Ex-employer wants to recover holiday pay

philipellis · PayPerShop Newbie Joined: 23 Jun 2008 Posts: 2

A friend of mine is in an 'interesting' position and is looking for some advice.

She left her last job late last year and shortly afterwards received a letter with an invoice attached for 4.5 days of holiday that was paid before she was entitled to it.

Having tried to contact them on a few occasions she gave up and didn't hear anything until last week when another letter arrived saying that she must pay in 7 days or the company's solicitors would start action against her and she would be liable for costs and interest.

She wonders:

1) What is the legal position with regard to this?
2) Shouldn't they have sorted this out with her last salary payment?
3) Does the fact that it's been so long make a difference?

Incidentally she left in part because her line manager made life difficult and she ended up doing a different job to what she was employed to do. Rather than make a big deal of it she moved on but this development over holiday pay has angered her and she's now wondering if she can make a claim for constructive dismissal or similar.

Thanks for looking and I hope you can help.

Philip

Ian Whyteside

Philip,

Two recovery of overpayments in the same day, there must be something in the water.

I think this case would tend to emphasise the rule that the more you ignore something the more painful it is when it comes back to haunt you.

In the future I would suggest that your friend, upon receipt of a demand like this, wrties back immediately to refute the inference that she owes any money until a full explanation of the circumstances is supplied.

That way if the matter moves on she can show that she responded to the demand and therefore no further action can be taken until the repsonse is dealt with.

In this case the statute of limitations on the debt has not run out, so the former employer can continue to demand and take the matter further to the courts but the deadline for raising a formal complaint at a tribunal is long gone. She may find it worthwhile submitting a claim and explaining the delay the way you have done. That she felt the matter was best left because she could not get in touch with them may not be seen as a resonable excuse for the delay in submitting a complaint.

In answer to your specific questions, the legal position is that if they can prove she was overpaid then they can recover it as long as they go throught the correct procedure. They have issued an invoice and they are pursuing that invoice, so they have followed the correct process.

Of course they ought to have sorted it out more quickly but in reality there is often a gap, perhaps the payment was audited afterwards and the error discovered that way, perhaps the manager thought the payment was correct and then realised it wasnt or perhaps some of her leave was not recorded correctly. Finally, the time delay is important, employers are required to act quickly but the legal system does allow for reasonable delay.

Again I think the most important message for us all is that if it looks important we ought to deal with it quickly.

Ian Whyteside

philipellis · PayPerShop Newbie Joined: 23 Jun 2008 Posts: 2

Hi Ian

Thanks for your quick response.

It sounds like she'll have to bite the bullet and pay up but before that just one more question.

Does the fact that they've left it well over 6 months before chasing make any difference at all? I'm thinking it might be a good idea for her to negotiate with them on the basis that they've left it so long. She can't lose anything by it I guess.

Regards.

Philip

Ian Whyteside

Philip,

It is difficult to say because she no longer works there and therefore there is little scope to argue it out from an employment rights point of view.

This is a civil debt now and the statute of limitations is about 6 years, not 6 months. If she was still employed i would have advocated arguing that the delay gave her the right to consider that the money paid to her was hers to dispose of as she pleased, but we cannot argue this here.

I would demand a detailed breakdown of the calculation to make sure her statutory paid leave was honoured and that the correct allowance for income tax and nic was made, but really these are delaying tactics. Whatever happens she needs to respond now, if she leaves it there will be additional costs.

Ian Whyteside