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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.

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    Notwithstanding the question of whether your employer can claw back the extra pay -- hypothetically or practically -- you should recognize that it does not reflect well on you to renege on your agreement, especially for reasons that are outside your employer's influence. That the agreement was never set down in writing is irrelevant in this regard. If they do try to reclaim the extra pay and you fight that, then it probably reflects poorly on you regardless of the circumstances -- the extra pay was contingent on you staying, so why should you be able to keep it if you don't stay?
    – John Bollinger
    Commented Oct 5, 2022 at 19:45
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    Won't the next employer need a reference? Will you get one?
    – Weather Vane
    Commented Oct 6, 2022 at 7:49
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    "£9/hr in arrears" - according to the official page, the minimum wage in the UK is £9.50, unless you are under 23 years old. Are you under 20? Or is your employer violating the minimum wage?
    – sleske
    Commented Oct 6, 2022 at 12:00
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    @sleske it's been £9.50 since April 2022, so it's perfectly possible OP could have started a job "a year ago" and worked "a few months" before that rate was brought in without any funny business, regardless of OP's age. Before that it was £8.91, as shown on the page you linked.
    – Chris H
    Commented Oct 6, 2022 at 12:12
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    @Davor Really? I mean, in Germany such a thing is common, and writing one is an art form.
    – Gregory Currie
    Commented Oct 7, 2022 at 12:38

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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.

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    The only question I would have about this is, is such a contract legally binding in the UK? Is such a system where a raise of your current rate is contingent on working for x years enforceable? For another example, if you agreed to work 2 years with a $2000 signing bonus, and you only worked one year, would they have legal grounds to take all $2000 back, or only a portion corresponding to the time on the contract they didnt fulfil?
    – JMac
    Commented Oct 6, 2022 at 18:32
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    I am not familiar with English employment laws, but would a work contract which the employee can't terminate even be legal? And if it isn't, would that part being unenforceable still affect the enforceable part?
    – Philipp
    Commented Oct 7, 2022 at 11:56
  • @JMac IANAL nor live in UK but I'd assume that, if all parts of such system agree to it, then yes it's binding unless the agreement was made under illegal circumnstances (i.e. blackmailing, threatening, etc.); regarding your example: if you agree to work 2 years with a $2000 signing bonus, AND the legal contract/agreement specifies that, if work relationship is terminated before those 2 years the employer has the right to recover a % of those $2000 corresponding to the time left then yes, they have the legal grounds to take half back if you work only a year
    – Josh Part
    Commented Oct 7, 2022 at 15:11
  • @Philipp I agree that a contract an employee can't terminate is illegal (and dangerous) but this isn't about termination, it's about the employer recovering back money that, as per the signed and legally binding contract says, OP wasn't entitled to AND agreed to return in such case
    – Josh Part
    Commented Oct 7, 2022 at 15:15
  • @JMac this is done all the time in USA and when done appropriately the bonus has a defined vesting period. Usually the business would advance the entire bonus or in installments as a courtesy. It is understood but rarely enforced that the unvested portion would be returned if you quit early. If the agreement says that it all vests on the same day a year later, all of it would have to be returned. Other things that work that way include Stock grants, 401K (retirement) matching, etc. Raises can also vest over time,
    – crasic
    Commented Oct 7, 2022 at 20:05
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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.

