Potential overpayment of salary by former employer

[PittaNCheese]

Good afternoon everyone

I would appreciate some guidance on how to approach the issue of overpayment of salary by a former employer.

I left my previous role in October 2020, under good terms, to take up an offer of a new role elsewhere with better salary, etc. At the time of my departure, the organisation (a large and well resourced institution) were making many thousands of redundancies in response to the financial pressures of Coronavirus. As a result, my line manager agreed for my to leave quite quickly - 3 weeks notice - rather than my contractual 3 months of notice. Which I thought was very kind, although I never asked for it.

So it goes without saying hat the payroll and HR departments would have been under a lot of stress.

After leaving, I received what I thought was a final salary payment in November. It was circa two-thirds of a "normal" amount in a "normal" month. Accounting for accrued untaken annual leave etc, it looked about right. I didn't have a payslip to cross-reference it to, and assumed on would arrive imminently.

A few weeks passed. No payslip. No P45. I put it down to Coronavirus pressures and the Xmas holiday, and assumed it would all work out in early January. This is a big employer, not cowboys, and they keep their paperwork in order.

In January, I received a payment from my previous employer on their regular payday. Equivalent to a full month of salary. I checked my account history, and see that I received a full payment in December also.

I immediately contacted my former employer - my previous line manager, HR manager, and payroll dept (so three distinct calls) - to query why I was receiving money that I was not expecting. They told me they would look into it. They raised the possibility that I may have been given PILON, which I had not been expecting, but would be a bonus to me if it happened. In the meantime, I popped the unexpected amount into a suspense account to avoid the temptation to spend it in case it had to go back.

I received a letter from the payroll department in early February, confirming:

The date my employment ended (end of October 2020)
Reason for leaving
etc.

It included a generic statement about receiving any final payments in the February pay run, and that they would make contact if there were any overpayments.

February pay day rolled round, no more payments. In my mind, everything had been sorted, so I sat back and waited for my P45 and old payslips to arrive.

March came - no contact. No P45. No payslips.

April came - no contact. No P45. No payslips.

I began to wonder whether I was, indeed, entitled to the money that I thought had been overpaid.

May came. I check my online tax account because we're in a new tax year and I like to keep on top of these things. Owing to the unexpected windfall in Nov, Dec, Jan, HMRC say I owe them a few hundred pounds more in tax because my previous tax code was based on an estimate, and I wasn't expecting to be paid by 2 employers for a whole quarter. They have made an adjustment to my tax code. A bit annoying, but fair.

I also transferred my accrued pension from the scheme administered by my old employer, to the scheme administered by my current employer. Again, because I like to keep on top of these things. The transfer went through without a hitch.

Then BOOM! - HR contact me at the end of last week to discuss the "overpayment of salary". Apparently, they have sent me letters trying to start a conversation, but I haven't received anything. (I'm not the sort of person who ignores letters.) I speak with HR, who tell me it's possible they went to my work email address. From the job I left 6 months ago.... I start to reassess my previous assumption that this organisation is on top of administration.

They're going to email me pdfs of the letter apparently. But it's been 3 days and I've not received anything.

Anyway. This leaves me in a bit of a pickle.

1. How can I discuss an "overpayment of salary" - when I don't have payslips to refer to? Or a P45 confirming what they paid me in that employment? Or a P60 for that matter?
2. What on earth do I do about the pension fund that I have now transferred? I can't get that money "out" of a new scheme - so if they want me to repay 2 months of employee + employer pension contributions then I will encounter a cashflow problem.
3. What about my underpayment of tax? How long should I personally be expected to take the cashflow impact of their mistake?

So now I'm wondering

1. Can I successfully argue that, in the absence of written evidence of the contrary, it was reasonable for me to assume that that payments received in December and January were indeed PILON?
2. Pension contributions - I have no idea where I stand on this front.

As a final note, it's worth mentioning that at no point have I used the phrase "overpayment" and have always said "payments I was not expecting".

Oh, and I'm leaving the country in 6 weeks for a 3-year work contract. So I could always do a runner....

[ULA]

Section 14 of the Employment Rights Act gives employers the right to reclaim back overpaid wages made by the employer for whatever reason which is the context for them asking you to repay what has been overpaid.

The first thing you need to do is chase up your ex-employer for copies of the correspondence they said they have sent you, plus the relevant payslips and P45. You need to check that you agree with the calculations that have been presented by your ex-employer.

How did you contact the various people you spoke to in Dec, was it via email and if so do you you still have the copies?
If it was by phone do you have dates, times and names of the people that you spoke to? The evidence that you have raised this would be really useful.

Potentially you may have an argument to say that given you did all you could to query the "unexpected payment" in Dec and following the correspondence in Feb which did not result in any further correspondence, that you were aware of about any overpayment, this led you to believe that the payments you had received were all in order.

Is the money still in the suspense account you mentioned?

[PittaNCheese]

Hi Ula

Thanks for your reply.

I've heard from my former employer now who have provided their overpayment calculations and a demand for immediate repayment of the full sum paid from November-February (net).

No P45s or payslips yet, but a breakdown from their payroll system showing the relevant figures. Their calculations and my calculations differ, so I've taken what I think is a pragmatic approach of:

1. Repaying them the amount I consider was paid in error - the full salary for the months of December & January - which is the amount I had in the suspense account.

2. Asking them to recalculate the sum paid in November vis. holiday pay and PILON, explaining that I genuinely considered the amount I received in that month to be the amount I was entitled to, which I have now spent on bills etc etc, in good faith. My spouse had been made redundant (with no redundancy pay) from the same organisation just prior - so the "change of position" argument is a valid one and reasonable in the circumstances. No payslip = nothing to cross-reference (plus a serious omission on their part, I think).

We'll see what they come back with. But we'll now be arguing over circa. £2k rather than circa. £7k.

Incidentally, what appears to have happened is that my former line manager did not submit the paperwork required when I left. So until I raised the issue in January, I was still registered as an employee with all the associated email accounts, privileges, access to sites (!) and secure databases (!) , etc. Oops!

All payslips/P45s etc were uploaded onto an online portal to which I had no access.

Had I not brought it to their attention, who knows how long I would have remained "on the books" for. My former line manager is one of the most senior Directors and very high-profile in both the organisation and the public sphere, so am hoping that any remaining disputed sum will be written off to save embarrassment.

[ULA]

As you say you have taken a very pragmatic approach.

The "change of position" is a relevant an potentially valid givent the situation.

Hopefully it will all work out but if you need any further support on this issue then please just come back to this thread.