recovery of overpayment

[jaylime]

i would appreciate any advice on this one comrades.i have recieved a letter telling me i owe £6.500 in overpayment as i have been getting 600 allowance for 5 years and only driving combos in that time.i dont mind paying it back but the repayment options are ridiculous,the lowest one is £52.00 a week.also the letters are almost like there from some big heavy handed debt recovery agency.i am prepared to pay £10 to £20 back a week.what i want to know is will they acceptmy offer and can they take money off me without my permission(i read that they cant) cheers for listening.JL

[apple]

all that i can tell you is what happened to us, it defaults to 10% if you cannot come to an agreement about how much you pay back each week, not sure on the agreements at all, i went to a stage 3 but then i didn't agree that i owed them the money that they said i did

others in the office just came to an agreement with the manager really, explained there situation with him [kids mortgage etc] and then came to a mutually agreeable figure to be paid back each week, hope that helps a bit, but consult your union rep we never had one so that made it a bit difficult

RM has enough bad press without making you unable to pay your mortgage because your paying them back
hope that helps a bit

[Darren Bent]

offer to use the bonus earned and 15 pounds a week. Just an idea.

[jaylime]

not a bad idea but i wanted to buy a new guitar with my bonus,i suppose i will have to delve into my concience.

[TrueBlueTerrier]

Overpayment of wages http://www.legalpulse.com/index.php?opt ... &Itemid=59" onclick="window.open(this.href);return false;

If an employer claims that you owe them money can they ask for it back and, if you refuse, can they deduct it from your wages?

Actually, it’s easier to answer the second part of the question first. It is wholly illegal for your employer to make any deduction from your wages which is not either required by law or has been agreed by you.

So, income tax deductions and national insurance contributions can (and indeed must) be deducted from your wages before you are paid. These are statutory deductions. Deductions ordered by a court, such as maintenance payments or payments for a fine are also legitimate.

Where employers pay a hefty sum of money for training, many of them will require that the employee pay all or part of this sum back if they leave within a certain period of time. Some of these agreements will include a clause allowing the employer to deduct the sum from the final payment made to the employee.

Relatively few employers will include a clause within the employment contract that gives them permission to deduct overpayments but if such a clause is included within the contract then the employer is entitled to take back any overpayment by deducting it from your wages. (Though it could be argued that if the overpayment was their mistake and then the deduction left you short, the employer might be liable for ‘damages’ such as bank charges incurred, etc).

So, in most cases, employers are not allowed to take money directly from your wages. But can they demand that you give the money back?

Well, this is where common sense and the law part company and why it often pays to consult a lawyer before acting. Many people would think that the money belongs to the employer and the employee must return it but it’s just not that simple.

First it depends why the overpayment was made – was the overpayment made as a result of a ‘mistake in law’ or a ‘mistake in fact’?

A mistake in law is where the employer incorrectly interprets statutory regulations or legal instruments – no clearer? – well, suppose an employer had to decide whether a particular regulation applied to you, and suppose this regulation regarded whether or not a particular allowance applied to you – so the employer decides that the allowance does apply to you, makes the relevant payment to you, and then later finds out that they were wrong and you shouldn’t have had the money – that’s a mistake in law.

And a mistake in fact? You submit an overtime sheet that says you’ve done 2 hours overtime and someone enters the figure as 20. Simple errors of one kind or another. A mistake in fact.


Still keeping up? So, either the overpayment is a mistake in law or a mistake in fact. (Actually, even then it’s not so simple – an employer desperate to get money back might argue that an overpayment was one rather than the other – but this usually applies to really high earners or where large numbers of employees have been overpaid and it’s all gone to court). Why does it matter whether it’s one or the other?

This – if the overpayment is due to a mistake of law then tough – the employer can’t demand their money back. They can ask, and you might decide it is wise to give it back to keep your employer sweet, but they cannot demand you pay it, and if they took you to court they would lose (so long as your solicitor is up on this aspect of the law).

But, if it is a mistake in fact, then the employer may be entitled to demand the money back.

May? Why only ‘may’?

Ah, well, here’s another thing. Even if the overpayment was due to a mistake in fact the employer cannot recover the money if the following three conditions are met - if the employer has lead the employee to believe the money was theirs (one suspects that the provision of a wage slip including the amount would suffice); if the mistake was primarily not the fault of the employee (so you can’t mislead the employer); and if the employee has subsequently spent the money or used the money to change their lifestyle in some way (e.g. bought a car on HP).

