Overpaid for 14 months...
Discussion
Morning all, hopefully someone on here is `in the know` with how I can progress this little number...
Here's some background info. In my job I receive an annual pay increase of a set amount, dictated by a set pay scale. Each level of `management` has a set number of levels. Once I reach the top increment of that level, my salary `marks time` until promoted to the next level.
To encourage staff to develop themselves, there is an incentive in place. For each educational qualification of a set level we acheive, we are able to `jump` to the next pay level, rather than wait for our annual increase date. We get two of these during our time with the `company`. The qualifications that can be used are written down in company policy. When we want to use a qualification we go to HR and complete the paperwork. It is then checked by 2 or 3 levels of management (whos job it is to interpret company policy) prior to being sent to the national HR centre, where it is processed and applied to our pay accounts.
It has recently come to light that one particular qualification that was used by hundreds of company personnel was not eligible for this `accelerated increase of pay`. This is despite the fact it was checked by several laevels of HR and was submitted by hundreds of staff at multiple locations around the country (we are a relatively large organisation).
Everyone has dropped a pay level, and a debt raised against them. Depending on the result of a government decision in the new year, (not likely to fall in our favour), this debt will be paid back at 4 days gross pay per month. I estimate I owe around £1700 - £2000 net. Some owe nearly £10k.
I am wondering what people's views are on this, and is there any valid basis for an appeal, considering that this is in effect a huge HR mistake.
In addition, if the debt has to be repaid, am I right in thinking that we will have overpaid income tax in the past? If so, how do we go about a) calculating this and b) claiming it back?
Apologies for the long drawn out post, any advice /info you have would be greatly appreciated.
Here's some background info. In my job I receive an annual pay increase of a set amount, dictated by a set pay scale. Each level of `management` has a set number of levels. Once I reach the top increment of that level, my salary `marks time` until promoted to the next level.
To encourage staff to develop themselves, there is an incentive in place. For each educational qualification of a set level we acheive, we are able to `jump` to the next pay level, rather than wait for our annual increase date. We get two of these during our time with the `company`. The qualifications that can be used are written down in company policy. When we want to use a qualification we go to HR and complete the paperwork. It is then checked by 2 or 3 levels of management (whos job it is to interpret company policy) prior to being sent to the national HR centre, where it is processed and applied to our pay accounts.
It has recently come to light that one particular qualification that was used by hundreds of company personnel was not eligible for this `accelerated increase of pay`. This is despite the fact it was checked by several laevels of HR and was submitted by hundreds of staff at multiple locations around the country (we are a relatively large organisation).
Everyone has dropped a pay level, and a debt raised against them. Depending on the result of a government decision in the new year, (not likely to fall in our favour), this debt will be paid back at 4 days gross pay per month. I estimate I owe around £1700 - £2000 net. Some owe nearly £10k.
I am wondering what people's views are on this, and is there any valid basis for an appeal, considering that this is in effect a huge HR mistake.
In addition, if the debt has to be repaid, am I right in thinking that we will have overpaid income tax in the past? If so, how do we go about a) calculating this and b) claiming it back?
Apologies for the long drawn out post, any advice /info you have would be greatly appreciated.
Edited by ben_h100 on Saturday 24th November 11:24
I assume the error is a genuine one.
Notwithstanding the responsibility for the error, the fact is that a person cannot simply benefit by that error. The organisation is entitled to (a) immediately commence paying the correct amount and (b) take steps to secure repayment of the overpaid amount. It has these duties because of responsibilities to other parties; why should they bear the burdon of financing the mistake?
The person who has received the overpaid amount must take all steps to mitigate the overpayment. This usually means developing a repayment schedule. For example, you could propose repayments are made each month over a period equal to the period the repayment was in place; so, if it has been discovered that you've been overpaid for two years you could propose repayment in 24 monthly instalments. You will need to agree something reasonable and acceptable to both parties.
There is also the matter of "change of position". This is where you have genuinely not been aware of the overpayment so you have made financial commitments that you cannot now undo. For example, you went on a extra special holiday and the money's been spent. You will need to show that you did not do this knowing you had been overpaid and you may be asked for copies of bills etc. Note that something like paying more off a loan is not "change of position" because you can mitigate this by increasing the loan again.
It could be that your employer may offer some small amount of compensation for your distress and inconvenience, say £100.
Re income tax, you have obviously overpaid it and it is recoverable from HMRC. If you agree a repayment schedule against future income then PAYE will sort this out. If you do self assessment then you can organise the overpaid tax via that system. If the overpaid tax spreads across more than one income tax year then it's more complicated because tax rates change each year. If as you say there are many other employees in a similar situation I think there's a case for the employer to liaise with HMRC to arrange for the individual tax reclaims to be set up once repayment schedules have been agreed.
R.
Notwithstanding the responsibility for the error, the fact is that a person cannot simply benefit by that error. The organisation is entitled to (a) immediately commence paying the correct amount and (b) take steps to secure repayment of the overpaid amount. It has these duties because of responsibilities to other parties; why should they bear the burdon of financing the mistake?
