Overpayment from Employer



  • Jarvisma
    Jarvisma Posts: 213 Forumite
    Hi there,

    I am a payroll manager by profession so believe me I've (unfortunately) seen this happen time and time again.

    Yes, as I'm sure you've gathered, the company have every right to reclaim the money. In my experience though, they would only have proceeded to the court stage after trying and failing several times to sort it out with you direct. Have you moved since you left the company?

    Either way I would suggest still contacting the ex employer and trying to deal with them direct. This is the only way you can aviod a CCJ. If you can agree a repayment plan with them (you may have to agree to also reimburse the court fee) and convince them that you are genuinely going to keep up the repayments.

    Otherwise unfortunately it is more in their interest to see it through to court as they can force you to pay.

    Please be aware though that if it goes that far and you don't keep up repayments they can apply for an attachment of earnings and the court will order your new employer to take the repayments direct from your salary and I'm sure you'll agree this is highly undesirable!

    My advice would be to contact the payroll manager at the old company and deal with them direct. If you send a token first instalment of your payment offer that would be a very good start and make them more inclined to work with you.

    Good luck - Hopefully you'll get a payroll manager with a heart!
  • OK, three points come to mind here.

    1) If you did not realise you had been overpaid, and changed your position as a result, then you are protected from recovery of the sum, under the Wages Act 1986 This point needs legal advice.

    2) If they have not contacted you and tried to resolve this, then they may well have breached the Civil Procedure Rules, and you could have their case struck out as in breach of the Overriding Objectives - This point needs a good solicitor.

    3) Whether you think they have a case or not, acknowledge the claim and file a defence, somehing like you know nothing of the claim and require the claimant to show strict proof of the sum, THEN write to the claimant asking for "additional information" and asking for their proof of writing to you etc. This will all help you in court, and you can, at the end of the day, still concede the case at no extra cost to you. This point needs someone who understands the Civil Court system, like a lay Representative or similar.

  • peterc2609 wrote: »

    Just returned from a week in the sun to find a Small Claims summons kinda thing on my doorstep!

    Basically, I worked for this employer for around about 12 months, 2 years ago.

    When I left, they paid me for 2 months without realising... and I didn't realise either.....

    Its their mistake.... do I even have to pay it back???


    How much money are we talking here? Are you working at the minute?

    Would it be possible for you to pay it back all at once? After all, it's two months salary - surely that can't be more than a couple grand at most?!

    TBH, if you can, I'd just pay it back - it just seems the decent thing to do, whether you could possibly get out of it or not.......

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  • ccastley
    ccastley Posts: 266 Forumite
    What was the end result of this Peter?

    I'm interested to know as something similar happened to me at my last month at the local Council. Had just had to remortgage and they overpaid me by a months wages and the money all went in at the same time. my head was all over the place and I didn't realise. What is also interesting is that they also said to me that they would send out the form and didnt...It wasn't Liverpool City COuncil by any chance was it? I heard somewhere that if similar circumstances by the same organisation happen to two people or more you can contest the issue based on 'social policy'. I'm not sure exactly what that means but if anyone can shed some light on it that would be great!

    Good luck and keep me posted on what happens, as I will for you!
  • If you pay them back, would that be the gross figure or the net figure? What happens to the tax and NI Contributions deducted?
  • ccastley
    ccastley Posts: 266 Forumite
    I didn't consider that actually...anyone know?
  • It seems everyone wants you to pay it back and I suppose you should - if you had accidently given someone more money than you should have you'd want it back wouldn't you?

    Have you considered why they were going to send you a form - income/expenditure no doubt - and why they have sued you?
    You mention this once and not again
    In my experience no employer that has made an overpayment can cause 'hardship' in reclaiming the overpayment. So, if the money is spent and you can prove it is spent and that repaying this money in one go would cause you hardship, they have to come to an agreement with you on repayng the amount.
    I imagine that a small claims court would probably end up doing this if you claimed inability to pay anyway.This is why they told you they would send you a form, it was probably an income/expenditure form to judge your ability to pay - especailly if you told the person you had originally spoken to you had spent the money.
    Prior to any court hearing a matter can be settled out of court and you should speak to the council, backed in writing, to see if they are willing to go through this process with you now and resolve it to your mutual agreement before the hearing date.
    If you get a reasonable person - rare in coucils I know - then I can see no reason why they wouldn't do this, unless you have a vindictive clerk who just wants to make your life a misery - and their satisfaction may be shortlived for a couple of reasons....

