Question of salary overpayment and doctrine of estoppel

Cardinal-Red

dmg24 wrote: »

Can you apply the ratio of the above case to your own situation? You will need to if you wish to rely on it.

I think I can, namely:

- they made the error
- I didn't spot it
- I have changed my position because of it
- I would not suffer financial detriment if they undo it

I really must stress I am not looking for opinions on whether it would be successful or not... sorry if I gave that impression. I am looking for views on the outcome, i.e. whether the estoppel only applies to the overpayments, or the continued payment of salary in the future.

Cardinal-Red

SueSueSue wrote: »

Nothing you have posted at all gives me any sort of belief you will win so how it would be enforced doesnt matter a jot.

Thank you for your expert legal opinion.

iamana1ias

WHAT DOES YOUR CONTRACT SAY??? :rolleyes:

dmg24

Cardinal-Red wrote: »

I think I can, namely:

- they made the error
- I didn't spot it
- I have changed my position because of it
- I would not suffer financial detriment if they undo it

I really must stress I am not looking for opinions on whether it would be successful or not... sorry if I gave that impression. I am looking for views on the outcome, i.e. whether the estoppel only applies to the overpayments, or the continued payment of salary in the future.

Estoppel is not nearly that simple, plus your above summary is incorrect.

If you are in successful in arguing your case, in that situation that you have described the previous overpayment will be written off and your ongoing pay will be adjusted to the correct rate.

You really need to take further advice on this.

zzzLazyDaisy

dmg24 wrote: »

The point is that you will significantly weaken your argument if you don't understand what you are talking about.

Most Law students have great difficulty with estoppel. Many go on to qualify as solicitors and still have no idea on the subject!

DMG makes a good point here.

You should also be aware that, in general terms, most ET's will strive to come to a decision which is just and equitable, within the applicable law. Also if you get the 'wrong' decision, you can only appeal on a point of law, and not an issue of fact.

What this means in practice is that if the tribunal is against you, they will be careful to record findings of fact to support their decision.

So it is common to see tribunal decisions that say something like 'the claimant attests that [blah blah blah]. However, having taken into account the evidence of the respondent's witnesses, and having listened carefully to the representations of the respondent's representative, it is the unanimous finding of the tribunal that the claimant's assertions on this issue of fact are not accepted.'

In other words, no matter how good a grasp you have of the relevant law, there is still a high risk that the tribunal may find against you on the facts.

But it is an interesting scenario. Do keep us informed.

zzzLazyDaisy

Cardinal-Red wrote: »

I am looking for views on the outcome, i.e. whether the estoppel only applies to the overpayments, or the continued payment of salary in the future.

For what it is worth, it is my view - on the facts that you have outlined - that even if you were to be successful in arguing that the employer should be estopped, this would apply only to reclaiming the overpayments. It would not change the basic fact that you have in fact been overpaid. On that basis the logical conclusion would be that your employer would be entitled to cease making the overpayments, and therefore you would revert to your correct salary.

However, these are complex legal issues which are not really suited to an internet forum. So I must refer you to my sig, and suggest that you get legal advice on the subject.

Debt_Free_Chick

Cardinal-Red wrote: »

IF an estoppel claim is successful, what is the outcome on continuing salary payments?

It depends on the facts of the case i.e. YOUR case.

Cardinal-Red wrote: »

I think I can, namely:

- they made the error

OK - a mistake of fact then

- I didn't spot it

But should you reasonably have spotted it? It's not whether or not you did, it's whether or not you should reasonably have known that you were not entitled to the allowance. So if, for example, your offer or contract specifically states that you are not entitled to the allowance, then you'll not win.

Was the allowance specifically named as an item on your payslip?

And what did your offer/contract of employment say?

- I have changed my position because of it

Careful ... in what way have you done so?

- I would not suffer financial detriment if they undo it

Not a point in your favour, I'm afraid

I really must stress I am not looking for opinions on whether it would be successful or not... sorry if I gave that impression. I am looking for views on the outcome, i.e. whether the estoppel only applies to the overpayments, or the continued payment of salary in the future.

In which case, I think it depends on what you're claiming. Either that you are entitled to the allowance and the employer is estopped from denying that. That depends on the facts and the evidence you can produce to support that view.

The precedent in the case you cite is not unusual. It's an example of estoppel and the application of the legal doctrine of mistake. The doctrine itself would apply without the Avon case anyway.

Cardinal-Red

zzzLazyDaisy wrote: »

For what it is worth, it is my view - on the facts that you have outlined - that even if you were to be successful in arguing that the employer should be estopped, this would apply only to reclaiming the overpayments. It would not change the basic fact that you have in fact been overpaid. On that basis the logical conclusion would be that your employer would be entitled to cease making the overpayments, and therefore you would revert to your correct salary.

However, these are complex legal issues which are not really suited to an internet forum. So I must refer you to my sig, and suggest that you get legal advice on the subject.

Can I say thank you for your help and actually answering the question I was asking. Much appreciated. It was exactly as I suspected, and I just wanted to be clear more for the way I am going to word my response to them.

DMG - I will take your comments on board too, and thank you.

Jennifer_Jane

Hi - I was searching for one of my own old threads and came across this.

I successfully had a case against the Midland Bank via the Law of Estoppel. My case was that I went into the Midland Bank (pre-computers) and asked them for my balance. They wrote this down on a scrap of paper. Thinking I had money available, I spent the money they said I had. A couple of weeks later I was sent an overdraft letter. The amount was for about a month's salary (it was £64 and I was living in London!), repaying the amount would have caused great difficulty.

My brother (a solicitor) suggested that we tackle this via the Law of Estoppel. No-one was disagreeing that I owed the bank the £64, but because they had said that I had the money, I had spent it. From what I recall, the Law of Estoppel is to stop the Bank from denying that they had told me I had the extra money in the account. So this was obviously a one-off situation, not ongoing.

I had to show (as mentioned above):
1. How I could have thought/believed I had so much money in the account
2. What had I done with the money (if invested or in savings I would have had to pay it back)
3. Would it cause hardship to repay it.

I could answer all those questions quite justifiably, and just as we were going to go to court with it (my brother would have had to pay all the costs for me, and he was still prepared to do this), the Bank agreed to write off the amount.

I realise this may not help you, but just to mention that I have had a successful, if ancient, example of the Law of Estoppel in practice.

Hope this helps
Jen
x

arclight

Cardinal-Red,

You mention potentially using an estoppel argument in the Tribunal. Are you sure this is the right forum?

If your employer deducted to recover the monies then you could make an unlawful deduction of wages claim, however s.14 Employment Rights Act exempts overpayments as being classed as an unlawful deduction. The express wording of the statute and the limit on Tribunal jurisdiction would I think stop them determining "chancery" style arguments.

Perhaps your best bet is, once the "deductions" are made, to raise a breach of contract in the county court?

In answer to your question, if a court upheld this breach then they would not compell your employer to pay you the apparently mistaken increased salary, but they could award for things arising directly from the breach. You mention a lease - perhaps (as long as you could show an evidential link between going for this and your payscale). Partner taking a lesser paid job - umm, unlikely but not impossible. Look up "remoteness of damage" in any Contract Law book. And dont forget your attempts at mitigating potential losses.

Finally, for Avon v Howlett you need to bear in mind that the first thing that needs to be shown is that the employer made a "representation of fact" which caused you to believe the money was rightfully yours. This works best when there is some sort communication from the employer confirming their belief in the correctness of the payment in addition to simply making the overpayments.

Anyway, best of luck!