Worker

Employer

Anonymised Parties

A worker

A charity

Representatives

SIPTU Workers Rights Centre

Ibec

Act

Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 13 of the Industrial Relations Act, 1969

IR - SC - 00004171

22/04/2025

The employee was overpaid approximately €8,400 while on sick and parental leave.  When she was notified of the employer’s intention to recoup the money she tendered her resignation.  The employer’s procedures provided for overpayment recovery over a period of 12 months.  However, because the employee was leaving, the employer deducted her entire last month’s salary leaving the employee to face hardship and associated stress.

The case relates to dispute between the worker and her former employer in relation to the handling of an overpayment by the respondent and the financial hardship and stress this has caused to the complainant.

The respondent did not follow their own policy on the Management of Salary Overpayments.  As a result, the complainant’s entire monthly pay for April 2005 was deducted from the overpayment.  The complainant is seeking to be compensated for the manner that the overpayment was dealt with by management which left her in a dire financial predicament.

 In October 2024, the Employer’s Human Resources Connections (“HRC”) department provided incorrect information in relation to the complainant’s sick leave balance. In addition to this, an error occurred when a request for parental leave was being processed on 5th November 2024 incorrectly led to reinstatement of full pay with effect from 17th September 2024. In addition to this, these errors had a significant impact on the complainant’s salary during this period and led to the overpayment in question which amounted to €8,454.30 in total.

 On the 20th March 2025 the complainant had a phone call with the Regional Manager (Mr A) who informed her that repayments would commence with effect from the March payroll and would commence at the amount outlined on the repayment schedule, €704.25.  The complainant had already informed Mr A that she could not afford to pay this amount.

On the 21st March 2025 the complainant submitted a grievance in relation to the handling of the overpayment.  A stage 2 grievance hearing was held on the 17th April 2025.  At the end of the hearing the complainant queried the amount of the next deduction from her salary, and she was advised to contact her direct line manager.

The complainant emailed her manager, Mr A, on the 17th April 2025 and in a phone call and email the following day she was informed that “I have advised you that your net pay for April of €6094 will be recouped from the total overpayment that you owe therefore you will not receive payment in April.”  

 On the 23rd May 2025 the complainant was informed by letter that her grievance was not upheld.

An appeal hearing was held on the 16th June 2025, and the complainant was informed on the 2nd September 2025 that her appeal was not upheld.

Union’s Position 

 If a Manager Request (MR) had been submitted prior to 7th October 2024, it is our understanding that no overpayment would have occurred. If the steps were only taken to resolve this matter in November/December 2024, the complainant understanding is that MRs that may have been necessary prior to this period were not submitted.

Also, in February 2025, the complainant understanding is that there was a retrospective MR submitted in relation to reduced hours during the period from 27th January 2025 to 31st January 2025. Once again, if this MR had been submitted in a timely manner that this overpayment of €396.09 would not have occurred.

 As per Section 3.0 General Provisions / Procedure of the Management of Salary Overpayments policy, “(The employer) will ensure a fair and consistent approach to recoupment of overpayments. Every effort will be made to ensure that the payment of salaries is undertaken in a way that minimises inaccuracies. However, where an overpayment arises because of a processing error, the application of relevant policies around leave or the departure of an employee from the organisation the following approach will be taken to ensure that the error is resolved as efficiently and as quickly as possible.”  We do not believe that this error was resolved as efficiently and as quickly as possible by the employer.

 This overpayment is related to the previous tax year in 2024; therefore, it would be required to be deducted from the complainant’s net pay. This issue was initially identified in October 2024; however, the final calculation of the sick leave entitlements and overpayment was not completed until late January/early February 2025.

 As per Section 3.0 General Provisions / Procedure of the Management of Salary Overpayments policy, “All repayments by employees to (the employer) should be completed within a maximum duration of 12 months.”

However, this section also states, “If you have to pay back a large sum of money, or if it is deemed that the amount will cause you significant financial strain, then the 12-month repayment period can potentially be extended. However, this will only apply for exceptional cases.”

In this case it was a large sum of money €8,454.30 and it caused a significant financial strain on the complainant.

 Notification of Overpayment – As per Section 3.1 Notification of the Management of Salary Overpayments Policy, “Employee is told how this has occurred, the full amount of money involved and is given the repayment schedule.” The reason provided for this overpayment on the Overpayment Notification Template was “Change to zero pay back dated to 07/10 and phased return to work backdated to Jan.” This was not an adequate explanation of the root cause of this overpayment as required under this Policy which is why the complainant had to follow up on this and request a more detailed explanation.

