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Ben Jones
Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 48769
Experience:  Qualified Solicitor - Please start your question with 'For Ben Jones'
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Good afternoon, I resigned from a company recently and

Customer Question

Good afternoon,

I resigned from a company recently and in my last salary payment, have been overpaid by around half a month's salary. This has been put down to poor internal communication around my leaving date, even though it had been clearly stated in my written communication correspondence. Essentially, I am now being threatened with being taken to the small claims court. Am I legally bound, or liable for the repayment of this money?

Thanks in advance,
Jeremy.
Submitted: 4 years ago.
Category: Law
Expert:  Ben Jones replied 4 years ago.

Ben Jones :

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

Ben Jones :

Before proceeding please note that as I am a practising solicitor, I am often in and out of meetings, travelling between clients or even at court when I pick your question up. This may even occur at weekends. Therefore, I apologise in advance but there may be a delay in getting back to you and providing my advice. Please be patient and I will respond as soon as I can. You do not have to wait here and you will receive an email when I have responded. For now please let me know how long you have worked there

JACUSTOMER-bcpel996- :

April 23rd, 2013 - August 19th, 2013.

Ben Jones :

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.

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.

JACUSTOMER-bcpel996- :

Ben,

JACUSTOMER-bcpel996- :

Ben, Thank you for that response. Essentially, as 2.3 of the 3 points you have made above apply to me, I am going to stand my ground on this point.

Ben Jones :

ok you have noting to lose by trying but it does not prevent the employer from pursuing this matter further if they wanted to - they are entirely within their right to make a claim against you if they wanted to and in that case you would have to argue these points in court and hope that they agree with you and do not find in the employer's favour.

I hope this has answered your query. Please take a second to leave a positive rating, or if you are unhappy for some reason with the advice - please get back to me and I will assist further as best as I can. Thank you very much