Arbitrator Limits Recovery of Overpayment

Feb 12, 2007

In January 2005 the Manitoba government discovered that it had inadvertently overpaid an employee approximately $6,500 during a six-year period.

The overpayment was a result of an error made by the employer when entering the employee’s time into the computerized payroll system. The employee did not know the time was being improperly entered.

When the employee discovered the error, the government demanded that the full amount be repaid. The government claimed that pursuant to the Financial Administration Act, they were compelled to recapture the entire overpayment.

The MGEU took this matter to arbitration. Consistent with general arbitral principles, the arbitrator did not accept the government’s argument that the Financial Administration Act superseded the general labour relations law. The arbitrator agreed with the Union’s argument and limited the amount of overpayment that the government could recapture to that which had occurred during the life of the current collective agreement.

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