They want their money back - but should they get it? (UK)

December 3, 2008 4:31 AM

My British employer overpaid me back in June 2008 to the tune of £1k. I pointed this out at the time, but never heard from anyone. Now it's December, and they want the money back. However, I've heard that I can contest this, on the grounds that the employer made a mistake, and that it's illegal to force employees to rectify companies' mistakes. Is this true? And what legalese can I quote? :)
posted by almostwitty to work & money (13 comments total)

According to this page, it looks like they can just take the money from your next paycheque -- the advice on that page to contact the CAB is probably the best thing to do.

I've been overpaid on the past and arranged with the employer that they would take the money back over a few months, rather than all at once. That might be a good compromise to keep you from being £1k in the hole at Christmastime.
posted by ukdanae at 4:43 AM on December 3, 2008

Previously.

As far as I know, if you do not pay it back, its considered theft, though I'm sure someone will chime in if I'm wrong. Here is an article from the BBC that is relevant, which in linked in the other thread. Unfortunately, I don't believe you have have much of a case here, but hopefully your employer will be flexible in how you pay it back.
posted by triggerfinger at 4:49 AM on December 3, 2008

I believe there is case law around which would allow you not to have to pay back money paid to you in error if you could prove that you legitimately believed it to be yours & would now be placed in a difficult position if you had to pay it back, having relied on that belief in order to enter into some other transaction or contract.

Eg, If your grandfather had told you that you were to receive a part of the estate of his father & you found £30k appearing in your current account which you then put down as the deposit on a house, you might have some sort of case if it traspired that the 30k was some kind of bank error — to have to pay back the 30k would place you in a much worse financial situation than when you started if you'd have to sell the house in order to repay the money.

However, none of these things apply to you, since you had no belief that the payment was legitimately yours & indeed informed the company of the fact! For you to keep the overpayment would be dishonest: it belongs to the company and they're completely within their rights to demand it back: As ukdanae suggests, the best you can reasonably hope for is a payment schedule so that you don't have to pay it all back at once.
posted by pharm at 4:57 AM on December 3, 2008

An acquaintance of mine got a county court judgment against him, after he left his previous employer and they believed him to owe them money. So he now has to pay them the money + fees, and has a mark against his credit rating.
posted by tanc at 5:00 AM on December 3, 2008

Don't be a douchebag, pay it back ASAP. You've admitted they overpaid you, there's simply no reason to fuck them on a technicality.
posted by Inspector.Gadget at 5:20 AM on December 3, 2008 [4 favorites has favorites]

Everyone will tell you to give it back and everybody will be right.

1k is just not enough to screw people over. I believe the cutoff is when they make it something like 7 or 8 million pounds. That would be enough to retire on, and I would definitely cheer you on then. As is, just play nice. And keep hoping for that 8 mio mistake...
posted by NekulturnY at 5:33 AM on December 3, 2008

My limited understanding of UK law is that you cannot get out of paying it back.

I would advise talking to HR/Finance and agreeing staggered payments on the basis that a grand out of your salary is going to be financially painful for you. Especially with all those bills, mortgage, food and (at this time of year) presents to buy.

Personally I'd suggest removing £250 per month for the next 4 months starting with January's pay. It's not going to be nice for you, but it's a decent midway point.
posted by mr_silver at 5:45 AM on December 3, 2008

I'm paraphrasing here (not always a good thing in matters of law), but the essence of it is:

The conditions under which an overpayment is not recoverable are:
1) The overpayment is the fault of the company, not the employee.
2) The employee did not know that they were overpaid at the time.
3) The employee must have acted to their disadvantage (i.e. spent the money).

It's condition 2 that excludes you from keeping the money in this instance.

The Employment Rights Act 1996 basically says the employer can deduct the overpayment from your salary, provided they do it over a reasonable period of time.
posted by le morte de bea arthur at 5:51 AM on December 3, 2008

To be clear - this is the *second* time this has happened, and I basically want to give UK Monolithic Corp. a reason to stop it happening. Again. and. again. It's really annoying - especially when I told them six months ago. But thanks for the answers :)
posted by almostwitty at 7:35 AM on December 3, 2008

Next time they do this, make sure you put the money in an interest bearing account, so you at least get something out of the experience.
posted by nomisxid at 9:27 AM on December 3, 2008 [1 favorite has favorites]

No, next time they do this, write a cheque for £1000 and hand it to the finance department immediately.

Clearly you don't need this crap and aren't that good at dealing with it. (Neither am I, no sleight inferred.)
posted by genghis at 4:54 PM on December 3, 2008

Happened to me with expenses overpayment once. Told them it would result in hardship and arranged to payback over 3 months.
I could have paid it back immediately, but wanted them to feel the pain of going through hoops. They never did it again.
Do pay it back though, the money isn't yours and you're already up on the deal thanks to the interest on the money.
posted by arcticseal at 5:48 PM on December 3, 2008

No, next time they do this, write a cheque for £1000 and hand it to the finance department immediately.

While I agree with the spirit of arcticseal's post, I don't agree with this recommendation. I'd go with the savings account idea. Why? If the company bookkeeper had set up a special account for "Erroneous payments to MeFite," then your check could be applied to that account and nicely zero it out.

But there is no such account. The payment you received came from a salary account, which by an error happened to have too much in it. If you hand the bookkeeper a check for 1000, what account will it go into? "Charitable contributions received from MeFite for no reason"? When they finally notice their error, you're in for a round of confusion when you try to tell them that the check you gave them months ago was the premature payment of a debt that they hadn't yet told you about.
posted by JimN2TAW at 4:24 PM on December 4, 2008