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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 49818
Experience:  Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
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where a former employer has overpaid salary both during the

Customer Question

where a former employer has overpaid salary both during the period of employment and has continued to pay monies into the former employees bank account at least in the first month following the termination of employment - WHAT ARE THE LEGAL REQUIREMENTS FOR THE FORMER EMPLOYEE TO HAVE TO REPAY OVERPAYMENTS OF SALARY MADE
Submitted: 3 years ago.
Category: Employment Law
Expert:  Ben Jones replied 3 years ago.
Ben Jones : Hello, my name is ***** ***** it is my pleasure to assist you with your question today. Does the employer owe any more money to the employee or have they paid them for everything they are due and in addition made overpayments? Please note I am in tribunal so will respond later this morning thank you
JACUSTOMER-ornknpd8- :

everything due has beden paid - nothing is owed

JACUSTOMER-ornknpd8- :

when will i receive an answer

JACUSTOMER-ornknpd8- :

i have paid a fee and received nothing

Ben Jones :

Hi sorry due to the time of the year there has been a reduced service so we have not been able to respond immediately to all customers.

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. Until the employer owes the employee money they can directly deduct what has been overpaid from their wages. If they do not owe them anything then they cannot just force the employee to repay them and if the employee refuses the employer would have to go to court to try and get a court judgment against them, requiring them to pay.

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.

Hope this clarifies your position? If you could please let me know that would be great, thank you and a Happy Christmas

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