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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 47393
Experience:  Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
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Am I liable for an overpayment of salary when it occurred over

Resolved Question:

Am I liable for an overpayment of salary when it occurred over 2 years? I had no idea and there was no indication of this on my payslip. I'm a nurse and it was working time directive pay. I should have received approximately £30 a month but received £60. The mistake only came to light when I left the hospital trust I was working for.
Thank you H Murray
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. How much do you owe them now?

Customer: £748 and solicitor and court costs app £900
Ben Jones :

Do you still work for them?

Customer: No and haven't for 2 years
Customer: I have been sent a court order form to complete
Ben Jones :

ok let me get my response ready please

Customer: Is this emailed to me?
Ben Jones :

no it will be on here shortly

Customer: Is it just the one off payment?
Ben Jones :

yes

Ben Jones :

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. However, if that is not possible you will still be liable for the repayments and you will have to try and agree something with the employer or face the claim and then rely on the court to decide how much and how often to pay.

Customer: All of the above apply accept I can't honestly say I made additional purchases? I genuinely believed I was entitled to this money. Also I received no WTD pay for my first year of employment and therefore was given this in one lump sum when they realised?
Ben Jones :

the last requirement is traditionally the hardest to prove and it is where most people would fail in their attempts to prevent the overpayments. So the likelihood is that you probably will be liable and it is about trying to agree on some sort of a repayment plan with the employer...£15 monthly is unlikely to be accepted but something a bit more realistic may be considered by them

Customer: Thank you
Ben Jones :

you are welcome

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