It is not completely clear cut, however, and, if the sum is large enough and the employer is determined, they may take the matter to court and look for an order demanding that the money is returned. Generally the courts will seek to do what is just in the circumstances. In order to do this the courts will take into consideration the amount of the overpayment, the level of negligence and whether or not the recipient knew or should have known about the overpayment.

These then are the legalities surrounding the matter. In general it is very difficult for an employer to recover an overpayment but there are limits. Legalpulse had a query from one individual who was normally paid £500 per month by an employer – this month, however, they had been paid £50,000 and wanted to know if they could keep it!! It is hard to imagine any court accepting this individual had not realised that they had been overpaid – sorry, but the money had to go back!

______________________________________

Need something to impress your employer? Or even prompt your solicitor? Here’s the case law -

"Mistake of law" : the Court of Appeal in Holt v Markham 1923 1 KB 504.
"Mistake of fact" : County Council of Avon v Howlett (1983 IRLR 171).

[TrueBlueTerrier]

http://www.direct.gov.uk/en/Employment/ ... /DG_175878" onclick="window.open(this.href);return false;

Rules for making deductions from your pay

Your employer is not allowed to make a deduction from your pay or wages unless:

it is required or allowed by law, for example National Insurance, income tax or student loan repayments
you agree in writing to a deduction
your contract of employment says they can
it is a result of any statutory disciplinary proceedings
there is a statutory payment due to a public authority
you have not worked due to taking part in a strike or industrial action
it is to recover an earlier overpayment of wages or expenses
it is a result of a court order or Employment Tribunal decision

If you were overpaid in error, instead of making a deduction, your employer may try to recover the overpayment by making an application for a court order. For more information about how and when you might be able to prevent your employer from taking back an overpayment, you should speak to one of the following:
a solicitor
an Advisory, Conciliation and Arbitration Service (Acas) advisor; this is the Labour Relations Agency in Northern Ireland
a Citizens Advice Bureau advisor

[TrueBlueTerrier]

http://www.lemon-co.co.uk/article_overpayments.php" onclick="window.open(this.href);return false;

Overpayments

In businesses operating computerised payroll systems, it is not unusual for an occasional error to arise resulting in a mistaken overpayment to an employee. This might take the form of an overpayment of basic rate pay or overtime pay or commission/bonus. The payslip is often fairly complex and employees sometimes fail to thoroughly check its contents. It can sometimes be a matter of weeks or even months before the employee or the business realise that an overpayment has taken place. In this situation, the legal question is whether the company are entitled to recover the overpayment and, if so, by what means.

In order to show that an overpayment is not recoverable, then the employee must demonstrate three things. Firstly, it must be shown that the overpayment was the fault of the company and not the employee. Secondly, it must have been reasonable for the employee not to know that they were being overpaid. Thirdly, the employee must have acted to their disadvantage or the assumption that the payment of salary was correct (for example by spending the money!). The most common difficulty for employees is the second condition since it is often obvious when an overpayment has occurred. It is not acceptable for an employee to assume that they have received a substantial increase in pay unless there is some reason to believe that this is the case.

The Employment Rights Act 1996 provides that it will not be an illegal deduction from wages to recover an overpayment from salary. This means that an employer is not prevented from deducting the overpayment from future wages or salary provided that this is done reasonably over a period of time and not done in such a way as to amount to a breach of trust and confidence in the employment relationship. The interesting point about the Employment Rights Act is that overpayments can be recovered from future wages whether or not the overpayment itself is recoverable from the employee on the basis of the three point test set out above.

In practice, the employer can simply recover an overpayment from wages and the onus is on the employee to then make a legal claim to attempt to claim back the money that has been wrongly deducted. This involves bringing a claim to the County Court and is inevitably rather complex. The employee will have to show that all of the three conditions outlined above have been met and this is often difficult.

Assuming that the employer intends to recover the overpayment from wages, then there is no fixed rule about the rate of recovery and whether this should be in one lump sum or over a period of months. However, there is a general rule that an employer must not act in such a way as to undermine the employment relationship or to breach trust and confidence. In the light of this general duty, the best advice for an employer is to discuss the overpayment with the employee and propose repayment over a reasonable period of time depending upon the size of overpayment and the period over which it occurred.

Note: This article gives a general overview only and cannot be relied upon in any particular case. It does not constitute legal advice. Specific legal advice must always be considered.