The person who has received the overpaid amount must take all steps to mitigate the overpayment. This usually means developing a repayment schedule. For example, you could propose repayments are made each month over a period equal to the period the repayment was in place; so, if it has been discovered that you've been overpaid for two years you could propose repayment in 24 monthly instalments. You will need to agree something reasonable and acceptable to both parties.
There is also the matter of "change of position". This is where you have genuinely not been aware of the overpayment so you have made financial commitments that you cannot now undo. For example, you went on a extra special holiday and the money's been spent. You will need to show that you did not do this knowing you had been overpaid and you may be asked for copies of bills etc. Note that something like paying more off a loan is not "change of position" because you can mitigate this by increasing the loan again.
It could be that your employer may offer some small amount of compensation for your distress and inconvenience, say £100.
Re income tax, you have obviously overpaid it and it is recoverable from HMRC. If you agree a repayment schedule against future income then PAYE will sort this out. If you do self assessment then you can organise the overpaid tax via that system. If the overpaid tax spreads across more than one income tax year then it's more complicated because tax rates change each year. If as you say there are many other employees in a similar situation I think there's a case for the employer to liaise with HMRC to arrange for the individual tax reclaims to be set up once repayment schedules have been agreed.
R.
I disagree with The Leaper. People benefit from errors all the time!
There was an Employment Tribunal case a while ago where an bank employee had been paid more than she should have, double I think, and for several years too. The bank wanted it back but the Tribunal found in the employees favour.
Maybe worth trying to find it on the net to see if it is relevant to your situation.
There was an Employment Tribunal case a while ago where an bank employee had been paid more than she should have, double I think, and for several years too. The bank wanted it back but the Tribunal found in the employees favour.
Maybe worth trying to find it on the net to see if it is relevant to your situation.
I think that the main gripe is that the HR people across the organisation all made the same mistake. In addition, people who have left since this came to light will have not have to repay anything.
As for the tax years, this goes back to 2004, so you have multiple pay spines over multiple tax years. How on earth they will work it out I don't know.
There is talk of repayment plans being put in place however this will be on a case by case basis. 4 days gross pay a month is the default repayment `scheme` - thats the majority of my mortgage!
Thanks for your advice/insight, if anyone else has something to contribute it will be much appreciated.
As for the tax years, this goes back to 2004, so you have multiple pay spines over multiple tax years. How on earth they will work it out I don't know.
There is talk of repayment plans being put in place however this will be on a case by case basis. 4 days gross pay a month is the default repayment `scheme` - thats the majority of my mortgage!
Thanks for your advice/insight, if anyone else has something to contribute it will be much appreciated.
ben_h100 said:
As for the tax years, this goes back to 2004, so you have multiple pay spines over multiple tax years. How on earth they will work it out I don't know.
There is talk of repayment plans being put in place however this will be on a case by case basis. 4 days gross pay a month is the default repayment `scheme` - thats the majority of my mortgage!
I don't understand a couple of things about the mechanics of how it happened but they're not really relevant.There is talk of repayment plans being put in place however this will be on a case by case basis. 4 days gross pay a month is the default repayment `scheme` - thats the majority of my mortgage!
However it seems absurd to me that a large company is going to seek repayment for its own, widely applied, error. I can't believe anyone would consider that reasonable. And taking 20% of someone's pay per month is way OTT.
Are the affected people in contact with each other? Surely there will be someone amongst them who will want to challange this.
It's not a public body is it?
Dixie68 said:
This sounds suspiciously like an RAF PSF cock-up - I was subjected to a few in my time and this is always the way they went. Funnily enough, when they realised they'd underpaid motor mileage for years in the 90s we got naff all back 
Dixie, you are correct, but this is off the scale! RAF wide, numerous trades and ranks involved.ben_h100 said:
Dixie68 said:
This sounds suspiciously like an RAF PSF cock-up - I was subjected to a few in my time and this is always the way they went. Funnily enough, when they realised they'd underpaid motor mileage for years in the 90s we got naff all back
Dixie, you are correct, but this is off the scale! RAF wide, numerous trades and ranks involved.... (I'm hoping you're not either trade)!It's a kick in the nuts right enough but as with the ones I mentioned above we never managed to get around it and always had to pay it back, even when they changed the rules (rates paid on detachment being one example that changed and had us paying money back that before we'd been entitled to).
I feel for you mate.
ETA: mind you this sounds like a policy cock-up at Innsworth (if that's still where the policy makers are based)?
Edited by Dixie68 on Saturday 24th November 13:40
Umm - I know a little knowledge is worse than knowing nothing when it comes to law but...
When I did law years ago I thought that if it was an obvious mistake (like they paid you maternity or something clearly not due) then you have to repay it. But if you received it believing that it was correct and lived to those means then they can't recover....
I know that contracts often have lines in them stating they can reclaim but it's well worth proper advice. Being HM armed forces as well media may help cause a fuss.... Especially if injured servicemen and the like are caught up in it.
