Overpayment - they want me to sign a contract to deduct

[SomeKindofWonderful]

ok, its a bit long, will try to keep it short.

I was on ML 5years ago. on my return, i changed my hours (not significantly) under the flexible working agreement, through application, interview with manager, forms etc. Anyway, manager a bit lax, approved it by email to me and we agreed the date my hours changed. In between all this there were cockups in my pay due to sickness absences and non-payment of wages which were repayed to me in installments, also pay increases while I was on ML, which were then backdated (for everone), which meant lots of adjustments to my salary. After about 6 months it all settled/sorted, and i presumed my salary was correct. (wrong!). Had no reason to suspect otherwise, did not really think anything about it, had mind elsewhere blah blah.

Roll on 2 years from return to work. for this timeline, this is now just under 2 years ago from now.. We were due another pay award, and would involve more backdating of pay. I was curious to what my new wage would be as the pay award was good but not due to happen for a couple of months. I calculated my new salary, based on my hours working and the total amount per month was different to what I earnt, it was lower. I checked it a few times, got worried so emailed payroll to ask what my salary was. Salary was emailed back and I advised them I was being overpaid.

There was no record of my hours ever changing. Nothing on HR. I went to my (now old line manager) and asked her for the evidence of hours changing, she did not have a copy (i was never given one) but I had old emails so sent this all to HR. Fine.

I was then informed that I had been overpaid by £4000 in total, gross over a period of just under 2 years. I was told it would all need to be repayed asap.

So my salary then went down, as it should have. I spoke to union, spoke to a crap union rep who had taken my case and he said i had to pay it back within 6 months!!! I said that was impossible, and under direction (unofficially) of another union member, higher up, sought further guidance, regarding non-repayment under mistake in fact, which I could prove all 3 points relating to this (not my error but employer error, money accepted, and used, in good faith on understanding this was correct salary, and that the employee no longer had the money as it was used as if a salary/can prove hardship if repayed- or something like that).

After pointing it out, there was a big ho har as my new line manager waded in demanding I repay at least £100 per month (impossible) and making it stressful, I fell pregnant, my husband lost his job, and it all became messy.

I have sped it all up a bit, so if I miss anything out you need clarifying, just ask.

I have now returned to work, and told my employers that I do not feel i should pay it back under the Mistake In Fact legal standpoint, however to repair employer/employee relations, I would be prepared to drop any further legal standing I might take on this and negotiate a repayment amount.

It has been agreed, although reluctantly from me that I repay £3000 of the £4000 at £30 a month.

Now my concern is this. They have told me that a) i will need to have this reviewed (fine) and if my husband is working again I would need to increase payments (fine in theory, will discuss at review) and that I need to provide evidence of my husbands employment situation at that time. and b) they want me to sign a contract to state that they will recover all outstanding overpayment from my final salary.

lets look at a) can they ask for this personal information? or rather, as they can ask what they want, are they legally entitled to this information?

and b). this is more tricky. Can they make me sign a contract saying they will take the money from final salary. I am concerned about this point in particular, as there are redundancies on the horizon and I worry this will be a good way to get rid of me and maybe they are already planning this. I raised this as a concern in the meeting and was assured the wording was not to imply there is a 'final salary' or intention to get rid of me, but merely a 'should you ever leave' type caveat. I do not beleive them.

I have asked for reassurances in writing that I will not be made redundant in order to recoup this money, or for any other reason that could be seen to be related to this before I sign anything, but can they force me to sign something?

Bloody hell, too long. sorry. If you make it this far

when I say I have returned to work, i mean, after my second period of ML absence.

anyone got the stamina to read it through?!!!

come on it and take a glass, put your feet up and read at your leisure!

Wow! I really don't know but can I have a glass of wine?

I'm not sure about (a) - but I suppose if you are saying that you can't afford to pay back any more than £30 a week because of your home financial situation then its reasonable for them to say that if this situation changes you should be paying it back quicker? I think they are entitled to say that they'd take it back from any final salary - otherwise you could just leave and then they'd never get it back. They can't make you redundant to get the money back.

I don't really understand your point re "mistake in fact" - if you were overpaid then you need to pay it back. If you were underpaid I'm sure you'd expect them to pay you what you were owed?

Flowery or ribena would probably know more than me!

Blimey......would love to hear flowery or ribena take on think.

