Legal Updates

An employee is not entitled to continue receiving excessive wages erroneously paid after the mistake was discovered

February 27, 2020
Print

The Ministry of Education paid a teacher salary above the amount required due to mistakenly believe that she has a master's degree. After discovering the mistake, the teacher demanded to continue receiving the excess salary contending that the past behavior creates an agreement.
The Labor Court held that the teacher is to repay part of the excess salary and is not entitled to continue receiving the excess amounts. Restitution of excess payment by the employer is reviewed utilizing several main tests: who is responsible for the mistake, how much the employee relied on the excess payment and additional ancillary tests. Here, the Ministry of Education was the sole fault for the mistake and the teacher believed that she is really entitled to the payment received. Nevertheless, the teacher was ordered to repay part of the amount wrongly received, due to the relatively short (here 3.5 years) period in which the mistake was made and because she did not rely on one-off payments paid as salary differentials. The teacher is not entitled to continue receiving the excess salary because payments wrongly made will not become a binding practice even if paid for several years.