    In a small claims court it would be usual for the magistrate to seek evidence that the council, or any plaintiff for that matter, had made every effort to resolve the situation prior to taking action against you.Certainly given you opportunity to respond.
    From what you say this has not happened, although they could have written several letters to your old address, so, you would need to find this out - ask for copies of all their correspondence.
    They would have to prove evidence of attempting to contact you to resolve the matter.
    Secondly, if you have declared you are unable to pay they would have to evidence that they had followed their procedure for 'hardship' cases and sent you this form - I would guess, most would also send a reminder if you hadn't returned it.
    Most courts look gravely on any plaintiff that can show no procedure for chasing debt and moreover, given this is the local council, I guarantee they have a procedure and they would need to show that they have followed it.

    If they cannot then they would be on a very sticky wickett and could lose on this basis alone - depends on the magistrate.

    Conversley you would need to show that you had also made an effort to resolve this and, despite your best efforts had been denied this opportunity only to be landed with a summons.

    I think you still have some opportunity to sort this out but depending on the hearing date you need to move quickly and get through to someone with some common sense.

    All court hearings cost money in time and effort and i am sure they would rather settle this out of court than send someone to court to face you for what may be 'not a lot'.

    You'd need to argue your case with them over the extra costs they incurred for taking you to court.

    Good Luck
  • lemfizz
    lemfizz Posts: 12 Forumite
    First Anniversary Combo Breaker
    I am in a similar position in that I am being overpaid, and have been for over 2 years. I know this as I used to work in payroll several years ago.

    However, I have a letter from my employer, dating from around the time that the overpayments started, stating that the salary I am being paid is the correct one, even though I know it is wrong.

    Basically they are paying me a higher grade than my contract states I am on.

    Does the fact that they have made a mistake with my salary, and then told me in a letter that I am being paid correctly give me a stronger case if they ever discover their mistake & ask for the money back?
  • lemfizz, please bear in mind I am not a lawyer, however in your case the situation is markedly diffferent.

    Your employer has confirmed in writing that your payments are correct and therefore I would suggest this forms a new contract and therefore they cannot revoke this without your agreement.You should keep this letter and don't lose it , although you may have a fall back position if you have.

    Once an employer pays you, or infact, changes any part of your contract and maintains this for a certain period of time, with your agreement - which obviously in this case you would not withold - then it effectively becomes part of your contract and they cannot then take it away.
    basically it becomes the 'norm'.
    In my experience 2 years would be more than adequate to qualify for this and I would think that you are on 'safe' ground now.
    They would not be able to change your salary back and would be unable to reclaim any of it as they have left it too long.It basically constitutes your 'normal' salary.
    I would suggest you would win any confrontation on this issue but you would need to consider and decide to what degree you could stick to your guns whilst maintaining a mutually trustworthy and progressive relationship to take your career forward with this company/organistaion.
    Someone has made a mistake and assuming they are still there they would be keen to rectify it to preserve their own future/respect from their employer - enter internal politics!!

    I think that should you get promoted and they then find out they might try and get you to do the new job for what you are on now as it is the next grade up but you would need to argue this at the time.
    It is fair to say that if you are promoted it would be reasonable to expect some fiscal reward for this but you fall into difficult territory as you clearly work in an environment wherethere is a structured pay scale.
    Whether you choose to tell them is your call, but if you do, it may put pressure on your position when it is not needed. If you are promoted and they call you to book on this you can claim ignorance based on the letter confirming your pay is correct.
    They may, however, question your integrity once they do know - epsecailly if you've known for two years and they will know you have known if you worked in payroll.
  • just a line to say this happened to me. I have paid it back but not before having the amount adjusted to refund the tax paid upon the overpayment plus the interest on the taxed amount till the settlement date. The company claimed the tax back so why not you? best of luck every penny counts
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