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Ben Jones
Ben Jones, UK Lawyer
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This concerns a final pay check overpayment that my former

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This concerns a final pay check overpayment that my former employer is now asking for.
As this over payment came about as a direct result of my manager failing to notify the payroll department in a timely fashion when I handed in my notice on 08.01.15, 1 month in advance of my resignation on 08.02.15. I am led to understand that the payroll department was only notified of my resignation in March 2015.
At the time that I received my final pay check, my thoughts were that, yes, it was more than I had expected, but that I had been working nights for the last month and really had no idea as to how much I would be paid for them. I was also under a lot of stress due to a multitude of factors, distracting me from querying any discrepancies in my final salary. These would include moving across the country, starting a new job, family concerns that required I travel to South Africa in February (father was diagnosed with Liver cancer and was deteriorating fast)) and again in April (final stages of cancer and death of my father). I did not become aware of this over payment until my return from South Africa on 26.04.15 and the money had already been spent. During this time, I was also given a 4 week sick note by my GP for stress related problems.
Am I required to repay this amount of £1060.41? If so, if I were to offer them a repayment of £25/month over the next 3 and a bit years, would they be obliged to accept it as I am indicating a willingness to pay.
Many thanks for your time.
Rory Horton
Hello, my name is ***** ***** it is my pleasure to assist you with your question today. Has the employer stated they will take this further if you do not pay?
Customer: replied 2 years ago.

Hi Ben.

No, they have not. I did have a conversation with one of the finance/payroll people when I found this out, and no mention was made of any intention to take this any further. Admittedly, at the time, I did state that it was my intention to pay, but that it would be in small monthly instalments. This was a telephone conversation and I was not advised that it would be recorded. I had only just returned from SA and opened the letter advising me of the over payment at the time and was not thinking clearly. In neither telephone or postal correspondence, has there been any mention of legal proceedings.

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.
I hope this has answered your query. Please take a second to leave a positive rating, or if you need me to clarify anything before you go - please get back to me and I will assist further as best as I can. Thank you
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