The Employment Relations Authority has ordered an employee to pay his employer over $262,000 after he was overpaid.

The employee initially applied to the Authority for compensation that he believed he was owed after he was made redundant by his employer.

The employer claimed that they were withholding the redundancy payment from the employee, as he had been significantly overpaid for his work. They stated that they would make the redundancy payment once the employee returned the amount overpaid by the employer.

The employee had been domiciled in different countries at different times during his employment. Whilst domiciled in both China and Germany, the employee arranged for a split payment of his salaries between countries. The employer however arranged for the employee to be paid in New Zealand.

The employee was receiving three separate payments for his salary at times during the employment relationship, as he was being paid in all three countries.

The Authority had to decide whether the overpayments to the employee constituted unjust enrichment.

It was decided that the payments constituted unjust enrichment, as the employee knew or ought to have known that he was not entitled to such payments. The Authority decided that the amount owed by the employee was over $410,000.

It was decided that the employer was entitled to receive the overpaid salary back from the employee, as the employee provided no legal basis as to why he should be entitled to keep the overpaid wages.

The employee was ordered to pay the full amount of overpaid salary, less the redundancy payment that the employer withheld from him. This totalled a sum of $262,000 to be paid to the employer.

If there is confusion around your rights as an employee, it pays to seek advice from a professional with experience in the area.

 

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Alan Knowsley & Matthew Binnie

Litigation Team
Wellington