Company clawback

[juliesharp]

Hi guys!!!!
my husbands company made an error last January with his salary. As mist of it is commission based he did not notice an overpayment. This has continued until this week when they have now asked for 1500 to be repaid with the next 4 months!!! Where does he stand with this as it was not his fault ?


Jules xx

[teaboy2]

Re: Company clawback

Hi Julie

Unfortunately, regardless as to who was at fault, the money must still be repaid as your husband was never entitled to it. I appriecate it was probably an unnoticeable amount making the error hard to spot, which is also why they probably have only just spotted it themselves. They most however take your financial circumstances in to consideration and can not force you to pay more than you can afford, as by doing so they would be forcing you in to financial hardship which would be unreasonable action on their part and a breach of their duty of care to your husband, which amounts to breach of contract.

The best course of action would be to write them a letter, setting out clearly how much you can afford to repay each month and the number of months it will take to repay the full amount, whilst making it catagorically clear to them that it was their error and it was unnoticed by your husband due to the small amounts. Also point out to them that by setting unreasonable repayment demands that are more than you can afford to repay, would force you in to financial hardship which is not only deterimental to your husband and his family (for which they would be legally liable for) but the affects of which, such as depression and stress caused by such unreasonable demands for repayment, would amount to being a breach of their duty of care which is also a breach of employment contract. Make it clear that you have every intention to pay the money back, but only at a rate in which you can afford which given they were the ones responsible for the error is perfectly reasonable to be expected to pay only what you can afford each month, so that no financial deteriment is caused or suffered by your husband and his family due to their own negligence.

Let us know what their response to your letter is. If they want to play fair, then great - If they want to play hardball then their in for a hell of a rough and costly ride with me on your side!

The most important thing you and your husband can do while this issue is on going, is to keep your heads up, not let what the company says bother you and don't worry about it at all, as the law is on your side if they want to play hardball.

[juliesharp]

Re: Company clawback

Thank you!!!
i will get him to write ASAP. Are they liable to repay the tax that he has paid on the amount ?
Than you is much
jules x

[teaboy2]

Re: Company clawback

Yes the extra tax paid would be their liability too. Though i would expect the tax would be refunded by the HMRC as a tax overpayment. My advise would be to contact HMRC and ask their advice on the matter if your unsure.

[bluebottle]

Re: Company clawback

I would contact HMRC in any case. As Teaboy says, you cannot be made to repay more than you can afford. It was your employer's fault, not your's. It might not be a bad idea to contact ACAS, as well as HMRC, for advice. Their website is at Home - Acas .