Query re repayment of wages after I have been made redundant

Guest101

Theft Act Section 24A




Dishonestly retaining a wrongful credit.E+W
(1)A person is guilty of an offence if—
(a)a wrongful credit has been made to an account kept by him or in respect of which he has any right or interest;
(b)he knows or believes that the credit is wrongful; and
(c)he dishonestly fails to take such steps as are reasonable in the circumstances to secure that the credit is cancelled.
(2)References to a credit are to a credit of an amount of money.

TBagpuss

TyreLever wrote: »

But this is still an error by the employer. I am a believer that at no point should anyone be held accountable for someone elses errors. If I am underpaid then I would expect a top up in my next pay. If I am overpaid then I dont expect to have to pay it back.

What I am saying is if your an employer and you make an error, you pay for it. It seems it doesnt work like that, but it should.

Why should it? Why should you (or anyone) profit by someone else's error? After all, it is not as though you've done anything to deserve getting paid extra.

And if you fail to notice,it is your error as well as theirs. If you notice but stay silent, that is dishonest.

Obviosuly you (or anyone) should not be out of pocket as a result of someone's error, which is why it is (for instance) reasonable to expect a company to provide reply-paid returns envelope or arrange to collect, if they mistakenly deliver something to you that you didn't order.

in this case, OP should have notified the employer as soon as they saw the first wrong payment. If they didn't notice (seems unlikely, but I suppsoe just possible!) then now they know, they are obliged to repay the oney, but can reasonably expect the employer to agree a reasonable time scale for repaym,ent and to provide a letter confirming the arrangments so that OP can also strighten out the position regarding their tax credits.

TyreLever

In this case, the overpayment is substantial. Who the fudge can afford to lose any money when they are unemployed, let alone pay back months worth of wages, entitled or otherwise. As the money was given in error, you must question who is going to be most screwed, the employee who cant afford to repay, or the company who continued paying all this time without realizing. The company is obviously gonna be out of pocket, but the amount of money they are out of pocket will be a far smaller fraction of their profit than the money would be of an unemployed individual. Even if the individual did find employment, 9 months wages!? It would be ridiculous to expect someone to repay that, the debt would be crippling for an individual, but not necessarily so for a whole company.

Who is likely to be most screwed here = ex employee. I would rule in favor of the ex employee. If he deliberately and fraudulently claimed the money then the decision would be in favor of the company, but it was an error by the company that may ultimately lead to a greater loss to someone else.

seashore22

The money wasn't the ops to keep or spend. It's as simple as that and he needs to pay it back.

It's a good job that you're not in a position to make any rulings isn't it TyreLever. You would be wrong.

Takeaway_Addict

TyreLever wrote: »

In this case, the overpayment is substantial. Who the fudge can afford to lose any money when they are unemployed, let alone pay back months worth of wages, entitled or otherwise. As the money was given in error, you must question who is going to be most screwed, the employee who cant afford to repay, or the company who continued paying all this time without realizing. The company is obviously gonna be out of pocket, but the amount of money they are out of pocket will be a far smaller fraction of their profit than the money would be of an unemployed individual. Even if the individual did find employment, 9 months wages!? It would be ridiculous to expect someone to repay that, the debt would be crippling for an individual, but not necessarily so for a whole company.

Who is likely to be most screwed here = ex employee. I would rule in favor of the ex employee. If he deliberately and fraudulently claimed the money then the decision would be in favor of the company, but it was an error by the company that may ultimately lead to a greater loss to someone else.

And thankfully you're not in charge.

No one would expect someone who is unemployed to pay it all back in one go if spent (though how would you not know you were getting paid wrongly????) and it may take 10 years but the duty is still on the wronged party getting their money back.

steampowered

TyreLever wrote: »

it was an error by the company that may ultimately lead to a greater loss to someone else.

The employee isn't really suffering a loss, though. The money was never the employee's in the first place.

The law does allow the employee to keep overpayments if there is an "estoppel". Basically, this requires the employer to have overpaid the employee; the employee must have changed his position in good faith such that it would be unfair to require the employee to pay it back (for example by spending the money); the employee must not be aware that there was an overpayment; and the overpayment must not be the employee's fault.

In this case, the Op must have known he was being overpaid. He says he was made redundant in December 2015 but was still getting paid until September 2016. He must have known he wasn't entitled to that money and so he shouldn't have spent it.

TBagpuss

TyreLever wrote: »

In this case, the overpayment is substantial. Who the fudge can afford to lose any money when they are unemployed, let alone pay back months worth of wages, entitled or otherwise. As the money was given in error, you must question who is going to be most screwed, the employee who cant afford to repay, or the company who continued paying all this time without realizing. The company is obviously gonna be out of pocket, but the amount of money they are out of pocket will be a far smaller fraction of their profit than the money would be of an unemployed individual. Even if the individual did find employment, 9 months wages!? It would be ridiculous to expect someone to repay that, the debt would be crippling for an individual, but not necessarily so for a whole company.

Who is likely to be most screwed here = ex employee. I would rule in favor of the ex employee. If he deliberately and fraudulently claimed the money then the decision would be in favor of the company, but it was an error by the company that may ultimately lead to a greater loss to someone else.