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    @wizzwizz4 "My employer asked that if he gave me a new contract with this pay increase would I agree to work there for 2 years" - the employer did give a new (verbal) contract by offering terms and having them accepted. I don't see the service period as contingent on a written contract. The only wiggle room I see is the "hypothetical" phrasing used by the OP, and if there is any daylight between "if I offered you these terms would you accept them" and "do you accept these terms".
    – Nuclear Hoagie
    Commented Oct 5, 2022 at 20:19
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    I think this comment section shows why written contracts are important, because they can remove ambiguity.
    – Gregory Currie
    Commented Oct 6, 2022 at 3:55
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    @wizzwizz4 no, that is one contract, because pay-rise and staying are contingent on one another, and your proposed 2 contracts would not satisfy as contracts to begin with: neither clause gives the agreeing party a mere peppercorn, but if taken as one contract, that is a valid exchange.
    – Trish
    Commented Oct 6, 2022 at 8:58
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    I see why you assume that pay rise and staying are contingent on one another, and that might be what OP's actual verbal agreement was, but as written in the question, that's not how the conversation went.
    – wizzwizz4
    Commented Oct 6, 2022 at 9:05
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    @Trish Following the wording in wizzwizz4s comment: No one is saying give me 2 bucks more for nothing. One contract, the one in writing, is work in exchange for an amount per hour that is two hours more than the one in current contract. The current contract is not relevant since it will be replaced or amended by the new contract. The verbal contract is getting the above in writing in exchange for staying 2 years.
    – Taemyr
    Commented Oct 6, 2022 at 10:34
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What extra pay?

Your employer is paying you the rate you agreed.

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    I think the point was that they have no documentation that was the agreed rate... the only official contract said 9, not 11.
    – nvoigt
    Commented Oct 5, 2022 at 10:58
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    @nvoigt - The employer agreed to increase the salary, as set out in the contract. The payslips the employee has are demonstrative of the increased salary. The employer has no basis with which to attempt to recoup that increased salary. The only recourse to the employer would be a small claims court, but a judge would likely throw the case out immediately.
    – GeoffAtkins
    Commented Oct 5, 2022 at 11:19
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    @nvoigt the only written contract, perhaps, but the oral agreement is also a contract.
    – phoog
    Commented Oct 5, 2022 at 16:01
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    @GeoffAtkins The employer agreed to increase the salary in exchange for the employee staying for 2 years, which they're not doing. It seems to me that the OP is trying to have it both ways, by holding the company to the verbal contract for 11, while ignoring their part of the verbal contract to stay for 2 years. I don't see this as particularly different from the company trying to claw back an up-front retention bonus after the employee fails to stay through the retention period. Of course, proving the terms of the verbal agreement in court is another matter entirely.
    – Nuclear Hoagie
    Commented Oct 5, 2022 at 17:52
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    @JörgWMittag But there is evidence for the increased salary being agreed to, since the employer paid an increased salary.
    – GeoffAtkins
    Commented Oct 6, 2022 at 5:13
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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.

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    The post says the employer will deduct it (from the final salary payment).
    – Weather Vane
    Commented Oct 5, 2022 at 11:46
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    ...if so it is the employee who would have to take it to a court, and produce evidence that the extra payment of £2/hr wasn't a clerical error that the employer subsequently rectified.
    – Weather Vane
    Commented Oct 5, 2022 at 19:35
  • @WeatherVane: That's incorrect. It is judged on the balance of probabilities. Did the employer give a raise in a tight labor market, or did the employer give a raise by accident, at a time when they must have done so to match the new minimum raise, and then overlook it for months until the employee resigned? Which scenario is more likely? I'll tell you what the lawyer will tell the company: drop it, you won't win that.
    – MSalters
    Commented Oct 6, 2022 at 16:04
  • @MSalters if the company deducts the £2/hour, the ex-employee will have to take the matter to court, or to a tribunal. They will also need evidence. I made no remark about who would win or lose. My point was that the onus will be on the employee, contrary to the assertion of this answer.
    – Weather Vane
    Commented Oct 6, 2022 at 16:09
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    @WeatherVane: Yes, but that evidence is trivial: bank statements showing the payments and the final payslip with the disputed clawback. The company needs evidence to justify that clawback, and lacking a written agreement that will be problematic. There are probably PAYE records showing 11/hr too. To refute the claim, the employer needs to prove a verbal contract that does not agree with the written evidence, all while it's hteir own fault there's no written contract. I don't think it will ever go to court, the company lawyer will stop it before that.
    – MSalters
    Commented Oct 6, 2022 at 16:19
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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.

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