Overpaid by my former employer over 9 months - now they’ve made a claim against me!

[Manxman]

Sorry OP - like DES8 I'm not a lawyer but I think I'm sensible enough to see that you aren't looking at this realistically.

You say you acknowledge the debt is valid but that you aren't going to pay it. Sorry but that's bonkers.

Pretty much all the 12 points you make in your defence are irrelevant, so what are the facts:

1. You've been overpaid for nine months over a period spanning 12 months.

2. You do not deny you have been overpaid

3. You agreed a repayment plan, but only paid one instalment and then stopped paying after you resigned

4. After 6 months or so your employer is pursuing you for repayment.


I think the only possible defence is estoppel/change of position, but I think you would find that difficult to make out. To be successful you would have to prove that you received and spent the overpayment in good faith thinking that you were entitled to it, and that in spending the money your financial position had changed such that you no longer had the money and could not repay it.

I fear that you would be likely to fall at the first hurdle - good faith. Please understand I am not questioning your honesty but I think you might have difficulty persuading a court that you didn't realise for such a long period that you were being overpaid. As both I and DES8 have previously posted, £375 a month is quite a lot of extra salary not to notice each month. I don't know anyone who, upon starting a new job, did not check their first payslip to make sure they weren't being paid correctly. Do you understand why a court might find your claim difficult to accept - on the face of it.

Whether the fact that the overpayment was only uncovered as a result of you querying your tax deductions could go for or against you. On the one hand it might demonstrate your honesty. On the other hand it perhaps shows that you were in the habit of checking your payslips...

Also as DES8 has already mentioned, you were employed as an Assistant Quantity Surveyor?! Quite a numerate and quantitative profession. I think a court would expect you to be able to check your payslip reasonably accurately.

I think your employer has acted quite reasonably in (1) giving you an immediate breakdown of the overpayment (the details of which you do not dispute) and (2) agreeing what seems to me to be a reasonable repayment plan. Not all employers would be so helpful or accommodating as yours seems to have been.

I don't want to comment on your claims of bullying and intimidation etc except to say that a court might again find it difficult to believe that a professional firm employing professional staff like quantity surveyors would behave like that. If you don't have really concrete evidence of the bullying, intimidation and threats of violence, it might be best not to go there. Similarly I would not be inclined to raise the issue of discrimination unless I had substantive evidence

The fact that the overpayment spanned over 12 months is irrelevant as is the fact it's taken six months or more to initiate action against you. They have six years in which to take action from the overpayment.

You say you've already sought legal advice. What was their opinion? It's probably worth more than any opinion you are likely to get on the internet.

At the end of the day it's up to you whetehr or not you defend the claim - but at the moment you don't seem to have the makings of a great defence. You either have to defend it - and risk losing, or approach the claimant and agree some kind of repayment plan.

Or get paid for legal advice - that's the only type really worth getting.

[MIKE770]

Have not come across where an employee has not had to pay over payments back of course unless rules etc have changed or any appeals have taken place to the contrary?

[des8]

I can recall at least one (here on LB I think, but may be wrong) where an overpaid employee did not have to repay the overpayment.
In that case the employee raised the matter at least twice with the employer who confirmed each time the overpayment was correct.
It was an overpayment of extra hours/holiday pay, not just a straight forward salary error.
Nothing like OP's situation

[keebo47]

Thank you both for your input.

Manxman - although I understand your points, I don’t agree with them. NHS is public sector. My situation is in the private sector. I think the outcomes would be a bit different as a result. Also, firstly, let’s say if they do somehow argue the fact that I should have checked my salary etc surely the fact that it was me who raised the issue would counter-argue that claim completely? If I was so hell bent on “trying to get away with the overpayment” then egg on Earth would I raise expose it? Secondly, you say their second offer was “reasonable”, I completely disagree. In the employment act 1996 it clearly states the overpaid amount must be repaid on the basis of fair and reasonable, ACAS also supports this claim, making me pay back their money over the same period of time is not reasonable. Why should I now change my lifestyle to pay back their mistakes? “Change of position”....