For further information contact Paul Archer or Helen Climance at Lemon & Co, Solicitors on 01793 527141 alternatively by email on paul.archer@lemon-co.co.uk or Helen.Climance@lemon-co.co.uk

[lovejoy]

You should use the National agreement. Ask your rep to schedule a meeting with manager and apply terms below i.e looking to use personal circumstances to get some /all of payment waived/


TO ALL BRANCHES WITH POSTAL MEMBERS


Dear Colleague


RE: OVERPAYMENTS RECOVERY PROCEDURE

As has been reported in previous letters to branches, the business changed its policy on recovery of overpayments in late 2002.

The policy change involved a much harder line being taken on recovery, with no facility to waive and recovery at a mininum 10% gross pay. Branches were asked to report problems arising from the change in policy to Head Office and a large number of cases have been received.

Legal advice was sought which did not prove helpful. It seems clear that the business is legally able to reclaim overpayments in full, by deduction from pay, without agreement, other than in very limited circumstances.

Discussions have taken place with the business over a long period, with a succession of managers. Jane Loftus and Kath Cronin initially dealt with this issue on behalf of the DGS Department and latterly Ray Ellis has picked it up.

The attached draft overpayments recovery procedure has been the subject of intensive and lengthy discussion and was endorsed by the PEC at its June meeting. The business is now anxious to roll out the policy, which represents a substantial improvement on the current position.

Commentary

The procedure commits Royal Mail “to dealing with overpayments in a reasonable and sensitive manner and with due regard to individual circumstances”.

It provides for notification to the individual by P&OS when the overpayment has been identified. This will provide full detail and options for recovery. It will also point out that advice can been obtained from the Union.

If this does not resolve the issue, the line manager will be informed and advised that they need to meet with and discuss the issue with the employee. Prior notice of interview must be given to the employee and they must be informed of their right to Union representation.

The procedure commits Royal Mail to seek recovery by agreement “wherever possible”. Recovery without agreement “will be a last resort and only applied after all reasonable efforts have been made to reach an agreement”.

Summary

It is a common misconception that the business cannot legally recover overpayments on wages without agreement – it can. The attached procedure commits the business to an approach designed to recognise individual circumstances, avoid creating hardship and seek an agreed basis for the payment. It allows some discretion to waive overpayments and crucially, builds in a role for the Union at the outset. It will enable our representatives to advise members and challenge any approach which does not accord with the terms and spirit of the procedure.

Yours sincerely



Dave Ward Ray Ellis
Deputy General Secretary (P) Assistant Secretary



OVERPAYMENTS RECOVERY PROCEDURE

1. Objective

The objective of this procedure is to provide advice and guidance for processing of overpayment of wages and expenses cases.

2. Introduction

2.1 The process and procedure set out below will be followed in all cases of overpayments, recognising the legal right and commercial obligation of the Business to recover overpayments and the need to ensure it has a consistent, efficient and legal policy on the recovery of overpayments of wages.

2.2 It is Royal Mail’s policy to pay wages on time and correctly, and every effort should be made to eliminate the overpayment of pay occurring. However, it is the duty of every employee to notify the Business immediately if they become aware of an overpayment in their pay.

2.3 Royal Mail commits to dealing with overpayments in a reasonable and sensitive manner and with due regard for individual circumstances.

3. Process and Procedure

3.1 Where an overpayment is discovered the total amount of the overpayment should be calculated and the reasons for the error established and recorded.

3.2 As soon as an overpayment has been established, People and Organisational Services will notify the employee concerned. This notification will clearly detail the amount of the overpayment, the circumstances that have led to it and the options available for recovering the monies that have been overpaid. The individual should also be informed that advice can be obtained from their Union.

3.3 Where the process in Para 3.2 (detailed above) does not resolve the issue then the employee’s Line Manager will be informed of the overpayment together with the reasons that have led to it occurring, the amounts involved, and advised that they now need to meet with and discuss this issue with the employee concerned.


3.4 The Manager will arrange an interview with the employee concerned. The employee should be given prior notice of the interview and informed that should they wish, the local Union Representative may accompany them to the interview. A record of this interview should be kept by the line manager and copied to the employee.

3.5 The purpose of the interview is to establish all additional relevant facts and any mitigating/personal issues that need to be taken into account. Normally, the outcome of this meeting will be an agreement to repay the overpayment in full, over an appropriate and agreed timeframe. However, in limited circumstances, this interview may lead to agreement that some or all of the overpayment is waived and in extreme cases that the whole overpayment is waived. The MCM/DOM will be responsible for making any final decision on waiving some or all of the overpayment, after seeking advice from their RSM (Advice and Support).

