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How long ago was the redundancy payment made to you and how long after this has the error been picked up by your previous employer?
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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. Whilst you were disappointed that they did mot offer you any additional compensation, that is not a reason to keep the money because unless you had the contractual right to enhanced redundancy, they would have only been obliged to pay you the statutory minimum 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.
Also note that there is no guarantee that they will take this matter further such as through the courts. This is indeed a civil debt so do not worry about criminal implications. It all depends on them deciding that it is worth issuing legal proceedings in the county court as to whether this goes any further. They may issue threats and send debt collectors after you but only a court can force you to pay so you would be relying on the employer deciding it is a debt worth pursuing.
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Thank you. 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.
I am not sure you would satisfy this because you have not changed your position, you merely transferred the money to savings. So overall I the employer was to pursue you for this money then they are likely to succeed in recovering it. In the end, errors do happen, as long as humans are involved in something there will be errors. You have not been greatly inconvenienced in the grand scheme of things here – you were paid money that was not yours, you quickly transferred it over to a different account and now are being asked to return it. The right (and legal) thing to do is return it and unless you have suffered any actual losses (not inconvenience as that is not compensated) , then you cannot ask for any compensation either
You are welcome, all the best