I would also like to say that I am in the very early stages of the claim at the moment. So disputing the whole claim is not the end of the world. After speaking to the Court claim helpline, they did confirm that my decision at this stage will not be held against me till the end of the process. My stance on the claim can change should it need to... therefore, I feel I have nothing to lose if I go for the “jugular” first by choosing to dispute, alongside having what
i still feel is a strong argument to defend my dispute.

after disputing the claim, I intend to send the claimant a without prejudice email offering them a repayment plan based on a financial budget and statement created by citizens advice. If they accept, great. If not, I will be trying my best to fight this.

If you’d like to comment further, please do so as I am taking your advice on board.

thanks

[des8]

Private or public will not (should not) affect the outcome of a trial.

OK, so it was you who spotted the discrepancy and brought it to your employer's notice (this is not the impression gained from post 5 point 5) and is definitely in your favour.

Surprised court staff gave you any advice as they are not allowed to as it may be incorrect.
Did they also warn you that if you change your defence you will need the court's permission and it could have adverse costs for you?

Your intention to make a repayment offer is IMO wise.
As the claim has already been filed you might have to accept a TOMLIN order,(which is better than a CCJ!)

[Matty B]

Manxman I know of several people who do not check their payslips- to me that is crazy but they do not. The first month can be especially difficult if the tax code has not been sorted etc as what most people are concerned with are what goes into the bank.
Akibak1993 1993 When you were on furlough , was the furlough payment based on what you had been paid or what the correct payment - if it was on what you were actually being paid then your ex employer may have mislead HMRC


Personal injury claims (which don't have to be medical) are not limited to 3 months but 3 years I believe

[keebo47]

Matty B I think the furlough payments were based on my incorrect salary (so the £375 was included)

Manxman responding to your point about me raising the issue. Again, I don't think you are thinking about this situation on a fair scale...if I raised the issue with the tax, how does that show I may have been in a habit of checking my payslips? I raised the issue after 12 months of employment, one time. And as Matty B suggested, unfortunately for me, I am one of those people who just simply does not check their income amount and assumes they are getting paid the correct amount. With this said, if I was being paid let's say £2,000 from month one, for 12 months, and both I and the employer assumed this is my correct salary, then OFCOURSE I will raise an issue if I notice my tax has gone up or anything similar...I don't think the underlying question here is "did I check if my salary was correct or not?" the question here should be "did both parties assume that the "£2,000" was correct for all those months?", if yes, then surely I have a good case here...because as Des-8 suggested earlier, I have a defence of change of position. I have spent all of that money on household furniture, repaying non-priority debts etc. and I can probably even prove some of it too!

Regarding my role of Assistant Quantity Surveyor, I'd like to make it clear that Quantity Surveying has nothing to do with tax, salary income, or accounts. There is a reason why there are specific people who work in ACCOUNTS departments. I feel it is THEIR job to calculate the correct salary and pay employees. Now granted, I understand mistakes or human error can happen. But why should employees suffer due to this? I'm sorry but I disagree. I was not employed to check my salary, I was employed to check what the company pays to subcontractors for works carried out. Completely separate elements of work here. Of course, I am seen as a professional who deals with numbers, but you can't say just because I deal with numbers I MUST HAVE known what my salary amount should have been.

Manxman I sought legal advice from both citizens advice and an employment law advisor through work, both said that I should go down the route of disputing the claim through the courts and sending the claimant a without prejudice email to try to settle outside of court. I don't think it's bonkers at all that I am trying to admit I owe the claimant the money but at the same time believe i should not repay. I think that's quite privy to the circumstances I am in. To put it briefly, the below reasons are the MAIN reasons as to why I believe I shouldn't pay any money back:

1. The payroll error was the claimant's fault
2. The overpayment was over the course of 12 months where both parties assumed and believed that the overpaid amount was indeed correct
3. I have spent all of the money on normal daily things (and rightly so as I in good faith genuinely believed it was my money to spend)
4. The claimant's pursuance of the money was completely unethical and against statutory law (this was echoed by the employment law advisor btw)
5. Why should I now change my lifestyle and financial situation to pay back the claimant especially after it was their mistake and the way they treated me?
6. I am financially struggling due to the pandemic, I have no funds or capacity to pay back the money anyway
7. I did not realise the overpayment was being made

[keebo47]

Des-8 I have mentioned that it was me who brought the issue up. Please read my original post again stating: "I notice a tax issue in my August 2020 wage so I flag this up to accounts in the company to look in to it as I felt there was something wrong."

