Legal advice please - Overpayment

[Grahameeboy]

What you have here is innocent mistake by both parties. Essentially, mutual mistake.

The basic rule is that the money is repayable. You weren't expecting it and aren't claiming any right to it. Fair enough. The employer did not intend or owe the payment to you, it was transferred by mistake.

As a matter of interest there are examples of prosecutions of people who have discovered windfall sums mistakenly deposited into their bank accounts. If they spend it, the law says they have no "colour of right". No lawful expectation that the money is theirs.

However there is an exception which could apply in your case. If you had received the money in good faith ie. had no reason to think it was an error, and spent it honestly believing it was yours, then you can't be compelled to repay. Particularly after this length of time.

For example, you are told bonuses/holiday pay will be credited and a largish lump arrives, most people won't go into the detail.

The counterargument is that if you normally receive say $1000/fortnight, and suddenly $10,000 appears, it is damned hard to argue you legitimately expected it. Hope this helps.

The doctrine of 'Estopel'.....think I spelt it right.

[Biff]

(d)That overpayment is recovered not later than 2 months after that notice is given.

...interesting.


Where do you get this stuff from Mr Ryder? Darned useful it be.

[McJim]

Good job the company ain't in Europe - EEC human rights court would see the company bust if they made ANY attempt to suggest the money be recovered.

Seems NZ law is set up to bully the little fellas and protect the companies.

[Winston001]

Skyryder - You make a good point and the terms of any employment agreement could be helpful. However this error occurred a year ago and "in good faith", which is implied into all employment relationships, Biff could argue too much time has passed.

Graham - good call, Estoppel.

[Bykmad]

Biff.

Check your employment contract, as there is normally a clause in that saying what happens re overpayments. The contract I use states that any over payment can be requested to be repaid by the employer.

[Baldyheed]

Spend the lot, then sell everything you own (including the wife), then go and join the French Foreign Legion (free trips round some uninteresting parts of North Africa, Central America and the Far East)

[Beemer]

I got overpaid recently, by a paltry $4 - they'd written the cheque out for but the invoice I'd submitted was for $4 less. I pointed it out so they could amend their records, thinking they would probably just write it off - yeah, right! They wanted me to send them a cheque so I pointed out that it would cost me postage and for the cheque, so I asked for their bank account details and said I'd pay it next time I was in town. A week later I got an email asking when I was going to pay it! So I deliberately made a manual deposit rather than paying it online, so it probably cost them $3.50 to recover the $4!

I know you are legally obliged to pay back any overpayment, but considering this company regularly make me wait three months for payment, $4 should have been written off.

[jaybee180]

I found myseslf in just this situation a year or so ago, and the overpayment was over a year old. Our employment contract covers overpayments so I knew it had to be paid back. But you are not forced to pay it back in one lump some and automatic payments were organised. In saying that though it's not allowed to be a paltry sum that takes years and years to repay. Check your contract, but I think you will find that even if it's not stipulated in the contract you are still obligated to pay it back. But you can do it on reasonable terms.

[Drunken Monkey]

Seems NZ law is set up to bully the little fellas and protect the companies.

You've never been an employer, have you?

[What?]

...interesting.


Where do you get this stuff from Mr Ryder? Darned useful it be.

You will find all sorts of interesting stuff here.

A bit concerning hearing about EA's having clauses relating to overpayments - seems that some employers are happy to admit that they are careless with their money???
The law is quite clear - you do have to pay it back, and the amount & period are by agreement, but both sides have to be reasonable. If no agreement can be made, then you take it to the Labour Dept for mediation.
In this case, as they hadn't noticed the overpayment for 12 months, a 24 month repayment period would be considered reasonable.

[Steam]

In this case, as they hadn't noticed the overpayment for 12 months, a 24 month repayment period would be considered reasonable.

Yes, that sounds right.
When I worked for a giant evil electricity company, if we made a mistake in billing but didn't notice it for six months, we gave the customer the same length of time to pay it.