if someone takes all their holiday pay early in the year then leaves their job, do they need to pay it back?

[ssd]

the person has been there 4 years, no contract or written statement or handbook.

they left work over a disagreement and didnt give any notice

now work is demanding the holiday overpayment back, to be paid in 7 days, the holidays were authorised by manager and paid thru payroll as normal

also last working weeks pay was not paid to the person in lieu of holiday overpayment

is this legal when there is no contract or anything like that in place?

See my response above

They can't deduct it without agreement but it is classed as an overpayment of salary. The employer can take someone to court but the courts would not look kindly on them if they hadn't tried to make a compromise for example paying it back in instalments.

Yes, it has to be paid back

The thing is, how are they (the employee) going to challenge this? The only real recourse they have without huge legal fees is the small claims court for the already deducted pay. The person in question walked out without giving any notice and owing money to the business, so I wouldn't have thought their chances are great. OTOH the business has possibly acted illegally in the way they have reclaimed part of the debt, and for this reason might not go to the bother of going to court over the remainder, but it is possible they acted entirely within the law, the employeemat have signed something years ago without realising the significance. I'd say things are weighted in the employer's favour here. I'm not HR BTW.

There will be something in writing somewhere

Most companies have a handbook or policies somewhere

there is no handbook or policy, I work there

Yes, it's as Ballet says. The employer would need to go to court which most wouldn't depending on the amount. Have they spoken with ex-employee? They should offer a payment plan to them.

The employer can't withhold final pay, this has to be paid in a 'timely' manner.

I would have said:

a) the company is allowed to deduct pay pro rata for holiday taken but not yet accrued (ie if someone takes all their 20 days in April and leaves in October the company can pay 10 days less in final paycheck)
b) if this didn't happen, the employee left having taken all leave and been paid as normal, there would be sod all chance of getting a subsequent repayment. If I were the employee I wouldn't pay it, and if I were the employer I wouldn't hold my breath. With or without a contract, but especially without.

Interested to know what the actual legal position is though.

Sorry I rtft too quickly there, thought you wanted to know what purple would have thought without checking the law, now see you wanted people who actually know (which I don't!)

OP
no I don't work in law or HR but I have had good reasons to look carefully at employment law

if you left suddenly, they didn't get a chance to put it in writing and check you were clear before you left

in terms of it not happening in 10 years, I presume you mean to others - can you be sure of that? Also the problem with no contract is if they didn't bother to do this with other people I am not sure how it helps you unless you can track them all down and base a case on precedent.

if you think of it this way, then you will probably see why it's so clear - let's imagine my holiday runs January till January. I am in my 3rd year of the job.

January comes, I take 3 weeks holiday out of 5 weeks, then I resign immediately. If I am paid, then I have been paid for holiday that I haven't accrued.

As a previous poster said, that's why so many contracts will state that you have to accrue it first.

I think asking for the money to be paid back in 7 days is the part that's dodgy. They didn't remove it themselves, to ask someone to pay it back within 7 days - that doesn't sound like a timeframe that would sit within the law.

if the company is crap, you might find that they don't chase it up.

something else to watch out for - they might retrospectively ask the person to sign a confidentiality agreement.

As far as I'm aware and I did used to be involved with employment law but it was a while ago so may be out of date. Payment has to be at an agreed rate so while they may ask for their money back it is at an agreed amount not as the complete lump sum.

On a moral note though why would they not pay it back and what were the circumstances of them walking out.

I work in payroll (though we have holiday overpayment in our contracts) & dh has been in the situtuatiim where he was overpaid salary after he left employment (as a teacher) & had to pay it back in instalments.

its a long story, I'm asking on behalf of a friend who I think has been treated badly

what I'm taking from these answers is yes, the company can ask for it back but not the full amount within 7 days, also the company cannot withhold final salary in lieu of holiday pay overpayment

I wish flowery was still on MN, shes an actual employment lawyer

ballet, is this because he had signed a contract agreeing to these terms

The way I see it (not qualified, but I do read), the employer could claim breach of contract for no notice. The employee could claim unlawful deduction from wages (as it wasn't agreed in writing). The employer could claim the cost of the unearned holiday.

The net result would be that the employee still needs to pay the holiday back, but they'll get more than 7 days to do it. A sensible person would just negotiate a sensible plan of repayment.

No. It was because he legally owed the money as they accidentally overpaid him (continued to pay his salary after he had left) he legally owed the money so negotiated a repayment plan.

I just left my job and had accrued 12 days but hadn't taken them all so the company owed me 5 days which was paid to me in my final pay packet. I'd imagine it would be the same the other way round.

Call acas

From here www.gov.uk/holiday-entitlement-rights/taking-holiday-before-leaving-a-job

They can't deduct it from your final pay without notifying you
They should tell you when the holiday year is

In their shoes I would write back and offer to repay at £20 per month (whatever they can afford)

I agree that negotiating a payment plan is the way forward, they owe the money but 7 days is unreasonable as was the salary deduction if this wasn't agreed in advance. However leaving without notice has seriously weakened their position.

thanks, diddly I posted from that page upthread but no one commented on it

SSD I think the problem is 99% of people will have a written contract which they have signed which states holiday pay will be deducted from final salary. ie. They have agreed to the deduction.

Your friends case is unusual as no written contract but she does owe the money and will have to pay However they shouldn't keep her final pay. They could claim she verbally agreed to it on starting work.

I would agree with contacting ACAS

I'm trying to get her to phone acas but shes too brow beaten by them to do it, if it was me I wouldnt hesitate

Ssd I commented on it.

sorry my mistake

I work in payroll and we always deduct any holiday that has been taken "too much" from the final pay packet and that is stipulated in the contracts.