Money Moral Dilemma: Should I report my colleague for not telling payroll he's been overpaid?

AccountantJim

Interesting to see how many on this thread seem to be unaware of the legal situation yet still feel able to comment. 

There is an early comment from grajay that mentions the law around theft. Also pertinent is the Fraud Act, which contains a definition of fraud by failure to disclose information. Your colleague is almost certainly guilty of breaching this, and you could be too if you don't report what you know. 

To elaborate, either your contract of employment or an organisation policy will require you to check your payslip regularly and report any inaccuracies. Failure to alert your employer to an overpayment therefore falls under the definition in the Fraud Act. If/when this is investigated, even if the body of evidence falls short of that needed for a conviction, it could lead to dismissal for gross misconduct. 

Separately, if your employer is a large organisation they will probably have a counter-fraud policy in place, requiring you to notify a designated individual if you suspect fraud. You could debate endlessly whether they would ever find out you knew about the overpayment if you choose not to report it, but morally it is right that you should report it.

You really should be raising this. 

tpc5

It would be petty, or a result of jealousy, to say anything.  It’s your colleague’s problem if the company finds out and asks for a refund, or the company’s problem if they don’t.  Just move on, and with a clean conscience at that.

Jacket3

You're jealous because your colleague has a few grand in his pocket and you don't, as much as you want to tell yourself it'd be "the right thing" to report him. 

He was stupid to tell you because it's none of your business. Obviously the company has realised because the overpayments have stopped and for whatever reason, they haven't asked for the money back, so the situation is resolved (other than your irritation).

nero33

Wait until either you leave or he leaves, then notify the organisation

hairypitz

Don’t say anything. It’s petty. What if they lost their job? Their home? Would you feel morally better?
I’ve just handed in £3000 I was overpaid by my payroll. They’d probably never have realized their mistake, I could easily have got away with it, but I’d rather not. 

Don’t feel cheated. It wasn’t your money to lose. 

LP53

Leave him to it. Make him aware he may end up paying it all back.
Although it’s understandable you’re going to be annoyed you’d just be reporting it out of spite.

tony7bear

Reading through the comments on this post has left me feeling dismayed by the lack of honesty from so many people here. The person who is still defrauding the company should take a good look at his contract of employment before it's too late, he might be in for a bit of a surprise.

The payroll team will eventually find out, reports are frequently run on various criteria so it's only a matter of time until that happens. When it does come to light they will arrange to recover the money from him, even if that means terminating his employment and recovering the money from his final salary payment, I doubt he'll be feeling so smug when he's looking for another job.

HIA

I was in a similar situation when I left NHS 2 years ago. My incompetent managers didn't fill in leaver forms so I continued to be payed until I told payroll who took an age to calculate the repayment and then came back for a second bite saying they had miscalculated. However I couldn't have just let the payments carry on. In your situation it's not your place to say anything.

akira181

AccountantJim said:

Interesting to see how many on this thread seem to be unaware of the legal situation yet still feel able to comment. 

There is an early comment from grajay that mentions the law around theft. Also pertinent is the Fraud Act, which contains a definition of fraud by failure to disclose information. Your colleague is almost certainly guilty of breaching this, and you could be too if you don't report what you know. 

To elaborate, either your contract of employment or an organisation policy will require you to check your payslip regularly and report any inaccuracies. Failure to alert your employer to an overpayment therefore falls under the definition in the Fraud Act. If/when this is investigated, even if the body of evidence falls short of that needed for a conviction, it could lead to dismissal for gross misconduct. 

Separately, if your employer is a large organisation they will probably have a counter-fraud policy in place, requiring you to notify a designated individual if you suspect fraud. You could debate endlessly whether they would ever find out you knew about the overpayment if you choose not to report it, but morally it is right that you should report it.

You really should be raising this. 

Similar can be said for you, you don't seem to understand the legal process nor have you considered office dynamics/human behaviour.

To prove fraud, the "victim" would need to prove that the "offender" knowingly and wilfully acted dishonestly for personal gain, which is extremely difficult to prove. While the colleague in this case is indeed behaving fraudulently, it seems like finance/HR have never asked if he was still receiving these payments and the colleague has never denied receiving them.

Therefore, he can claim ignorance and did not wilfully behave dishonestly for personal gain, which is difficult to disprove. As such, it's extremely unlikely that any legal prosecution would ever arise from this and any dismissal will almost certainly lead to a tribunal for the same reasons. HR cannot prove he done it wilfully so you cannot say it's gross misconduct when the core of the issue (failure to cancel the allowance) originates from their own mistake. All the employer can do is request any overpayments to be repaid or arrange for it to be deducted from subsequent payslips if the amount is too large to be paid back in one go.

Regardless of what any contract says, an employer cannot reasonably expect employees to regularly check payslips for mistakes that shouldn't be happening in the first place and claim fraud/misconduct when an employee fails to do so. Without the OP going on official record with HR saying the colleague in question was fully aware and kept quiet, HR cannot prove any misconduct occurred. Even then, one statement is unlikely to be enough as some degree of corroboration is required otherwise it's just one word against another. As others have said, it's extremely stupid for your colleague to be so loose lipped about it for that reason.

The OP hasn't been punished for behaving honestly but as the saying goes, no-one ever got rich by being honest. I've been in a similar situation and I get it, it doesn't feel good knowing people with less scruples benefit, but that's the cost of having a moral compass. It'll catch up to them one day.

I also strongly discourage reporting your colleague as not only is it petty, you do not want an office reputation of snitching to management, it'll erode your relationship with all your colleagues when word gets out. End of the day, the money belongs to a company and not an individual, so it's not your concern. If your company is large enough that they can make such large overpayments to both of you without realising, then who cares if some of the rank and file make a small "bonus". If your company is small, they'll find out at the next audit and your colleague(s) will have to pay it back.

JaneHenery

Yes, be a snitch - best way to remain friends with your colleague and get a bad reputation at work. The fact that you chose to report it was your moral decision. The fact that your colleague didn't, is his moral decision, not yours. You only want to report him out of pique, because no moral crime is occurring here, unless you work for a very small firm that would be hit hard by this overpayment. Judging by the fact that it is sending people overseas, and is so negligent it doesn't bother stopping generous allowances, suggests it's a firm that can afford this, and doesn't really care. Even the fact that after you reported this he hasn't been asked to pay it back shows that the firm hasn't even bothered to check if this has happened elsewhere. Why are you doing their work for them? Other than to avenge yourself on your colleague, of course. 

Big companies behave immorally all the time, and much of capitalism is based on stealing from people. If you want to join in that's absolutely fine, but grassing up a colleague is not absolutely fine, UNLESS, as I say, this is a small company, when it might be more morally dubious to hold onto the allowance. I would suggest though that if it is a small firm it won't last long if they are so negligent as to miss over-paid allowances. 

Short answer - don't grass someone up because you are aggrieved that you are 'honest' and they are not