Overpayment of wages

[Inspector_Clouseau]

Hi everyone,

 

I am reaching out to you all for some advice due to the nightmare I have found myself.

 

In late 2007 I was off work due to illness and agreed to return to work in 2008 in reduced hours for a while to see how I settled in. All went well for a while with a review of my hours in mid 2008 which didn't happen so I told my manager but again nothing happened so I remained on reduced hours until 2009.

 

I decided to remain on my reduced hours so informed my manager to advise HR and adjust my wages to reflect my new hours but nothing happened I sent emails and also a letter to HR myself but again noting happened so I gave up after six months of trying to get my wages corrected to the correct rate.

 

Now in late 2010 things were getting worse and I have taken time off due to illness due to work and the stress of knowing that I have to pay back the overpayments which I would struggle to meet due to the possibility of dismissal due to ill health. In the last month after almost 2 years of trying to get my employers mistake corrected my wages have finally been paid at the correct rate.

 

My employer says I now owe them almost £11,000 (2008/2010) however I dispute this as in 2009 I got a new contract with my new hours so I would only owe £5,500 (2009/2010). My employer sent me a new contract last week but it was back dated to 2008 which I refused to sign, I've asked HR to send me copies of all of my 'signed' contracts but have heard nothing within the last 3 weeks.

 

I've heard of estoppel and I feel this maybe apply to my situation but need more clarification in estoppel. I have a union but they have been very coy about the whole situation saying to pay without fuss (easier said than done). I asked about an ERT but it was quickly dismissed due to costs. I have spoken to another union rep who said not to pay a penny as once I make payment I am admitting guilt which could open other avenues for my employer.

 

I feel totally trapped as paying would be a struggle and I've done everything within my power to make my employer aware they were paying me too much and to stop it. I don't know what to do next and I would appreciate your comments please.

 

Thanks,

 

J

[Sidewinder]

What a mess. The problem for you potentially is that you have previously acknowledged that you were being overpaid. In that respect, it may be decided that you should have reserved the overpayment in the event that it was later recalimed. After two years however, one should also have expected the employer to have realised the mistake (especially since you had pointed this out to them) and to have come to an arrangement to repay.

 

Do you have copies of the emails which you sent to HR - this is potentially very important, as it is evidence that you made efforts to resolve the situation and have the salary corrected?

 

Had you been genuinely under the impression that the salary you were receiving was correct, then this would make it harder to later reclaim the overpayment. You mention Estoppel, and whilst there may be some legitimacy to this claim, I fear that it would not stand up to scrutiny. For Estoppel to stand a chance, you would have to be able to demonstrate that not only was the mistake not of your own making, but also that you believed that the money was rightfully yours, and as I have already suggested, it would seem that this is not the case, so probably better to look elsewhere, although you might also be able to argue that there has been a change of position in order to negotiate a partial repayment.

 

Does your contract make any mention of how salary overpayments might be recovered? In the absence of any such provision, you need to be aware that the employer has a right under the exceptions to the law relating to Unlawful Deductions in that a salary overpayment can be simply recovered directly from future wages. For that reason, it is essential that at an early stage you raise a grievance to either challenge the fact that any such overpayment exists (ie that you believed you had been paid at the correct rate) or that you dispute the amount of the overpayment and demand further details of how it has been calculated. Only once this has been decided and agreed, can you discuss a mutually acceptable means of repayment.

 

Assuming that you do agree there has been an overpayment, and between you it can be agreed how much, then you should be allowed to repay in instalments over at least the same period that the additional payments were made - in this case around two years.

[Inspector_Clouseau]

Hi Sidewinder,

 

Yeap it's a mess okay which is causing be untold stress in that I've done everything I could to get it corrected, only regret it that I should have went to the CEO who would have kicked some butts. I have kept every scrap of paper and email I sent as course of habit I see what you mean about estoppel although my change of position is that I took out a personal loan in 2008 based in full time hours, it was undecided at the time if I was to return to full-time or change to part-time which I later did in 2009 once I finally got my review.

 

I am not happy that I was sent a new contract which was back-dated to 2008 and not 2009, I wrote back to HR advising them of this but have heard nothing since. As I am off work due to illness I have had very little contact with work although I am happy to speak to them at anytime, I'm starting to feel like a mushroom - kept in the dark and fed nothing but...!!

 

I imagine my time of employment is limited due to a previous period of ill health (work related) so taking repayment from future wages may not be an option I would then suspect it would involve lawyers, courts etc to reclaim any monies if my employment were to be terminated. The ball in pritty much in my employers court at the moment but as a multi-national company they are painstakingly slow to do anything even local management are useless.

 

Thanks again Sidewinder,

 

J

[Sidewinder]

No problem. It may be advisable considering the amounts involved and the effect that this is having on your health to take professional advice, however for the time being you should consider to push the point on the backdated contract, and it you should certainly not sign the one which you have!

 

The position after leaving the company is, if anything, slightly easier, since the only way of enforcing the 'debt' would be (besides them witholding any final salary) to take action through the County Court, and at least then any repayment would be based on your ability to pay - even at £1 a week if this is all that you could afford, but natuarally the possibility of a CCJ isn't desirable.

[Inspector_Clouseau]

Got a call from my manager to say that if I leave my job without asking for a leavers pack my employer will offset my 'debt' of £11k against a leavers pack. I feel as if a gun has just been put to my head and I've been asked to pull the trigger.

 

Do you think I should accept their offer and get out?

Edited January 5, 2011 by Inspector_Clouseau

[Sidewinder]

Not entirely sure what you mean by a 'leaver's pack'?

 

Can you clarify?

[Inspector_Clouseau]

My employer has offered 'leaver' packs to other people. It ranges from 3 months to 12 months wages depending on length of time with the business. So assuming I was offered 3 months it would work out at approx £3500. I know I could take the offer but I'd be out of a job but at least my £11k debt (overpayment) would be waived.

[Sidewinder]

Although I stand to be corrected, the way I see it is that the employer does have a right to expect repayment of the money, even though you can negotiate terms to do this, and if they are already looking to shed staff, even in return for an incentive payment, you may well find that you will be heading up the list of candidates pretty fast if you cause 'trouble'...

[Inspector_Clouseau]

I think I am already at the top of their list and I don't mean their Christmas card list -

 

I know jobs are very hard to get at the moment but maybe it's the lesser of two evils

1) stay and pay back X amount each week until God knows when and continue to watch my back or

2) leave and get on with my life but making sure my employer cannot make a claim on the overpayment X number of months/years down the line.

 

Thanks again Sidewinder for your words of wisdom

[SarEl]

I may be missing something here, but on what basis would the £11k that you owe the employer be waived if you leave? Because having the debt offset against the "leavers pack" (which was what you said originally) is not a waiver - it would only mean that any amount you recieved from this package would be deducted from the £11k and you would still owe the balance. which could then be claimed in county court if no arrangement was reached, and the employer has six years in which to do just that. I think you need to be very clear about what they are saying.