Keenan v Barclays Bank plc, ET Case No. 1100792/2009

The case in brief

In Keenan v Barclays Bank plc, ET Case No. 1100792/2009, a part-time employee who had transferred from Woolwich Building Society to Barclays was mistakenly paid at the full-time rate. She had also been led to believe that she would receive a pay increase.

The Employment Tribunal found, on the particular facts, that she did not know—and could not reasonably have been expected to know—that Barclays had made an error. She was not required to repay the overpayment.

This was a fact-specific first-instance tribunal decision. It does not give employees a general right to keep money paid by mistake, but it is a useful reminder that the circumstances and the employer’s conduct matter.

01

Act promptly and establish the facts

Confirm how the error happened, the amount involved, the dates affected and what the employee was told about their pay. Delay can allow an employee to change their position in the reasonable belief that the money was theirs.

Manager action: involve payroll and HR as soon as a potential overpayment is identified, and preserve the relevant records.

02

Communicate clearly before making deductions

Explain the calculation and proposed recovery in writing. Although UK rules generally permit deductions to recover an accidental overpayment of wages, employers should still check the contract, the evidence and any dispute before acting.

Manager action: give the employee a chance to raise questions and avoid presenting an unverified figure as final.

03

Agree a proportionate repayment plan

A large deduction can create genuine hardship and damage trust. Where possible, discuss an affordable schedule and record the agreement, including what happens if employment ends before repayment is complete.

Manager action: consider the employee’s circumstances, the size of the debt and the employer’s own contribution to the mistake.