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Ben Jones
Ben Jones, UK Lawyer
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If I have been overpaid last 5 years without knowing,how far

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If I have been overpaid for the last 5 years without knowing,how far back can an employer go to ask for the money back.
Submitted: 1 year ago.
Category: Law
Expert:  Ben Jones replied 1 year ago.

Hello, my name is***** am a qualified lawyer and it is my pleasure to assist you with your question today.

Expert:  Ben Jones replied 1 year ago.

Why were the overpayments made?

Customer: replied 1 year ago.
I am asking on behalf of a friend who runs fitness classes at the local sports centre and works for the council. She also does extra shifts on the reception etc. She hadn't noticed the over payment until now and actually informed them.
Expert:  Ben Jones replied 1 year ago.

Hi sorry I was offline by the time you had replied. Is the person an employee or self employed and what is the amount owing?

Customer: replied 1 year ago.
Employee and approx £6930
Expert:  Ben Jones replied 1 year ago.

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. The employer could try and claim as far as 6 years back so there should be no issue with repaying the full amount.

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.

This is your basic legal position. I have more detailed advice for you in terms of the ways estoppel operates and how it can be used here, which I wish to discuss so please take a second to leave a positive rating for the service so far (by selecting 3, 4 or 5 stars) and I can continue with that and answer any further questions you may have. Don’t worry, there is no extra cost and leaving a rating will not close the question and we can continue this discussion. Thank you

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Expert:  Ben Jones replied 1 year ago.

Thanks. 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.

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