[keebo47]

Can anybody advise if I do end up with a CCJ against me from the courts, what are the repercussions? So let's say I accept the repayment plan included in the judgement against me...financially speaking what are the disadvantages for me?

I believe I have come across 2 disadvantages of receiving a judgement:

1. credit score will be crap for at least 6 years
2. i fill find it hard to get good interest rates on things such as refinancing my mortgage (yes I do have a mortgage)

any others?

[keebo47]

Manxman I know of several people who do not check their payslips- to me that is crazy but they do not. The first month can be especially difficult if the tax code has not been sorted etc as what most people are concerned with are what goes into the bank.
Akibak1993 1993 When you were on furlough , was the furlough payment based on what you had been paid or what the correct payment - if it was on what you were actually being paid then your ex employer may have mislead HMRC


Personal injury claims (which don't have to be medical) are not limited to 3 months but 3 years I believe

Another question on this; does anyone think I should mention in my without prejudice email that I will notify HMRC of the overpayment? If so, will this mean I will have to pay the extra outstanding payments for the relevant 3 furlough months in question or will the claimant?

[Manxman]

Thank you both for your input.

Manxman - although I understand your points, I don’t agree with them. NHS is public sector. My situation is in the private sector. I think the outcomes would be a bit different as a result. Also, firstly, let’s say if they do somehow argue the fact that I should have checked my salary etc surely the fact that it was me who raised the issue would counter-argue that claim completely? If I was so hell bent on “trying to get away with the overpayment” then egg on Earth would I raise expose it? Secondly, you say their second offer was “reasonable”, I completely disagree. In the employment act 1996 it clearly states the overpaid amount must be repaid on the basis of fair and reasonable, ACAS also supports this claim, making me pay back their money over the same period of time is not reasonable. Why should I now change my lifestyle to pay back their mistakes? “Change of position”....

Eh? Why on earth would anybody think that it made a difference to the legal position being employed in the private rather than public sector? What is your reasoning behind that assertion? I'm afraid it simply confirms my view that you have a completely unrealistic and naiive understanding of your position.

Your actions in querying your pay/tax with your employer are capable of more than one interpretation and may equally well go against you as for you. For example, you may have been aware of the overpayment from the outset and simply kept quiet about it until you decided that you had probably ridden your luck for as far as you could and decided to alert your employer to make you look good. Note I am not accusing you of doing so - I'm simply pointing out that your actions are not inconsistent with that and are capable of more than one explanation.

Of course it is fair and reasonable for your employer to expect repayment over the same or similar period that the original overpayment extended over.

But it's not me you will need to convince - it's a court...

[Manxman]

[USER="110989"]

Manxman responding to your point about me raising the issue. Again, I don't think you are thinking about this situation on a fair scale...if I raised the issue with the tax, how does that show I may have been in a habit of checking my payslips?...

How would you know to raise a tax deduction issue if you didn't check your payslips? And you wouldn't know from just looking at one payslip, would you?

(Incidentally it's not about me not thinking about this on a "fair scale". These are almost certainly going to be points that will be put to you that you will have to answer if you defend the claim. And your former employer may not ask them as nicely as me!)

[Manxman]

[USER="110989"]... To put it briefly, the below reasons are the MAIN reasons as to why I believe I shouldn't pay any money back:

1. The payroll error was the claimant's fault
2. The overpayment was over the course of 12 months where both parties assumed and believed that the overpaid amount was indeed correct
3. I have spent all of the money on normal daily things (and rightly so as I in good faith genuinely believed it was my money to spend)
4. The claimant's pursuance of the money was completely unethical and against statutory law (this was echoed by the employment law advisor btw)
5. Why should I now change my lifestyle and financial situation to pay back the claimant especially after it was their mistake and the way they treated me?
6. I am financially struggling due to the pandemic, I have no funds or capacity to pay back the money anyway
7. I did not realise the overpayment was being made

To respond point by point:

1. Nearly all payroll errors come down to some fault or other by the employer. That does not mean that the employer does not have a valid claim to be repaid.