Notification of Overpayment – As per Section 3.1 Notification of the Management of Salary Overpayments Policy, “If a line manager & employee don’t agree a repayment plan, HRC will send a letter to the employee, detailing the repayment plan. The employee has 10 days from receipt of this letter to appeal the repayment plan/payment amount. This is not a grievance.”  The complainant did not confirm agreement to the overpayment schedule or the proposed monthly repayment amount. Therefore, the complainant should have received a letter from the employer as per this Policy, but she did not receive same and therefore could not formally appeal the overpayment amount due.

 On 18/04/2025, the complainant was contacted by Mr A and informed that her total net pay for her final month’s salary in April 2025, which amounted to €6,096.00, would be recouped by the employer to cover some of the total repayment €8,451.30. This was in addition to the €704.27 that had already been deducted from the complainant’s March 2025 salary payment. This meant that the complainant had €6,800.27 in total deducted from her final two monthly salary payments in March and April 2025. Given that the complainant had already outlined the financial impact the overpayment of €704.27 would have on her, given that the complainant was serving out her 8 weeks’ notice period and had advised Mr A that she did not have a new job lined up, to then recoup all of her final salary in April was wholly unethical and excessive by the employer. This notification by Mr A on 18/04/2025 was also extremely last minute and was likely after the employer had processed April 2025 salaries so there would have been no opportunity to reverse this decision at this late stage.

 The above points highlight where the respondent’s handling of this overpayment was not in line with their own internal Management of Salary Overpayments Policy.

Legal/Policy Basis

In accordance with the principles of The Payment of Wages Act 1991, deductions from wages must be lawful and agreed or reasonably justified. The immediate deduction/repayment request without following proper procedure is inconsistent with both legal obligations and internal policy.

 In accordance with the principles of the Act and natural justice it can’t be considered fair and reasonable having regard to all the circumstances of this case to deduct an employee’s entire salary and leave them with no income for the month.  The complainant was only given two days’ notice of the deduction, and it was not possible for her to make alternative arrangements.  

 Conclusion

 The respondent failed to follow internal policies and procedures in this matter and ensure that any repayment arrangement is fair, transparent, and consistent with company policy.

 The recoupment of the complainant’s full salary in April 2025 was excessive and totally unreasonable and left the complainant in a dire financial predicament when she had no immediate new source of income at that time and she should be compensated.

Preliminary issue

The Claimant is no longer an employee of the Respondent; in this case it is the Respondent’s position that there is no recommendation applicable in the case of the Claimants grievance and the initial repayment plan that was in dispute. 

Section 13. (2) of the Industrial Relations Act, 1969 as amended provides the following in relation to trade disputes:

“(2) Subject to the provisions of this section, where a trade dispute (other than a dispute connected with rates of pay of, hours or times of work of, or annual holidays of, a body of workers) exists or is apprehended and involves workers within the meaning of Part VI of the Principal Act, a party to the dispute may refer it to a rights commissioner.”

It is the Respondent’s contention that the Complainant no longer falls within the definition of a worker under Part VI of the Principal Act which defines a worker as the following, as amended in the 1990 Act.

“23.—(1) In the Industrial Relations Acts, 1946 to 1976, and this Part, “worker” means any person aged 15 years or more who has entered into or works under a contract with an employer, whether the contract be for manual labour, clerical work or otherwise, whether it be expressed or implied, oral or in writing, and whether it be a contract of service or of apprenticeship or a contract personally to execute any work or labour including, in particular, a psychiatric nurse employed by a health board and any person designated for the time being under subsection (3) but does not include—

a person who is employed by or under the State, a teacher in a secondary school, a teacher in a national school, an officer of a local authority,

an officer of a vocational education committee, or an officer of a school attendance committee..”

The Complainant resigned from employment with the Respondent on April 22nd, 2025 and no longer holds a contract of employment with the Respondent and has not since this date. 

The Respondent requests that the Adjudication Officer dismiss this complaint with consideration that the Complainant is no longer a Worker as defined in the abovementioned Acts.

Substantive issue

The Claimant commenced employment with the Respondent on June 22nd, 2020, and was promoted from December 17th, 2021. The Claimant was contracted for 35 hours per week and was paid a salary of €54,988.99. The Claimant resigned from employment on April 22nd, 2025. This dispute relates to the recoupment of an overpayment of wages upon the Claimants cessation of employment.

The Claimant was paid in error whilst on sick leave from September to November 2024, this led to an overpayment amount of €8,451.30.

The Claimant was notified of this overpayment in January 2025. On February 25th M A, the Claimants manager, confirmed the overpayment remained outstanding, part of this thread advised by payroll advised that the organisations Overpayment Policy would apply, which had a minimum monthly repayment of 8% of salary.