The money was never the employee's, and they must have known that. If they chose to spend money they knew they weren't entitled to rather than returning it, or setting it aside so that it could be retuend, that is their own fault. They have not lost anything, as they were not entitled to it in the first place.

If the situation wsa one where the employee could not have known that there was an error then the situation might be different


And don't assume that the business is better able to stand the loss. That might be true for large businesses but many small businesses have pretty small profit margins, and they have to pay wages, rent and other outgoings regardless of whether they have the money coming in. sure, it's their mistake, but they are both legally and morally entitled to their money back.

Think about it, if the error was the otherway around, and the someone was paid too little, and they made a mistake in not noticing immediately, would you be as eager to argue that as they made the mistake of not spotting the underpayment that they should just suck it up?

TyreLever

seashore22 wrote: »

The money wasn't the ops to keep or spend. It's as simple as that and he needs to pay it back.

It's a good job that you're not in a position to make any rulings isn't it TyreLever. You would be wrong.

Wrong only in this context. If I was in charge, then the rules would be different and I would be right. Also if I was in charge there would be many other things that I would look into that would benefit companies. There is far too high a tax burden in the UK, aswell as massively complicated legislation.

Takeaway_Addict wrote: »

And thankfully you're not in charge.

No one would expect someone who is unemployed to pay it all back in one go if spent (though how would you not know you were getting paid wrongly????) and it may take 10 years but the duty is still on the wronged party getting their money back.

The wronged party brought "the wrong" on themselves. If I was in OPs position I would have used the money to keep paying off my rent, mortgage etc. To keep a roof over my head. I would have thought it was some sort of redundancy payment in installments. A sort of goodwill gesture that they were giving me more than they legally had to. I wouldnt risk claiming JSA if I knew I had money coming in.
Also do companies have insurance against losses?

TBagpuss wrote: »

The money was never the employee's, and they must have known that. If they chose to spend money they knew they weren't entitled to rather than returning it, or setting it aside so that it could be retuend, that is their own fault. They have not lost anything, as they were not entitled to it in the first place.

If the situation wsa one where the employee could not have known that there was an error then the situation might be different


And don't assume that the business is better able to stand the loss. That might be true for large businesses but many small businesses have pretty small profit margins, and they have to pay wages, rent and other outgoings regardless of whether they have the money coming in. sure, it's their mistake, but they are both legally and morally entitled to their money back.

Think about it, if the error was the otherway around, and the someone was paid too little, and they made a mistake in not noticing immediately, would you be as eager to argue that as they made the mistake of not spotting the underpayment that they should just suck it up?

If I noticed an underpayment like months later, I seriously doubt I would try to do anything about it. In my case, I regularly check my pay to ensure it is correct and inform my employer ASAP when it isnt. I would not go after them for an underpayment from 7 months ago, would seem ridiculous.

Lets just say they were supposed to pay me £9 per hour but was only paid 8 for a length of time. I would try to get it corrected ASAP but AFAIK I would not be entitled to back payment from months ago. For one thing I might end up biting off the hand that feeds me.

Gavin83

TyreLever wrote: »

Who is likely to be most screwed here = ex employee.

I agree with you there. Best case scenario is they pay the money back, worse case scenario they end up in prison. This is fraud.

If the case was brought against the OP the prosecution would have to prove he knowingly spent the money having known he wasn't entitled to it. Proving he wasn't entitled to it is easy, he was still getting his salary from a job he didn't have. If the OP still had the money he could claim he didn't realise and just hand it back but he's clearly spent it. There is no way he's convincing anyone he didn't notice multiple thousands going into his account. Sure, if someone overpaid by £100 you could probably suggest you didn't notice but not in this case. I'm actually surprised your condoning this theft.

However as I predicted the OP hasn't returned. Oh well.

TBagpuss

TyreLever wrote: »

Also do companies have insurance against losses?

It's unlikely that they would have insurance for this kind of error, and insurance isn't free money anyway - that just pushes the loss from the employer to a mix of the employer and the insurer. Why shouldn't the person how got money they were not entitled to, and must have known that they were not entitled to, benefit at the expense of innocent parties?

If I noticed an underpayment like months later, I seriously doubt I would try to do anything about it. In my case, I regularly check my pay to ensure it is correct and inform my employer ASAP when it isnt. I would not go after them for an underpayment from 7 months ago, would seem ridiculous.

Lets just say they were supposed to pay me £9 per hour but was only paid 8 for a length of time. I would try to get it corrected ASAP but AFAIK I would not be entitled to back payment from months ago. For one thing I might end up biting off the hand that feeds me.

You would absolutely be entitled to reclaim the underpayments. You would, of course, be free to chose not to do so, if you felt that your work was only worth £8 an hour, or that you didn't want to both with reclaiming it, but if you had a contract saying you were earning £9 hour you would be entitled to be paid that amount. There are rules about the timings of a claim, if it made via an employment tribunal you have to make the claim within 3 months of the underpayment, and can only claim a maximum of 3 years worth of underpayments, but it would also be possible to make a county court claim if you missed that time limit, and you have up to 6 years to bring a county court claim.