ERROR! | Boss demands worker pays back £20k after being overpaid

Boss demands worker pays back £20k after being overpaid

When an employee’s paycheque arrives at the end of the week or month, they will be able to spend this money on whatever this wish – whether this is used to cover rent, pay bills, treat pets or kids or to put towards luxury holidays.

Ensuring that staff members are paid correctly in the first place is crucial to avoid any issues for both the employer and the employee.

Yet, one worker has reportedly been sent a hefty £20,000 bill from her boss after the firm said that an error had been made in 2009. The firm said that she had been overpaid ever since then - Wales Online reported.

Leah Francis, who has worked for the firm since 2004, told The Mirror that the company had made an error when she went on maternity leave in 2009.

The company, who is asking for the money back, claimed that she has been overpaid £250 per month for every month since she returned to work.

Francis told the publication: "In 2009, I went on maternity leave for one year. Before my last day of work, I submitted a request to change my working contract from full time to term time.

"It was granted. I received no contract but continued to work under my new term time guidelines.

"In 2019, I innocently showed a colleague my payslip. She said I was earning more than I should. Now, one year later, I'm told I've been overpaid by £20,000 over 10 years and they want it all back.”

The worker went on to explain that she is on working and child tax credits and with having a reduced pay, it is has been a bit of a struggle.

Francis added: "Of all the small pay rises that have happened since, this should have been picked up. In fact, they had no clue. Like I never did. They had no clue."

This story highlights the importance of strong payroll systems in the workplace to avoid any errors of a similar nature from occurring.

According to general guidance published on Acas, an employer is able to deduct money from an employee’s pay for the following reasons:

  • The employment contract specifically allows it

  • It’s been agreed in writing beforehand

  • You’ve overpaid them by mistake

  • It’s required by law – for example Income Tax or a court order

  • They missed work to be on strike or take industrial action.

‘Potential opportunities to defend such a claim’

Despite this, David Bradley, Head of Employment Law at Ramsdens Solicitors, said that there may be “opportunities to defend such a claim”.

He told HR Grapevine: “We would need to know what the contract of employment said but it is not unusual for them to contain terms to recover overpayments.

“The employers claim is likely to be based on ‘mistake’ and the claim would be for ‘restitution’ in the alternative to a straight claim for repayment under the contract."

“The employee may seek to argue a limitation period of six years from the date of payments and that would remove a significant amount and another defence would be that the employees circumstances have changed as a consequence of the overpayment, ie she has spent it innocently and adjusted her life to that salary.”

In addition, Bradley said that there may also be a defence of ‘estoppel’ where “the employer is prevented from claiming by the actions it has taken as representing the actual salary as the true salary”.

“Finally, the employee should look at the wording of any letters of salary change over the [ten] years as they may state the salary the employer is paying and it would probably be difficult for the employer to then argue otherwise," Bradley added.

‘Consider the potential effect on the employment relationship’

In addition to this, Jayne Harrison, Head of Employment Law at Richard Nelson LLP, told HR Grapevine that if the employer does try to recover the overpayment then it should consider how this may impact the employment relationship.

The legal expert explained: “And in particular whether such a course of action is likely to breach the implied term of trust and confidence as this could result in the employee resigning and bringing a claim in the Employment Tribunal”.

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Harrison added: "It would be prudent for the employee to discuss this matter with the employer to see if an agreement can be reached as to the way forward.

“This might involve discussing a possible schedule for repayment but that minimises the effect on the employee; as the overpayment is substantial, such an agreement may involve writing off part of the overpayment as well."

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