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Ben Jones
Ben Jones, UK Lawyer
Category: Law
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Experience:  Qualified Solicitor - Please start your question with 'For Ben Jones'
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Hi there, I have just been informed that my employed has overpaid

Customer Question

Hi there, I have just been informed that my employed has overpaid me by approximately £200 per month since April 2011. In April 2011 my contract of 13.5 hours being cut to just 4. I have not noticed this overpayment as i work across a number of sites and have different pay rates for the same company.

The company is about to ask me to repay the overpayment accrued within the last 12 months which is due to a head office mistake - not mine! I do not have this money to pay them and they've also suggested that i wont be paid for overtime until the money is paid back. This will mean that my contacted hours will be all get which equates to about £100 per month - of which there is he threat to deduct some & also the lack of overtime payment - i get the impression i'd be expected to work for free - i cannot see how this is fair and will leave me in a wreck and ill be bringing in less that 100 per month and wont be able to cover my direct debits - let alone living costs - which i can do now.

Aside to this job i have started some self employed work coaching athletics but currently whilst i build it up i cannot reply on it as it's just about breaking even so far with limited sessions that i am earning for.

I am extremely worried. Please advise?
Submitted: 3 years ago.
Category: Law
Expert:  Ben Jones replied 3 years ago.
Hello, my name is Ben and it is my pleasure to assist you with your question today. The starting point is that if you have been overpaid by your employer, then that is not money to which you are legally entitled and it should be repaid.

The Employment Rights Act 1996 allows an employer to automatically deduct overpayments from your wages without seeking your consent. However, they still need to ac within the implied term of mutual trust and confidence so they would need to ensure the deduction amounts are fair and reasonable whilst not living you significantly underpaid.

However, an employee may be able to use the defence of ‘estoppel’ to resist an employer's recovery of an overpayment on grounds of unfairness. For example, in the case of County Council of Avon v Howlett, a teacher was paid more sick pay than he was entitled to. The teacher queried the overpayments but was told 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 council from recovering the whole sum of the overpayment.

Case law has evolved somewhat since then, but it has become an acceptable principle that 'estoppel' can apply if the following conditions are met:
• The employee genuinely believed they were entitled to the money, or did not even realise that they were being overpaid
• The overpayments were made following an error on the employer's part
• The employee has since 'changed their position', meaning they have spent the money in question

So whilst the employer is justified in pursuing the money at this stage, there are ways of defending such a claim. However, that will only potentially be possible if the above conditions are made and if the employee was aware they were being overpaid and did nothing to rectify that, then it is unlikely there will be a defence.

I hope this has answered your query for now and would be grateful if you could please take a second to leave a positive rating. Your question will not close and I can continue providing further advice if necessary. Thank you

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