On March 3rd, 2025, the Claimant informed Mr A of her intention to resign, with notice due to the overpayment issue. Mr. A responded and requested to meet the Claimant.  Mr A also asked that she reconsider her decision. The Claimant raised a grievance in relation to the overpayment on March 21st, 2025. 

The Grievance was heard on April 17th, 2025, the outcome of this grievance, held at stage 2 of the Respondent Grievance procedure was not upheld.

The Claimant left employment on April 22nd, 2025, the overpayment remained unrecouped at this point and the Respondent informed the Claimant that the sum of €6,094 would be recouped from her final salary. 

The Claimant appealed this outcome, the appeal was heard on June 16th, 2025. The Outcome of this appeal was issued on September 2nd, 2025, and was not upheld.  The findings of this grievance were that management acted in line with policy seeking 8% of salary per month as recoupment and further recoupment from final salary. The outcome however did make the following recommendations:

•             The Stage 2 findings be upheld.

•             To review why HRC did not notify the employee of the overpayment as outlined in policy.

 It is the Respondent’s position that the recoupment of overpaid wages was done in compliance of Section 5(5) of the payment of wages Act, which allows in these cases for an overpayment to be recouped without the provisions of the previous headings of Section 5 of the Act in the cases of overpayments. 

The Claimant had benefitted from this overpayment and claims they were unable to pay the amounts overpaid in error. It is the Respondent’s position that the deduction in April 2025 posed no detriment to the Claimant as they had already received this payment between September and November 2024, the Claimant had in fact been aware the overpayment existed from as early as January 2025. 

The Respondent has an established policy for overpayments and repayment of same. The Respondent acted in line with this procedure until the claimant left employment, had the claimant remained in employment recoupment would have remained at the 8% basis outlined in policy. However, given the claimant resigned prior to the first recoupment in April 2025. The Respondent was left with no option but to recoup the maximum repayment from the Claimant’s final salary. 

Even with this recoupment an amount of €1,651.03 remained outstanding upon the Claimants cessation, the Claimant agreed repayment of €100 per month however as of submission no repayment efforts have been made. 

The Respondent maintains that the deduction made from the Claimants final wage was lawful and reasonable with consideration of the Claimants refusal to engage in repayment of the overpayment, likewise the claimant’s expectation of compensation whilst repayments remain outstanding in relation to the overpayment is completely unreasonable. 

The Stage 2 Grievance was held on April 17th, 2025, it was recognised in the Grievance outcome that although the Claimant had left employment the outcome would be made to their Trade Union Official. 

The Claimant appealed this Grievance to stage 3 on June 16th, 2025, the Claimant left employment on April 22nd 2025. Had the Claimant remained in employment they may have sought an extension of the repayment plan up to 4 years, given the Claimant resigned prior to the first repayment this was not an option.

In conducting my investigation, I have taken into account all relevant submissions presented to me by the parties.

Preliminary Issue  -  Worker

The employer has argued that the employee does not meet the definition of worker as she has left the employment.  The complainant was a worker at the time of the issue central to this dispute.  Furthermore, the respondent treated her as a worker after she had left and processed her grievance.  I therefore believe she meets the definition of worker within the Industrial Relations Act.

Payment of Wages Act

 In the submission presented at the hearing by the union reference was made to the deduction not being in compliance with the Payment of Wages Act.  No reference was made to this in the complaint made by the employee to the WRC  and therefore I do not have jurisdiction to deal with any such complaint.  In any event Section 5(5) The Payment of Wages Act 1991 states;

Nothing in this section applies to

a deduction made by an employer from the wages of an employee, or any payment received from an employee by an employer, where—

the purpose of the deduction or payment is the reimbursement of the employer in respect of— any overpayment of wages,

The  Act therefore, specifically provides for an employer to recoup overpayments.

Substantive issue.

There were errors by the employer which led to the overpayment and, in line with good practice, the employer had a procedure in which it outlined what would be done in the event of such an overpayment occurring. There was nothing in the procedure which provided for the exceptional  circumstances of the employee leaving shortly after the overpayment was discovered. There is an obligation on any organisation to recoup any such overpayments and I believe the respondent was correct to attempt to do so.  I think the action to recover the money in a foreshortened time period (the majority from her final pay check) was precipitated by the concern that the employee handed in her notice when she was advised that she would be expected to repay the money.

However, no evidence was presented to me that the employer took on board the inevitable hardship that the employee would endure when all of her income was stopped.  I cannot believe that it was beyond the capacity of the employer to create for example a signed binding agreement with the employee that would have facilitated repayment over a more practical period of time and in line with their own procedures.

The employer has stated that there is still an amount in the region of €1,650 owing.  In light of the foregoing I recommend that the employer waive the outstanding money in final settlement of the dispute.

Recouping overpayment in one lump sum