Overpayment of wages

Case 6: The facts

A recruitment agency employed Mr Lear on a basic wage of £15,000 plus commission. Lear resigned and worked his one month’s notice, but his employer deducted £1,800 from his final salary without notice; it said he had been paid commission for a particular contract but the client had defaulted on payment. Lear said this was an unlawful deduction; the employer argued that it was entitled to reclaim the money as an overpayment of wages.

The ruling

The Employment Appeal Tribunal said there is no time limit within which an employer is entitled to recover an overpayment of wages – but there was no evidence in this case that Lear had been overpaid. If he was entitled to the commission at the time when he paid it, this was not an overpayment (even if the employer was entitled to ask for reimbursement at a later date).

The tribunal had not decided how commission was calculated and therefore whether Lear was entitled to it (or, if so, whether he would have had to pay it back). The case was sent back for the tribunal to do so.