2. So what? Both parties now know (and you have acknowledged) that you have been overpaid. Your employer has six years in which to take action to recover it.

3. The overpayment has nearly always been spent by the time the employer comes to recover it. The question comes down to whether you can establish good faith or not

4. They initially asked you to repay it at £1000 per month, I think? You refused and then they offered to accept a first instalment of £500 followed by monthly instalments of £300. For the reasons I've given in other posts I see nothing wrong with that. If you are referring to the "bullying and intimidation" you claim to have experienced, what evidence do you have of that?

5. They'll say because you acknowledged the debt and because you owe them it. Obviously anybody who owes a debt and is repaying it has to make decisions about what sort of lifestyle they can afford. It doesn't make you an exception and it doesn't cancel the debt

6. That's unfortunate. Many people owe money they can't afford.

7. Most people who end up repaying overpayments were not aware of the problem before it was discovered. It doesn't necessarily mean they don't owe the money


TBH all you can come up with is a basic defence of: I didn't realise I'd been overpaid and it was unreasonable to expect me to be aware of it; I spent the money in good faith and it has all gone; I can't repay it.

Perhaps someone like DES8 can provide or point you towards a template estoppel/change of position defence that you can use?

The problem is that putting forward such a defence ie easy enough - it's getting it accepted by a court that's difficult...


EDIT: I think your main problem is going to be that you agreed the debt and agreed to a repayment plan. Unless you have really concrete evidence of some form of coercion I don't think you'll succeed.

[des8]

As repeatedly mentioned on this thread the defence of change of position has a number of hurdles to overcome.
Firstly there is the admission in writing that the money is owed. Court permission will be required to resile from this.
Then there is the unawareness of the overpayment.
I believe it will be difficult to convince a court that someone who is numerate did not look at their payslip to check the monthly gross amount was 1/12th of the annual salary,

IMO the best way forward is to negotiate (under "without prejudice") with the employer for a more affordable repayment plan, backed if required by a TOMLIN order. You can point out to them that by agreeing they will avoid the non recoverable costs found in small claims track proceedings.

[Manxman]

I agree that the OP is going to have difficulty persuading a court that (1) they were unaware of the overpayment, and also (2) that it would be unreasonable to expect them to have been aware of it.

If I have understood the figures in the claim correctly the OP had an annual salary of £32500 which gives a monthly gross of £2708. An overpayment of £375 would give a monthly gross of £3083*, equivalent to an annual salary of £37000.

I think it might stretch a court's credulity to argue that somebody on a salary of £32500 pa wouldn't have noticed that their monthly gross was in excess of £3K* per month. In the case of a poorly educated and largely innumerate manual worker perhaps - but somebody working as an assistant QS?

It might well be of course that the OP simply did not notice or did not look at their payslip. But I think the clear counter-argument to that is that they should have noticed and that it is perfectly reasonable to expect them to have checked it.

Irrespective of questions about the correct tax code etc for a new starter, the error should have been obvious to the OP by simply looking at the monthly gross* salary amount. Anything over £3k MUST have been wrong.

The OP admits somewhere above something like: "unfortunately I am simply one of those people who does not regularly check their salary amount". Well if he admits that in any defence statement he's basically admitting to being reckless about what he was being paid which holes any good faith claim below the water.

I agree with DES8 and I think I'd suggest the OP work on agreeing a settlement and repayment plan with his former employer. (Can't comment on Tomlin order)


*If, and I emphasise if, the error was such that the payslip showed the correct gross monthly amount (£2708) but that the overpayment was because tax and other deductions were applied incorrectly, then the OP just might, and I stress might, have an argument. But they haven't said this was the case.