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Ben Jones
Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 47870
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I left a previous employment in March 2013. I received a letter

Resolved Question:

I left a previous employment in March 2013. I received a letter from them saying they had overpaid me. I have received another letter saying that if I don't pay them back they will pass this on to a Debt collection company.
I never realised they overpaid me and do not have the money to pay them back at this time, where do I stand.
As a matter of interest, I don't think I ever officially signed a contract with this company. I was meant to, but when it was sent to me it had somebody else's name on it. I mentioned this at the time, but I do not think it was ever signed. Does this have any relevance?
Submitted: 3 years ago.
Category: 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. When did you realise you were being overpaid?

Customer:

they first sent me a letter in July 2013

Ben Jones :

ok so yo did not know you were being overpaid at the time it was happening?

Customer:

no, I was working overseas and never received anything by way of a pay statement from them.

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


 


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.


 

Ben Jones :

Please let me know if this has answered your original question or if you need me to clarify anything else for you in relation to this? Thanks

Customer:

Thanks for that Ben,

Customer:

does the fact that I don't think a signed employment contract exists have any bearing on the outome?

Ben Jones :

that won't necessarily matter if you had agreed a rate/pay beforehand as that would create an implied contract anyway, but if there was uncertainty over what you were due because there was no contract then it would work in your favour

Customer:

Ok thanks, XXXXX XXXXX been very helpful.

Ben Jones :

you are most welcome, all the best

Customer:

as soon as it lets me i'll leave your feedback. take it easy

Ben Jones :

many thanks

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