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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 47863
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Took temp 6 month job in local nursery. Overpaid salary by

Resolved Question:

Took temp 6 month job in local nursery. Overpaid salary by 2 mths( august + sept). P45 leaving date says 31st August. County council want all back or take to court. I have tried to sort this out since November 13. They wont return my phone calls, havent sent me the breakdown of the payments I requested. Dont know what to do now. I just need some clarification on this issue.
Submitted: 3 years ago.
Category: Employment Law
Expert:  Ben Jones replied 3 years ago.

Ben Jones :

Hello, my name is XXXXX XXXXX it is my pleasure to assist you with your question today.

Ben Jones :

Do you mean that once you left the job you continued being paid by them?

Customer:

Yes I got paid in august 13 then again in sept. I telephoned them beginning of sept regarding August pay and was told it was correct as its how they calculate holudays ect for teachers and other members of staff. My husband lost his job in September so I didnt realise another payment had gone in as it all got eaten by debts and overdraft.

Ben Jones :

How much are they pursuing you for and do you agree that you were overpaid by them?

Customer:

2 months pay equals 900 pounds. I do agree that I probably owe some but if my p45 says a leaving date of 31 August surely I only owe 1 month salary. Im very confused by this and as I said they haven't been any help.

Ben Jones :

Well whether you were overpaid is really a factual matter, you worked for 6 months and you would know whether you were paid for 6 or 7 or 8...it would come down to checking all payslips and the payments history to check what you were paid for and what periods that covered.


The legal position is that if someone has genuinely been overpaid by their employer, then that is not money to which they are legally entitled and it should be repaid.


 


However, an employee may be able to use the legal defence of ‘estoppel’ to resist an employer's recovery of an overpayment. One of the main cases dealing with this is that of County Council of Avon v Howlett. The employee was a teacher who was paid more sick pay than he was entitled to. The teacher queried the overpayments with the employer but was assured they were correct. By the time the Council had realised their mistake, the teacher had spent most of that money. The Court of Appeal held that the defence of estoppel prevented the employer from recovering the whole sum of the overpayment.


 


The way estoppel operates is that if the following conditions are satisfied, then an employee should be able to use it as a defence to resist the recovery of an earlier overpayment:



  • The overpayments were made due to an error by the employer

  • The employee genuinely believed they were entitled to the money, or did not even realise that they were being overpaid

  • The employee has since 'changed their position', meaning they have spent the money in question. However, this does not mean just spending it on usual items of expenditure, such as bills, everyday spending, etc – you must have gone out of your way and changed your position, such as making additional purchases which you would not have done had you not received that money.


 


So whilst there is nothing stopping an employer from pursuing a claim to recover an overpayment, if the above conditions are satisfied then an employee could raise the defence of 'estoppel' and prevent the claim for proceeding any further.

If you cannot meet the above criteria (for example the main problem I see is that the expenses the money were spent on were just normal spendings that would have had to be made anyway), then you would have to repay the money. There is nothing stopping the employer from taking this further but you may wish to negotiate with them and offer monthly repayment for example, especially as it was their fault that you were paid extra and they confirmed it was ok.

Customer:

Ok thats fine. I will contact them again to do that. What about the p45? Surely the date is wrong. I need that to be accurate for tax purposes.

Ben Jones :

Again that is a factual issue - you know when your last day working for them was and it should reflect on the P45. If you disagree with the date on the P45 then you can ask them to amend it or contact HMRC direct to make them aware

Customer:

Ok thank you for your help.

Ben Jones :

you are most welcome, all the best

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