Falkirk Council aims to ensure that all salary payments are processed accurately and timeously. However, it is recognised that occasionally overpayments in salary may occur, for example, due to administrative errors or errors in claims for allowances and expenses.

The Employment Rights Act 1996 provides that protection from deduction of wages does not apply to an overpayment of wages or employment related expenses. Under the Act, Falkirk Council is entitled to recover any sums due because of an overpayment in salary or any other allowances or payments. This entitlement is confirmed in the Statement of Particulars (SOP) issued to every employee.

The Council will endeavour to reach agreement with any employee on the method and timing of recovery.

The purpose of this Policy is to provide a fair and consistent method for dealing with the recovery of overpayments in salary.

This Policy applies to all current and former employees of Falkirk Council.

What is an overpayment?

An overpayment is monies paid to an employee over and above their entitlement in terms of their conditions of employment relating to salary/wages or related expenses/allowances.

Identifying an overpayment

Where an employee becomes aware of an overpayment in their salary, they should advise their line manager of this immediately in order that arrangements may be made via Payroll Services to recover this.

In line with the Council's Financial Regulations, services can access monthly staffing reports on Power BI (available on Inside Falkirk). These allow managers to identify any matters that may need further investigation or correction. For example, an employee who is in receipt of an unexpectedly high payment or has left employment and continues to be paid. Where a discrepancy is identified, this should be investigated by the relevant line manager in consultation with Payroll, and appropriate management action should be taken. How to manage overpayments has more information.

Human Resources will also undertake an annual audit of grades/SCPs and working weeks across Services to identify any discrepancies and will notify services of any areas requiring review/action.

Former employees

Where an employee has been in receipt of an overpayment but:

  • left the employment of the Council before the overpayment was identified
  • left the employment of the Council before the overpayment has been repaid in full, or
  • where value of any overpayment is more than any final pay due

Payroll will normally take appropriate action to reclaim any outstanding monies.

In such circumstances, Payroll will liaise directly with the individual to agree an appropriate mechanism of repayment. Where no agreement is reached or the individual does not respond to Payroll requests, Payroll will raise an invoice with Finance on behalf of the employing service for this to be progressed as a sundry debt. In doing so Finance will be provided with the name of the manager that the sundry account is to be linked to.

Exceptional circumstances

In accordance with the Council's Financial Regulations, it is the responsibility of all Chief Officers to take all reasonable steps to ensure that all monies due, which would include overpayments of salary, are collected. However, it is recognised that there may be occasions where it is considered uneconomical or impractical to commence or pursue recovery action. Case law surrounding the reclaim of overpayments is complicated and there may be exceptional circumstances whereby a service may consider it impractical to reclaim the full overpayment. For example, where an employee was given an expectation of the payment made. In some circumstances, it may be appropriate to reduce the amount to be reclaimed.

Any decision not to reclaim an overpayment, or only to reclaim part of the overpayment, should only be taken following a balanced assessment of the likelihood of full or partial recovery and in consultation with Human Resources.