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Kevin More
Member - 1 post
It has been discovered that a member of staff has been getting paid more than they should be. What legal right has the organisation in claiming back the overpayment?
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James Fairchild
Member - 210 posts
An uphill battle, I would suggest.
What is the nature of the overpayment, and do you have any idea how this could have arisen? Is the employee theirself aware of this yet? Do they agree that a mistake has happened?
Whatever you do, do not deduct the whole amount from their next months' pay as a tribunal is likely to take a very dim view of that. Instead, get the employees' agreement that this has happened and should be corrected, and get the employee to set a timeframe with you for small monthly deductions. If the employee has left, then I expect the most cost effective advice is to wave goodbye to the cash - though obviously not if this is employee fraud.
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sheena farenden
Member - 52 posts
Kevin
If this is an error on the employers part and the employee had no way of knowing this error was being made, I suggest take it as a loss.
I understand that if this employee has spent the money in good faith and cannot afford to repay it it could prove a problem. My own employer wrote of such an error.
Obviously how you deal with continuing to pay an amount also has to be looked at carefully.
I would suggest ringing ACAS for advice.
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Colin England
Member - 55 posts
James Fairchild asks the right question "Is the employee aware of the mistake?" If she is not aware and has acted in good faith then the doctrine of equitable estoppel comes into play. Under that rule of law if someone (the employer- person A) repesents a situation as being the correct position and then someone (person B) with a legal realtionship to the person A acts on the representation made and has no knowledge that the representation might be wrong or false, then person A cannot afterwards claim that they made a mistake.
So applying the rule of equitable estoppel in this case. The employer made a payment of wages and thereby represented to t he employee that the employee was due that sum in wages, the employer cannot later reclaim the money as being paid by mistake.
It is up to the employer to make sure that all wages and other payments are made correctlya nd int eh right sum. There should be a full annual audit and other checks - eg to make sure that that people on the wages sheet are still actually employed by the company.
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Colin England
Member - 55 posts
A second thought
If the employer does ask for the money back they may then be criminally liable foratempting to obtain money by false representation. If they do actually get the money back they may be guilty of obtaining money by false representation. All staff involved in getting or attempting to get back the money may be guilty of conspiracy to ....
Choate and inchoate offences --
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Lynne Burns - Vizards Tweedie
Online advisor - 4 posts
If you have overpaid an employee you can reclaim monies overpaid by mistake, however in respect of anything else you will need an express clause in the contract.
Depending on the amount, I would advise setting up a meeting with the employee to discuss the way forward.
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