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Overpaid Employee Ordered to Repay Employer Nearly $9000

In a notable decision, the Employment Relations Authority (ERA) has ordered Tupu Suisala to repay $8,483 to Specialty Metals, a Christchurch-based metals recycling firm.

This repayment follows a software glitch that resulted in Suisala being overpaid during his employment.

The ruling underscores the importance of honouring repayment agreements and the legal remedies available to companies when such agreements are breached.

 

Background

Tupu Suisala worked at Specialty Metals from November 2013 until October 2022. The business is a family-owned company specialising in the recycling of specialist and precious metals.

In July 2022, it was discovered that a software error had led to Suisala being overpaid. The overpayments ceased once the error was identified, and Suisala agreed to repay the amount through weekly deductions of $100 from his wages.

This repayment plan was formalised in October 2022 with a written agreement stipulating that Suisala would continue the repayments even if he left the company.

However, Suisala resigned shortly after signing the agreement and did not maintain the agreed-upon payments.

 

Issues

The key issues in this case included:

  • The legality and enforceability of the repayment agreement.
  • Suisala’s obligation to repay the overpaid amount after leaving the company.
  • Specialty Metals’ right to seek recovery of the debt, including interest and costs, due to non-compliance with the repayment agreement.

 

ERA Holding

The ERA ruled in favour of Specialty Metals, ordering Suisala to repay $8483, which includes the remaining balance of the overpayment, interest, and associated costs.

The decision took into account the considerable period during which Suisala made no payments. The ERA deemed the interest of $312 reasonable, as well as the $1800 in costs, reflecting Suisala’s responsibility for debt recovery expenses outlined in the original agreement.

Suisala, who now has a new job, is required to repay the debt at a rate of $100 per week through automatic wage deductions.

 

Takeaways

For employers, this ruling highlights the necessity of clear, documented agreements when addressing overpayment issues.

For employees, it underscores the importance of fulfilling repayment obligations to avoid legal and financial consequences.

 

 

If you find yourself in a similar situation, whether as an employer or employee, please reach out to the team here at Watermark Employment Law to ensure your rights and responsibilities are clearly understood and protected.

We are proud to offer initial consultation calls free of charge.

 

Watermark Employment Law are specialist employment lawyers acting for employers and employees.