for me to say but even that might be unaffordable).

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On 02/04/2020 at 18:50, BankFodder said:

Don't ignore letter. You need to respond.
 

 

They may well bring an action against you to recover the money – and in principle they would win and you would have to pay some kind of instalments. However, you should read up on estoppel.

It's important to show that you've acted in scrupulously good faith because otherwise a judge would refuse to uphold an estoppel defence. Of course is not hundred percent certain that the defence would work – but it is what you would have to do.

 

 

Thanks BankFodder. I have sent a version of your letter to their email address.

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