No real advice really except I would be very dubious about coming to an arrangement at te mo.

la I do know that officially they cannot make me redundant for any reasons other than through the normal and correct processes and selection criteria. We know that is how it should be, but who knows how it really is? the HR people work towards a business model, which is company focussed not employee focussed, and given the recent announcements of cuts to budget equalling 25% in the next 5 yrs, being able to recoup £3000 or close to within one entire division in one go would make them look pretty good, compared to the £30 per month which will not cover one days sickness per division, for example.

This hint at final salary is the second hint, the other one was ever ever so subtle, just a mere hint. The second mention, more open, seems a bit more to me. This HR woman is the same HR woman who 4 days before my due date with first child, told me that I would not be offered a sutable date to be interviewed for a job I had applied for, because, even if I was interviewed I would not be offered it, given that i will be on ML. She then denied this conversation and I was offered an interview, knowing that if I took the interview I would not be sure of being treated equally and fairly. Unions were already involved with some other matters relating to my pg. So I do not beleive for one moment that what the law says and what can actually happen are always the same.

Wrt the 'Mistake in Fact' - regardless of whether you feel morally i should repay this money, legally I have a case where I may not be required to pay any or some of it back. In fact, in some organisatons, unis, councils and the such, if there has been an overpayment to an employee as a result of an employer mistake, and hardship will be caused by asking for the repayment, they reduce it as a matter of course or only request a repayment for 12 months at a nominal rate. I feel that a compromise payment is entirely reasonable, given the fact they messed up in the first place and have taken 2 years since being notified to get around to getting the money back from me, despite many attempts from me to resolve the mess. I mean really, if I had never told them in the first place, I would still be being overpaid, and then how much mess would it be now when I am reducing my hours even further, and find out I was overpaid then, so need to repay AND have the double reduction in income? The Law is there to deal with these kinds of situations.

I don't think you can avoid paying this back, OP, but I have read somewhere that you should be asked to repay it over the same period you were overpaid, so asking you to repay 2 years worth of overpayments in 6 months would be clearly unreasonable.

You will have to pay it back, though, as the money was not yours and to refuse to pay it all back would amount to theft.

dancingHippo, have you read the OP? which states clearly that a repayment plan has already been negotiated and agreed. This is less than what was overpaid, and is over a period of 8.5 years, not the same as the overpayment period. Not sure what you read, but it is wrong. It is up to the employer and the employee to negotiate terms and final amount. However the law clearly states that if hardship ensues through recovering the overpayment, then the repayment time/amount has to be minimal. If I took this to court, or forced my employers to take me to court to recoup it they would at the very least show in my favour for the length of time to repay. I could easily argue £10 a month.

It is absolutely not theft. what an absurd thing to say. If it were theft, that would be intention to steal, to take something knowing it did not belong to me. I was given something and received it in good faith that it was mine to receive and even in criminal law that is NOT theft! (i know, as criminal law is in part my profession).

'Mistake in Fact - if the overpayment was due to a mistake in fact the employer cannot recover the money if the following three conditions are met - if the employer has lead the employee to believe the money was theirs (one suspects that the provision of a wage slip including the amount would suffice); if the mistake was primarily not the fault of the employee (so you can?t mislead the employer); and if the employee has subsequently spent the money or used the money to change their lifestyle in some way (e.g. bought a car on HP)'.

Just for those who are going to come on here now like hipp citing Theft. (just for those people, this is not posted in AIBU, i am not asking for your opinions on the repayment, just on the two points I asked about)

"The employer is entitled to recover the overpayment, subject to estoppel - the principle that if two parties proceed on the basis of an assumption, where that assumption proves to be incorrect, neither party can go back on it without there being potential damages. Where an employer overpays an employee by mistake the courts will normally bar recovery if the employer led the employee to believe that she is entitled to treat the money as her own, not reasonably expect her to notice overpayment, that the employee has spent the money in good faith and the overpayment was not caused primarily by the fault of the employee".

probably a clearer account of Mistake in Fact

It would not amount to theft, OP. That's nonsense. It might be unjust enrichment.

The legal point here is that, while in general you are protected by legislation against unauthorised deductions from your wages, that protection does not apply to overpayments. So the law provides that an employer can deduct some sums w/o your permission (tax, for example) and any sum with your agreement, but he does not have to secure your agreement to recover overpayments as they are specifically excluded from the protection provided by the act.

On top of this is the extra complication that recovery must be fair and reasonable, and you've been advised about this, mistake in fact, three points, etc. If you wished to dig in and argue nil repayment you could and the matter would have to be decided in court eventually.

It sound to me like your employer knows the above and is trying to be heavy handed in case you leave suddenly and get beyond their clutches.

