The Employment Rights Act allows an employer to recover overpayment of wages, which includes expenses and other allowances.
Such a deduction from wages would, therefore be lawful, although the Employment Appeal Tribunal has ruled, in one case, that it only applies to the last pay period.
However there may be occasions where the overpayment, was the result of an 'error of law', rather than an 'error of fact'. In other words the overpayment is the result of a misinterpretation of some regulation rather than a simple clerical error.
Where the worker genuinely believed he or she was entitled to the overpayment and had spent the money (usually on exceptional or non-regular purchases) in good faith, a civil court might decide that the employer was not entitled to recover.
If you think you have been overpaid, you should contact your employer immediately to check whether or not you are entitled to the ‘extra’ money. Not only should this stop you from spending money to which you are not entitled, if your employer confirms (preferably in writing) that you are entitled to the payment it could be unlawful for your employer to then later deduct the amount in question from your wages on the basis of an overpayment.
