payment received from ex employer, demanding repayment.

Granglio

an employee may be able to use the defence of ‘estoppel’ to resist an employer's recovery of an overpayment on grounds of unfairness. In the case of County Council of Avon v Howlett [1983] 1 WLR 605 a teacher was paid more sick pay than he was entitled to. The teacher queried the overpayments but was told they were correct. By the time the Council had realised their mistake, the teacher had spent most of it. The Court of Appeal held that the defence of estoppel prevented the council from recovering the whole sum of the overpayment.



In reaching its conclusion, the court identified three conditions that had to be satisfied for an estoppel defence to succeed:


The employer must have made a general representation of fact, which led the employee to believe that he was entitled to treat the money as his own.

The employee must have, in good faith, consequently "changed his position" (in other words, spent some or all of the money in dispute).

The overpayment must not have been primarily caused by the fault of the employee.

If you are really concerned about not paying them back just go and see a solicitor and they can tell you if this applies to you.

cazziebo

Another not new user is quite correct - this is a debt and the company can legally pursue it.

From an HR perspective, (in my experience) we would make best efforts to recover the money. How hard we chase will depend on

1. the sum involved
2. the likelihood the ex employee has means to pay
3. the reason the error originated

If the ex employee was reasonable and got back in touch to come to an agreement we would be more likely to negotiate an acceptable pay back. If it was our fault, and/or would cause hardship, we might discount the sum payable, or even write it off. If the employee refused to discuss, we would be more likely to pass straight to our legal team.

(PS in the OP's defence, many people do not get exactly the same amount every week (shift allowances, OT, bonuses) so wouldn't necessarily notice an additional (or lesser) amount than is properly due. If you add in to a final salary pay check the accrued holiday, the incomplete month, etc etc, it can be hard to spot a discrepancy)