In making the decision referred to above, the following should be considered:-

• whether the Employee notified the Business of the overpayment and, if so, what actions were taken by Management
• whether the overpayment continued for a substantial period of time
• the value of the overpayment in question
• the employee’s personal circumstances.

3.6 Royal Mail’s policy is to seek recovery of overpayments of pay by agreement, wherever possible. However, Royal Mail reserves its statutory right to deduct from salaries any monies owed. The CWU notes it is Royal Mail’s policy to reclaim overpayments of wages in these situations by deducting 10% of the individual’s gross basic pay per pay period until the overpayment is fully recovered. This will be a last resort and only applied after all reasonable efforts have been made to reach an agreement with the employee concerned. Royal Mail commits to dealing with overpayments in a reasonable and sensitive manner and with due regard for individual circumstances throughout the period of the overpayment.


4. Key Principles

4.1 In all cases of overpayments an employee’s pay record/arrangements will be amended so as to rectify the overpayment at the earliest opportunity.

4.2 In cases of bulk overpayments, i.e., where there are two or more individuals, and they have been overpaid as a result of an error emanating from the same source, these may be treated as individual cases.

4.3 In the case of overpayments of less than £25 (pro rated for part time employees), People and Organisational Services will notify the employee that the amount will be automatically deducted in the next pay (whether that be weekly or monthly).

4.4 It is agreed that all underpayments of pay will be paid in full. Where there is an overpayment and an underpayment one will be offset against the other as appropriate.

4.5 Recovery of overpayments will not take place in cases where an employee has died. In instances where the business seeks to recover the monies from an employee who has died, this will be authorised by POS, in conjunction with the RSM (Advice and Support).

4.6 In instances where an employee has left the business, Royal Mail will seek to recover any overpayment. As soon as an overpayment has been established People and Organisational Services will notify the ex-employee concerned. This notification will clearly detail the amount of the overpayment, the circumstances that have led to it, and the options available for recovering the monies that have been overpaid. Debt recovery will be used in instances where reasonable efforts have been made and failed to reach an agreement on repayment of the overpayment.

4.7 Where an employee has given advance notification of leaving the business, the business will normally recover all outstanding monies owed from the employee’s final pay to repay the overpayment.

4.8 In instances where a casual employee is overpaid, People and Organisational Services will notify the employee concerned. This notification will clearly detail the amount the overpayment, the circumstances that have led to it, and the options available for recovering the monies that have been overpaid.

4.9 Overpayments identified as suspected fraud or contributory negligence will be dealt with under the terms of the appropriate national procedures.

4.10 Recovery of overpayments and the arrangements associated with the process will be applied in a timely way in order to ensure that the Business recovers the monies quickly and efficiently, and to minimise any anxiety caused to the employee.

[NumptyBumpty]

They are quite flexible with the arrangements as long as your manager agrees to it. Have a word with your manager and discuss what you think would be acceptable and take it from there.

[Tman]

Even if the overpayment was due to a mistake in fact the employer cannot recover the money if the following three conditions are met - if the employer has lead the employee to believe the money was theirs (one suspects that the provision of a wage slip including the amount would suffice);

Like we don't all receive wage slips?

if the mistake was primarily not the fault of the employee (so you can’t mislead the employer);

Employer's pay groups are only human and so can be expected to make mistakes from time to time, but that doesn't give employees any right to keep the over payments.
This principle has been tested in the courts enough times now.

and if the employee has subsequently spent the money or used the money to change their lifestyle in some way (e.g. bought a car on HP).

Utter utter bollix.
Who wrote this misleading crap? The bottom line is employers can and will always legally reclaim overpayments, and union's and legal advice is always to negotiate a repayment schedule, or better, report overpayments when they occur.
"Sorry I ain't got the money no more" really won't hack it as any sort of defence.
There is no moral or legal right to keep overpayments, and equally, employers are legally bound to honour underpayments too.
Barrack-room lawyers....

[BELIAL]

Just agree to make repayments at the same rate as the original overpayments.

[stokes11eg]

Just agree to make repayments at the same rate as the original overpayments.

Also, The people from the wages dept. who makes these mistakes,should be taken to task.

