Overpayment of wages

[Lindsay26]

I really need some advice

I left the company I work for three months ago to train to be a primary school teacher. I have worked for this company for 4 years and during that time I bought my own place and moved out of my parents, I never got round to telling the company my new address.

Anyway, I left in september and started Uni -during this time the comapny who I had worked for was taken over by another company. What seems to have happened is that I was never taken off payroll, even though I handed in a resignation letter. So The new company carried on paying my wages, the payslips and other information was being sent to my parents house so I had no idea.

In october I noticed I had money in my account but i just thought it was my student loan, this month however I did notice and also went routing through my parents mail and found the wage slips. I called them up and told them and now they want all their money back. I just want to know legally where I stand, I have spent alot of it on generally supporting myself while studying and cant afford to pay it all back in one lump sum. Its really thrown me I have been so engrossed in doing my PGCE this is all I need. They have written me a snooty letter telling me to stick a chq in it for the whole lot.

What can I do??
Please advise
Thanks

 

[General Ludd]

Legally it's there's and they have every right to demand it back. But give them a call and you should be able to work some kind of deal out where you pay them back over a period of time because they'd much prefer you pay them back in the end rather than it ending up in court or you bankrupt.

 

[WasGeri]

My friend had this when she left her job. She refused to pay them back on the basis that it was their mistake and they took her to Court and won.

 

[innit]

There is nothing you can do but pay it back, I'm afraid. I have been on both sides of this - I once had a summer holiday job sending threatening letters to people who had been overpaid, and a few years later I was overpaid by an ex-employer to the tune of almost a thousand pounds. It hurt, but I paid it back! Employers should be wise to this, and any good contract of employment will include a clause where you agree to repay any payments you weren't entitled to. Even if you had a patchy contract which didn't include this, a court will almost certainly find for your ex-employer.

General Ludd is right, you should be able to negotiate to pay it back in instalments. When I was reclaiming overpayments, our rule of thumb was that you could repay the money over the same period that it was paid to you, ie if it was made as one lump payment, you have to pay it straight back in one go; if it was paid over three months, you pay it back in three monthly instalments - but I'm not sure if that was a legal thing or if it was just our way of doing things. As you are a student, you might be able to get them to make a special allowance for you to pay it back over a longer period.

Good luck!

 

[Lindsay26]

Thanks Guys its pretty much what i thought I just wanted to check. I just hope they will let me pay it back in installments then as there is no way I can afford it in one lump sum.. This whole thing is a complete bummer!!!

 

[belboid]

the only way not to pay such a sum back is if you can show good reason why you didn't realise you weren't entitled to the money. you could try the reason you quoted above, but i'd be utterly amazed is any magistrate accepted it!

There's no 'should be able to' about negotiating paying it back in installments. It was the companies mistake, and you shouldn't be put out by having to correct there error for them. Point out your situaton, blah blah, and offer to xcome to an arrangement to repay over time. They're not going to really want to go to court either, it could cost them as much in fee's as they'd get back in wages.

 

[Donna Ferentes]

One of the many reasons it's a good idea to be in a trade union is that they have a lot of experience in this kind of thing and can advise you not only on law but on precedent in given organisations.

 

[Streathamite]

do they know your new address? because if not, I'd be tempted to change bank accounts, and then tell them to shove it.
Otherwise, I am afraid the employer is in the right.
Justin's suggestion is a good one - try a union rep.

 

[aylee]

OK, let's get down to some real law here.

Section 15(1) of the Employment Rights Act 1996 says:

An employer shall not receive a payment from a worker employed by him unless-

(a) the payment is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker's contract, or

(b) the worker has previously signified in writing his agreement or consent to the making of the payment.

Nice. Unfortunately, section 16(1) then says:

Section 15 does not apply to a payment received from a worker by his employer where the purpose of the payment is the reimbursement of the employer in respect of-

(a) an overpayment of wages, or

(b) an overpayment in respect of expenses incurred by the worker in carrying out his employment,

made (for any reason) by the employer to the worker.

So the employer may fall back on its common law right to bring a claim for restitution of the overpaid monies. Your only possible defence to this is "change of position". Your argument here would be that you thought you were entitled to the money and arranged your financial affairs on the basis that you were entitled to it, as in the case of Avon County Council v Howlett (1983).

On the basis of what you say, you might possibly have a defence. Perhaps the best thing would be for you to write them a firm letter which makes it clear that you know what your rights are. I suggest that you consult your local CAB or Law Centre about the letter.

Good luck!

 

[Lindsay26]

Thanks Guys thats really helpful.. I am going to my local law centre tomorrow to see if they can help me structure a good letter. I have a feeling it'll all come down to the same thing and that I'll need to pay it back..but i'm hoping i can at least pay it back bit by bit..

Cheers

OK, let's get down to some real law here.

Section 15(1) of the Employment Rights Act 1996 says:



Nice. Unfortunately, section 16(1) then says:



So the employer may fall back on its common law right to bring a claim for restitution of the overpaid monies. Your only possible defence to this is "change of position". Your argument here would be that you thought you were entitled to the money and arranged your financial affairs on the basis that you were entitled to it, as in the case of Avon County Council v Howlett (1983).

On the basis of what you say, you might possibly have a defence. Perhaps the best thing would be for you to write them a firm letter which makes it clear that you know what your rights are. I suggest that you consult your local CAB or Law Centre about the letter.

Good luck!

 

[Donna Ferentes]

Grrrrr