Can the employer reclaim overpayments of wages made in error?

It is possible when there is no dispute about the existence of the debt and the amounts are liquid and due.

Case study

Following a company subrogation and given that the remuneration received by the employees of the transferring companies was lower, the company establishes the differences in remuneration for each employee.

Taking the view that it had paid that supplement in excess, the undertaking informed each of the workers that it was going to regularise the amount paid over the next 10 months by means of payroll deductions.

It points out that the cause of that excess was the failure to take into account the payment of an extra pay received by the transferor’s employees.

The company’s trade union representatives take the view that the company has assumed the right to deduct certain amounts from the employees’ paychecks, which it does not have the right to do. It takes the view that the company must resort to legal proceedings and that it cannot apply the rule of set-off of debts. It therefore brought an action for collective dispute before the Social Division of the Audiencia Nacional (National High Court).

The Audiencia Nacional recalls the doctrine of the Supreme Court on the offsetting of debts in the framework of labour relations and points out that this cannot operate if it is not clearly established that the worker is a debtor and that his debt is due, liquid and payable. The specific case must be analysed in order to determine whether there is a real dispute as to the existence of the debt and its enforceability, so that, if there is no proof of the debtor’s acceptance, it is not sufficient to invoke the existence of an error in order to compensate what is allegedly owed by the worker by means of offsetting.

In the case in question, there was no dispute over the interpretation or application of any legal, conventional or contractual rule, but rather the discrepancy consisted of whether it was appropriate to carry out an accounting readjustment by means of compensation between what had been paid for extra pay and what should have been paid, the National Court concluded that the application of compensation was appropriate and that the employer could adopt it without the need for a prior court ruling.

In conclusion, the claim brought before the labour division of the National High Court was upheld.

If you have any questions regarding this subject, please do not hesitate to contact us by telephone, Isabel Torre Carazo or by email at itc@btsasociados.com, we will be delighted to help you.