If I quit, can my employer claim back pay that was agreed to but not included in our written contract?

Question

About a year ago I started a job, my contract for it says:

Pay and Expenses

The Employee will be paid £9/hr in arrears. Salary may be increased at the direction of The Employer subject to The Employee taking on additional responsibility which is agreed upon by both parties.

Overpayments

If the Employer makes an overpayment to the Employee to which she is not entitled, or which is more than that to which she is entitled, the Employer has the right to recover the overpayment by deductions from the Employee's salary or from other payments due to them. Any deductions will normally be made over the same period that the overpayment was made.

Notice of termination

The Employee is obliged to give the Employer 4 weeks notice to terminate their contract of employment.

A couple of months into the job my employer thought I was planning to quit and as they didn't want me to I was able to negotiate a pay increase to £11/hr, and my employer asked that if he gave me a new contract with this pay increase would I agree to work there for 2 years. At the time I said yes however no written contract containing our agreement was produced, so the only documents I have are my original contract, my pay however did go up.

Now however due to a change in circumstances I would like to quit and I'm wondering if my employer could reclaim all the additional pay they have given me over the months if I do.

Answer 1

I see that most (all up to this point) answers and comments are made around if a verbal contract is binding enough for the employer to "pursue back" the extra payment that you received... but as far as I can see, they don't even need to consider the verbal agreement.

Your employer thought (and apparently was right) that you were going to resign, so they offered you a payment raise in exchange for you to stay for two more years. You verbally agreed but this agreement was never written down nor signed by any of the parts, yet your employer respected it and for X amount of time you received more money that what your initial, written, signed contract says.

Now you want to quit; as mentioned above, you only have your original contract, a contract that says two things that are key for this "dilemma":

1. The Employee will be paid £9/hr in arrears. Salary may be increased at the direction of The Employer subject to The Employee taking on additional responsibility which is agreed upon by both parties.
2. If the Employer makes an overpayment to the Employee to which she is not entitled, or which is more than that to which she is entitled, the Employer has the right to recover the overpayment by deductions from the Employee's salary or from other payments due to them.

You received payments for £11/hr, which is more that that to which you're entitled according to this (one and only) contract; so, your employer has the right to claim back those £2/hr that, officially, you were not entitled to.

IF you want to argue that, as the 1st point says, both parties agreed to increase your salary for "additional responsibilities", YOU would also have to admit that you agreed to stay for two more years, agreement that you are not complying to; so, once again, it's a point in favour for your employer.

All in all, it all boils down to how your employeer "feels" when you present your resign letter; maybe they will just agree and let you go without further issues, but if they want to claim back that payment raise, IMO they have both the right AND the arguments to do so.

Answer 2

Your verbal agreement was to fulfill 2 years of service in exchange for increased pay - it's essentially a retention payment contingent on a service period. When properly documented, it's reasonably common for a company to attempt to claw back retention or sign-on payments if the employee leaves before the retention term is finished, although the clawback and retention terms are usually explicitly stated in the contract. Whether a company actually goes through with a legally justified clawback will depend on the size of the payment, the documentation of the terms, and possibly how badly you burned bridges on the way out.

It sounds like you are in fact breaching the verbal contract you had with your employer, although your employer will likely have a hard time proving the exact terms of the verbal agreement if it goes to court, and a judge will generally look more unfavorably on contractual deficiencies coming from the party that drafted (or should have drafted) the contract. Your employer had ample opportunity to draft a written contract but did not, so it may be harder for them to claim the raise was indeed contingent on a service term. But if this question as written was used as evidence in a case, you make it fairly clear that your raise was, in fact, given in exchange for a future service term which you've failed to uphold.

Answer 3

What extra pay?

Your employer is paying you the rate you agreed.

Answer 4

Your employer can claim back money, but it would be difficult. First, you have the money, so they have to go to court to get the money - even if they win, they will lose money due to court costs. Second, in court you can say that you wanted to leave, they offered two pound more but never created a written contract. So it’s very hard to argue that they paid you more than they should have.

Answer 5

my employer asked that if he gave me a new contract with this pay increase would I agree to work there for 2 years. At the time I said yes however no written contract containing our agreement was produced, so the only documents I have are my original contract, my pay however did go up.

So here is the thing, there are two scenarios:

You implicitly agreed with the new terms by not quitting an accepting the pay rise

The pay increase was contingent on you remaining for two years. In which case, you need to pay the money back.

You didn't agree to the new terms

In which case, you've been overpaid, and need to pay the money back.