Salary Overpayment Originating from 2005 - Can Payroll Claim That Far Back??

TAVERN

Hi,
I would be grateful if anyone could advise me how far back an employer can claw-back an overpayment?


There have been a series of errors in my colleagues salary regrades to the local authority which the authority have only just noticed (coincidently a new payroll system has been in use for a couple of months now). The first error dates back to 2005 - Can they legally go back this far?


The errors occurred partly because of the way in which her term time hours were calculated by the school that she works in, and partly because the payroll department were not thorough enough in the first place. The overpayments were through no fault of hers, and she could not have been aware that there was an error in the first place.


Seems totally unfair

Another_not_new_user

Legally they can claim anything they want. There is nothing that says they can't claim back to 2005 - whether a court would enforce that is another matter, but unless your friend goes to court they won't ever find out. And that could be an expensive and risky route.


The fact that it wasn't her fault isn't relevant to whether the debt is owed. But her best option would be to pursue a grievance if they insist on clawback of the wages, taking it to an appeal if necessary. There are never any guarantees (but there aren't any in a court either), but given the circumstances that you describe she stands a better chance of someone in the grievance system seeing reason - and that costs her nothing.


There are potential legal bases for fighting this, but all involve conflict and court cases (or threats of anyway) and none are guaranteed to succeed. Some people think it's easy - it isn't. The best way to try to resolve this is amicably.


Is she in a union?

agrinnall

I doubt whether a court would enforce any debt older than 6 years (5 in Scotland).

Another_not_new_user

I agree - but that still means that all this has to, one way or another, land in court. I am assuming that the OP's friend is still in employment, and therefore the employer could quite simply resort to deductions of overpayments. So unless she took it to court, the length of time that a court would enforce is moot. It would be preferable to stay out of court if it is possible. After all - six years overpayments is still going to add up to a hefty debt. If the employer can be reasoned with to drop the debt, or even to compromise, so much the better. And it avoids the necessity of taking ones employer to court, which is never a good career move.

Vectis

How much are the overpayments they claim?

TAVERN

They are saying that she has been overpaid by £891 in total. I was thinking that maybe she should ask for them to deduct a couple of hundred pounds a month until it is paid. It just seems very unfair, when it was their error that led to the overpayment in the first place.


Thank you everyone for your advice - much appreciated

Undervalued

TAVERN wrote: »

They are saying that she has been overpaid by £891 in total. I was thinking that maybe she should ask for them to deduct a couple of hundred pounds a month until it is paid. It just seems very unfair, when it was their error that led to the overpayment in the first place.


Thank you everyone for your advice - much appreciated

It may have been but it is also an employee's responsibility to check that their pay is correct.

She can certainly ask to repay over a period of time and they may well agree but they don't have to.

getmore4less

That's a tiny amount, the crazy thing is it will ne costing them more in time and effort to document this properly and provide a detailed breakdown.

Estoppel principles come into play.

Undervalued

getmore4less wrote: »

Estoppel principles come into play.

I very much doubt it!

The OP would need real reasons why they believed their pay to be correct to have any chance with that. Not checking properly doesn't cut it!

getmore4less

Undervalued wrote: »

I very much doubt it!

The OP would need real reasons why they believed their pay to be correct to have any chance with that. Not checking properly doesn't cut it!

what's the chances the system was documented in a way that would allow an employee to do the calculations by hand.

Multiple employee that are paid to do that job failed to get it right.

We are dealing with term time and holiday pay calculations resulting in an error of somewhere between £1.70-£1.90 a week.

ohreally

Commerzbank v Price-Jones [2003], the Court of Appeal held that an overpayment which was clearly a mistake on the employer’s part could be reclaimed, unless the employee could show that it would be inequitable for them to have to repay it.

Over to you to show inequity.