[saru]

http://www.dailymail.co.uk/news/article ... wages.html" onclick="window.open(this.href);return false;

Barclays worker paid double salary for years sues bank after mistake is uncovered and her wages are slashed
By Daily Mail Reporter
Last updated at 11:17 AM on 28th April 2009

Barclays paid Natasha Keenan, pictured with her husband Brent, double her salary by mistake for three years. She is suing the bank after the blunder was uncovered and her pay cut in half
A Barclays worker paid double her salary by mistake for three years is suing the bank after the blunder was uncovered and her pay cut in half.
Complaints advisor Natasha Keenan, 36, was given a contract stating that her annual salary was £17,000, but the contract omitted to state that her pay was on a pro-rata basis as she only worked 19 hours a week.
Mrs Keenan's pay should have been more like £9,000-a-year to take account of her part-time status, and bank bosses now insist the higher salary only applied to a full-time position.
But the mother-of-two was left incensed when the bank slashed her salary just days before Christmas - and ordered her to re-pay the 'extra' money she had earned - amounting to more than £20,000.
Speaking at an industrial tribunal in Ashford yesterday, where Mrs Keenan is suing bosses for unfairly docking her pay, she insisted she had no idea she was being overpaid.
She told a panel she believed the sum was reasonable for the work she did - considering her 16 years of experience in the finance industry and the fact full-time colleagues were earning more than £25,000 for doing the same job.
The customer complaints advisor now faces financial ruin after using her income to secure a mortgage on the three-bedroom home in Erith, Kent, she shares with her husband Brent, 31, and their two young children.
Her bosses at Barclays even provided a reference confirming her salary when she applied for the loan last year, and gave her regular pay rises - including a £3,000 performance-related bonus - without spotting the error.
Mrs Keenan told the tribunal: 'If I had realised they'd made a mistake with my salary which could be spotted at any time, I wouldn't have put my family's future at risk and used it to apply for a mortgage.
'I certainly wouldn't have asked Barclays for a reference.
'I have repeatedly allowed Barclays staff access to my account. I clearly stated my salary when I applied for a Barclaycard. My manager and team leader must have known what I was getting paid.

'If it was a mistake, how did it take three years for them to notice?
'The first I knew about it was when my pay was cut nine days before Christmas. My kids didn't get their Christmas presents until March.'
She added: 'I work in customer complaints, so I know about the tens of thousands in compensation Barclays pay out to customers each year because of administrative errors.
'But as soon as they spot an error that affects a loyal member of staff like me, their attitude changes and I'm thrown to the wolves.'

Mrs Keenan started as a full-time customer advisor for Woolwich in Dartford, Kent, 16 years ago, before going part-time after her son was born - earning £9,500 a year.
The business was taken over by Barclays three years ago, and staff were assured they would receive 'significant' pay rises, the tribunal heard.

When Mrs Keenan received her new contract stating she would be paid £17,000 a year, she assumed the firm had based the salary on her long service and high performance.
However, Barclays now claim the amount was the full-time equivalent, and she should have been paid on a pro-rata basis.
The error was eventually picked up in December last year by managers brought in to conduct a review of expenditure.
David Lascelles, for Barclays, told the tribunal: 'We say Mrs Keenan realised, or at least should have realised, a mistake had been made.
'There were mistakes in the way her case was handled, but when she saw her salary had almost doubled, we say she should have raised the matter with her manager.'
The tribunal heard Barclays produced an amendment to staff contracts, clarifying the 'previously vague' point that part-time staff would be paid on a pro-rata basis.
However, this amendment was not sent directly to those affected - merely posted on the firm's intranet site for staff to view.
Mrs Keenan was on compassionate leave at the time after her second son was stillborn, so never saw it.

She said: 'I would have thought staff affected by such an important amendment would at least have been sent a copy directly, if not asked to sign it.'
The tribunal heard Barclays have now withdrawn their demand that Mrs Keenan repay the 'extra' money - which amounts to more than £20,000.
However, they say her salary can be reduced because she realised, or should have realised, she was being overpaid - voiding her contract.
Mrs Keenan argues her £17,000 salary should stand.
The tribunal panel sitting at Ashford, Kent, reserved its verdict. It will rule on the case in the next 28 days.

[TrueBlueTerrier]

and if the employee has subsequently spent the money or used the money to change their lifestyle in some way (e.g. bought a car on HP).

Utter utter bollix.
Who wrote this misleading crap?

Employment Lawyers - thats why I provided a link so you could deduce the veracity of the information.

[barrychuckle]

not a bad idea but i wanted to buy a new guitar with my bonus,i suppose i will have to delve into my concience.

Sorry to say this but you must have known that you were being over payed. You've been found out now it's pay back time. Why didn't you buy your guitar with your ill gotten gains.