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Employee entitled to retain overpayment of wages

Employers are generally entitled to recover overpayments made to employees. The issue will often be practical rather than legal. Can the employee afford to repay in one go or should the repayment be spread out over a number of salary payments?

But a genuine mistake will not always entitle an employer to recover an overpayment.

Following long service at the Woolwich Building Society, the employee’s part-time employment was transferred to Barclays Bank where, as a result of the Bank’s oversight, she was paid at the full-time rate for her job. The employee had been led to believe that she would receive a pay increase following the takeover.

The Employment Tribunal found that she was not obliged to repay the overpayments and the Bank was obliged to continue to pay her at the higher rate. She had not known of the Bank’s error, nor could she reasonably have been expected to know about it.

Keenan v Barclays Bank Plc [2009].


Employment Department

Raj Dhokia: r.dhokia@fglaw.co.uk