You're going to take the hit going forward - they should take the hit for the past
When I did law years ago I thought that if it was an obvious mistake (like they paid you maternity or something clearly not due) then you have to repay it. But if you received it believing that it was correct and lived to those means then they can't recover....
I know that contracts often have lines in them stating they can reclaim but it's well worth proper advice. Being HM armed forces as well media may help cause a fuss.... Especially if injured servicemen and the like are caught up in it.
You're going to take the hit going forward - they should take the hit for the past
Lawrence5 said:
When I did law years ago I thought that if it was an obvious mistake (like they paid you maternity or something clearly not due) then you have to repay it. But if you received it believing that it was correct and lived to those means then they can't recover....
That sums it up in a nutshell.Redmans Solicitors said:
The employee may be able to stop their employer from deducting sums from their wages if they have been overpaid if the 3 conditions for promissory estoppel are met:
The employer must have generally made a representation of fact which led the employee to believe that he was entitled to treat the money as his own; and
The employee must have “changed his position” (i.e. spent either some or all of the money) in good faith and without notice of the employer’s wish to be reimbursed the overpayment; and
The overpayment to the employee must not have been primarily caused by the fault of the employee
As can be seen from the above, employees do have a degree of protection from overpayments being reclaimed by their employer. However, these protections are limited. Below is a list of issues that the employee should consider in such circumstances:
Has their employer possession of evidence of the overpayment?
Has the employee been led to believe that they were entitled to the money they were overpaid?
Is the overpayment primarily caused by the fault of the employer?
Has the employee spent the money in reliance on the fact that they were believed that the money was theirs?
The employer must have generally made a representation of fact which led the employee to believe that he was entitled to treat the money as his own; and
The employee must have “changed his position” (i.e. spent either some or all of the money) in good faith and without notice of the employer’s wish to be reimbursed the overpayment; and
The overpayment to the employee must not have been primarily caused by the fault of the employee
As can be seen from the above, employees do have a degree of protection from overpayments being reclaimed by their employer. However, these protections are limited. Below is a list of issues that the employee should consider in such circumstances:
Has their employer possession of evidence of the overpayment?
Has the employee been led to believe that they were entitled to the money they were overpaid?
Is the overpayment primarily caused by the fault of the employer?
Has the employee spent the money in reliance on the fact that they were believed that the money was theirs?
Countdown, thanks for that info.
Promissory Estoppel sounds right in this circumstance.
As for the fault of the employer - it states on the paperwork that is is down to HR to check the qual is eligible and then approve if so. They have approved it across the board, and now decided 'oh, actually we shouldn't have approved that! We want our money back!'
Would this be the main factor? I can get the exact wording off the form if required.
Promissory Estoppel sounds right in this circumstance.
As for the fault of the employer - it states on the paperwork that is is down to HR to check the qual is eligible and then approve if so. They have approved it across the board, and now decided 'oh, actually we shouldn't have approved that! We want our money back!'
Would this be the main factor? I can get the exact wording off the form if required.
ben_h100 said:
Countdown, thanks for that info.
Promissory Estoppel sounds right in this circumstance.
As for the fault of the employer - it states on the paperwork that is is down to HR to check the qual is eligible and then approve if so. They have approved it across the board, and now decided 'oh, actually we shouldn't have approved that! We want our money back!'
Would this be the main factor? I can get the exact wording off the form if required.
BenH - yes it probably would. Normally I would suggest contacting your Union or speaking to a solicitor but I'm not sure where you stand as you are in the Army.Promissory Estoppel sounds right in this circumstance.
As for the fault of the employer - it states on the paperwork that is is down to HR to check the qual is eligible and then approve if so. They have approved it across the board, and now decided 'oh, actually we shouldn't have approved that! We want our money back!'
Would this be the main factor? I can get the exact wording off the form if required.
hadenough! said:
Is this a genuine surprise to you, or did you have an incling it might Happen?
100% genuine surprise. I estimate 4-500 people are affected (minimum estimate!); the applications were submitted in good faith as the HR staff told us we could use it - they approved the thing!What appears to have happened is they (HR) have misinterpreted/not used company policy/documents. During, and following the time the majority of these applications were being processed, our employer switched over to a new electronic HR system. perhaps this was one of the reasons? I doubt this number of people would have submitted this if there was any inkling that it wasn't a valid request. Firstly, we might end up on the end of a major b
king, secondly something like this might rear it's head.Any further advice/opinion is much appreciated, especially regarding promissory estoppel.
ben_h100 said:
Super thread bump!
Today around 1500 people have had the news that this overpayment needs to be paid back. Amounts owed vary from 20p to £20k.
If anyone is able to read through the main thread and offer any advice/info, it would be appreciated.
Ben - normal procedure is as set out in the link below.Today around 1500 people have had the news that this overpayment needs to be paid back. Amounts owed vary from 20p to £20k.
If anyone is able to read through the main thread and offer any advice/info, it would be appreciated.
http://www.co-operativelegalservices.co.uk/employm...
However with you being in the Army I'm not sure if it would apply. Can you take them to Tribunal?
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