In the end it's up to you what you sign or are otherwise prepared to do to maintain relationships. They can't require you to sign it nor can they force you to provide info about your husband. Sounds to me a if you are already being eminently reasonable by offering to repay voluntarily.

I think you should be taking further, formal advice. Can your union advise further or negotiate? If you decided not to sign and things got difficult you could raise a grievance.

SKOW - personally i wouldn't sign this especially as it stands. If you are happy to sign something and to repay some money then it must contain all the facts ie clearing you and accepting on their behalf that this is a case of mistake in fact. They can request whatever they like it doesn't mean that you have to show it, this is an arrange between the company and you to fix a problem the company created. tbh signed to agree to repayment is not that unusual where i used to work, that is that it was common place to sign to agree that any overpayments made could be duducted. They are just trying to cover themselves re you leaving to get out of paying back the money.

At the end of the day I would treat anything you agreed to and sign your name to as perhaps one day needing ot be presetned in court, perhaps a trip to get some legal advice would be a good idea.

It seems to me that setting aside the issue of employment law and treating this as a commercial negotiation is the way to deal with this.

There need to be two clauses inserted in your contract.

CLAUSE 1. You agree to pay back £30 gross per month and if you resign you have to pay back the remainder out of your final salary cheques.

CLAUSE 2. The employer agrees that if for any reason (including disciplinary) they terminate your employment the amount outstanding is written off.

That way you are protected in a redundancy situation but the employer gets the protection they need to make sure you dont just walk out without paying the full amount back.

However, I dont see why you have to sign a contract to agree this. Just a simple letter attached to your contract would do it.

The thing that bothers me is that you are being asked to sign a new contract. With a redundancy situation in the air will the fact that you have a 'new contract' mean that you could be selected under a last in - first out criteria? Would it damage your other employment rights if you have a new contract rather than an old contract?

I dont know the law but I do know that people who have been employed for less than a year have far fewer rights. It seems to me you need to retain your old contract and just have a temporary amendment attached to it rather than a whole new contract.

Forgot to suggest ... check your existing contract as there may be a clause re overpayments.

New employees do have fewer rights, for example in relation to unfair dismissal, but not in this area, as far as I know.

beenbeta i like those clauses actually. They seem fair as I am not intending to leave, not any time in the near future. Apart from this issue and some past issues which I wish to put all to bed so to speak, I have a good job.

It is interesting that I don't have to sign anything. I might start down that route tbh.

I do have a union rep, for this and other matters, but he is as useless as a chocolate teapot, he seems to be working from their side, from what they are wanting, not me, or the law or what is fair. I have included the more senior union rep in this most recent correspondence, he is of the opinion they should not get anything back and it was him who directed me to the Mistake in Fact points. However, he cannot represent me as 1) he does not do that any more, fully fledged union employee with much bigger fish to fry nowawdays! and 2) the other rep is already my rep so he can't go over him. But he has directed me unofficially, so will probably do so again.

I personally do feel I should not pay this at all, I have made this clear to them and also made it clear that my negotiations come from a standpoint of wanting to build better relationships with them for the future. If I had any intention of leaving them, I would not be agreeing to anything!!!

missed i have worked for this employer for over 8 years and there is no clause in my contract re repayment, nor any policy on overpayment, which there is in some organisations I believe. Which means they make their own rules up as they go along.

I am going to go and draft something up, and send it them as a formal letter, rather than an email, I think saying I have had time to consider this and feel on reflection that I am unwilling to sign anything committing to repaying the full amount from my final salary. I will run it past the union guy who is not a chocolate teapot.

Oh and beenbeta - they are not asking me to sign a new employment contract, but rather a 'repayment' contract. Sorry if that was not clear.

And thanks for the advice every one who has given it, very helpful.

It would certainly look good on your part if you wrote a letter over the weekend and put it on their desk on Tuesday (ie after the holiday). Documenting what has happened and proposing a resolution along the lines of the two clauses I suggest above AND saying that you do not want a whole new contract.

If it ever came to it, then you could show that you acted reasonably. At the moment they could make out you were trying to get away without payng the money back - which of course you are not.

Hope it works out.

beenbeta luckily, there are already emails from me demonstrating attempt to negotiate a repayment, in the last week, and a long one telling them how I was prepared to repay some.

I will draft the letter as you said, not sure about the clauses yet. I might just say, No I am not signing. I shall ponder this over the weekend.

(i say in the last week, in reality, there are emails and letters over the last almost 2 years trying to resolve this)