Debt Recovery Case Study Two – Overpayment of Salary

Case Study 2 – Recovering Overpayment of Salary

Issue:

Recovering monies from a former employee.

Background:

Our client is a business which provides central heating installation and repairs to residential customers.

It instructed us to assist in the recovery of monies from former employees. The debts became due as a result of:

  1. The employee having taken more leave than had accrued at the point the employment ended.
  2. The employee being liable to pay a proportion of his training costs if the employment ended within 2 years of completion of training.
  3. The employee being liable to pay for unaccounted van stock and/or unreported damage to a company vehicle when the employment ended.

Our client employed approximately 150 engineers and during the course of each year, it had a handful of cases where an employee left the business owing money.

Our client was investing significant sums in training its engineers and the contract of employment entitled it to recover those costs on a sliding scale, if the employment ended within 2 years of the completion of the course.

It also incurred expense in replenishing missing van stock and repairing damage to vehicles used by the employees.

The client was keen to recover monies it was owed but also to send a message to employees that there were consequences if they breached the terms of the contract of employment.

Action:

On receipt of instructions we considered the contract of employment to ensure that our client was entitled to take debt recovery action for the monies it was owed.

The client had delayed taking debt recovery action and some of the employees had moved since they left the company. We therefore instructed an enquiry agent to locate the former employees and to establish if they were working elsewhere.

In each case, a Letter of Claim was prepared, setting out the basis on which monies were due and attaching the contract of employment, payslips, damage repair estimates and stock inventories for the company vehicles.

Claims were issued in 11 cases and 7 converted to a default Judgment. One claim became defended and our client was successful at trial and immediately paid.

We considered the most effective method of enforcing the Judgments and opted for an Attachment of Earnings Order. This was very effective and the Judgment debts were all recovered in full.

Conclusion:

By having a well drafted contract of employment, by keeping accurate records and by taking steps to confirm the address of the former employees before it incurred any legal costs, our client was able to recover the monies it was owed quickly and at a reasonable cost.

The successful outcome of the cases encouraged the client to act sooner when an employee leaves the business owing monies and by doing so it has reduced the need for litigation.

rhw Solicitors LLP are able to draft contracts of employment for your business or review existing contracts and advise where improvements can be made. The rhw dispute resolution team are able to assist with any dispute arising out of the contract or to pursue monies which have fallen due.

Contact Details –  email: guildford@rhw.co.uk   call: 01483 302000