Protected pay salary error

[Ryegella]

The HR department has informed me that they have discovered an error in how their organisation's has recorded staff with pay protections in their payroll system. Pay protection are due to organisational change and having to be redeployed to a lower paid job but protected for a number of years. This effects everyone (several employees) who are under a pay protection, in that their pay should have been frozen until the protection runs out. But due to an error in the set up everyone who is pay protected has been receiving the annual pay awards.

Not having ever been in this position before and no explanation by HR at the time I did not realise their mistake.

This payroll error has been in place for 4 years. They are reviewing this and expect to come to recommendations at the end of May.

This is going to be a significant amount for me, which I recognise I have to pay back but due to amount would need to be negotiated. My other concern is I have also then in turn been overpaying NI, tax and pension. How does this get resolved?

Any views welcomed. Thank you.

[ostell]

Re: Protected pay salary error

You've spent it as you had no reason to believe it was other than correct and therefore there is no money to repay. There is a legal term for this. Hopefully someone will come up with it.

[charitynjw]

Re: Protected pay salary error

You've spent it as you had no reason to believe it was other than correct and therefore there is no money to repay. There is a legal term for this. Hopefully someone will come up with it.

Change of position.
Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548
LLoyds Bank Ltd and The Honourable Cecily Kate Brooks (1950)

[mariefab]

Re: Protected pay salary error

Although you didn't get an explanation at the time; did you receive any documentation, when the pay protection was initiated, stating that pay awards wouldn't be payable during the currency of the protected period?
If not, does the Company have an accessible, pre-existing written policy stating that that pay awards will not be made to any employees during a pay protection period?

Because if it was just the underlying intention of the employer, but not communicated to the employees, I don't see how they can re-claim the alleged overpayments.
It certainly isn't automatic that pay rises aren't made while on pay protection. For example, where I work if someone goes on pay protection because of a move initiated by the Company they still get the normal pay rises and it's only when a change is requested by the employee for a non disability or childcare reason that they don't get pay rises while on pay protection.

Estoppel is another relevant term. If you received pay awards before the pay protection and your employer failed to inform you that there would be none made while it was in force you had no reason to question the continuation of the pay awards and spent the money in good faith. It would be unconscionable for them to expect you to reimburse them for their own error.

[Ryegella]

Re: Protected pay salary error

Although you didn't get an explanation at the time; did you receive any documentation, when the pay protection was initiated, stating that pay awards wouldn't be payable during the currency of the protected period?
If not, does the Company have an accessible, pre-existing written policy stating that that pay awards will not be made to any employees during a pay protection period?

Because if it was just the underlying intention of the employer, but not communicated to the employees, I don't see how they can re-claim the alleged overpayments.
It certainly isn't automatic that pay rises aren't made while on pay protection. For example, where I work if someone goes on pay protection because of a move initiated by the Company they still get the normal pay rises and it's only when a change is requested by the employee for a non disability or childcare reason that they don't get pay rises while on pay protection.

Estoppel is another relevant term. If you received pay awards before the pay protection and your employer failed to inform you that there would be none made while it was in force you had no reason to question the continuation of the pay awards and spent the money in good faith. It would be unconscionable for them to expect you to reimburse them for their own error.

Thank you for your response. I never got an explanation at the time, but when I asked for confirmation of protection period ie no. of years they answered that question, but never mentioned no pay increases. They did at that point send me a copy of the current organisation pay protection policy that would apply as I was being TUPED into newly formed national NHS organisation. My oversight that I did not realise the content of this policy or what this meant and it refers to other sections in agenda for change national policy. Not the most helpful of jargon used either. Not an excuse, but at the time I had just gone from being told being made redundant, which I found quite upsetting and worrying to redeployment to "suitable" alternative employment. I had never been in this positon before and HR presence was non existent and managers less than helpful.

Its not good that everyone who has TUPED in on pay protection they have made the same payroll set up error that has lasted for 4 years. Hindsight is a great thing, but I genuinely did not realise there was an error.

[mariefab]

Re: Protected pay salary error

They did at that point send me a copy of the current organisation pay protection policy

Do you still have this?
If so, does that policy state that you won't be entitled to pay awards during the pay protection period?
Because unless it does, and particularly if the 'suitable alternative employment could be considered a downgrade, Agenda for Change won't help them.

Also, when you say 'current' do you mean the policy of your present employer, or the policy that applied at the time with your former employer before you TUPE'd.

[Ryegella]

Re: Protected pay salary error

I have a copy of the original policy from the company that I was transferring in from as part of my TUPE rights. I only received a copy when I asked HR for written confirmation of the length of protection, as the role they offered me was a lower post. I asked for a copy to be but on my HR file and to be submitted to the new organisation so it was clear what my rights were. I did email HR at the time and asked for a letter outlining the protection and the only confirmation and explanation I received was the number of years.

The old organisation policy states that basic pay is protectable on a mark time basis for period specified according to length of service. Protected earnings is based upon weekly or monthly average over the 12 months immediately preceding the first day of employment in new post.

The organisation I transferred into produced a policy 2 years ago that clearly states what mark time is and is explicit about no pay awards or increments.