Hello, my name is***** am a qualified lawyer and I will be assisting you with your question today.
What reason have the provided for the overpayment?
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No problem at all
Many thanks for your patience. 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.
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Estoppel is not a service, it is a legal argument. So basically what has to happen is the employer makes a claim against you to recover the money and as a defence in court you use the principle of estoppel, then if the court agrees that estoppel applies they can prevent the employer from going any further with their claim. So it all depends on whether they actually take this to court and if you can satisfy the requirements to raise estoppel as a defence.
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