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Ben Jones
Ben Jones, UK Lawyer
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I recently recieved a payment from an ex employer I left in

Resolved Question:

I recently recieved a payment from an ex employer I left in November, I contacted them as a gesture of good will and sent them a cheque in the post for the amount they say it hasn't arrived and are calling me constantly and its bordering on harassment, I am now feeling the urge to keep the money as I have committed no wrongs and believe them to be unreasonable, I was wishing to know where stand from a legal stand point?
Submitted: 2 years ago.
Category: Law
Expert:  Ben Jones replied 2 years ago.
Ben Jones : Hello, my name is ***** ***** it is my pleasure to assist you with your question today. Have you checked to confirm the cheque has not been banked and have you cancelled it?
Customer:

Yes the money hasn't been taking and I have not cancelled it but I was wanting advice on the stand point of keeping the money

Ben Jones :

Hello, sorry I was offline by the time you replied earlier. 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 estoppel cannot be shown, the employer could succeed with any legal claim they decide to pursue and require you to pay that money back. As you knew that you had received the money it is highly unlikely that estoppel would apply so you would unlikely have a defence should they decide to pursue this matter further.

I hope this clarifies your position? If you could please quickly let me know that would be great, as it is important for us to keep track of customer satisfaction. Thank you

Customer:

I have sent the money via cheque in good faith and they have been phoning me twice a day from the day I've sent it and now I'm reluctant to even speak with them, does them harrasing me count for anything?

Ben Jones :

You may have sent a cheque but they may have genuinely not received it - it could have been lost in the post, you just do not know. And them harassing you (or actually pursuing the payment legally owed to them) does not change your legal position unfortunately - it does not remove your liability to return that money so it is best to try and make alternative arrangements to try and repay that and put an end to the matter

Ben Jones :

Does this clarify things for you?

Customer:

Yes thank you

Ben Jones :

you are welcome, all the best

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