As others have posted "they all do that" but the most likely culprit for the chain riding on top of the sprocket is the rear derailleur, my old Carlton used to be a Ba$tud for doing it with the old Simplex (I think) mech. After it got run over by a lorry I fitted a 'New 105' rear mech which cured the problem until I 'serviced' the thing and re-fitted the jockey wheels upside down.
It turned out that the sideways 'float' on the top wheel is what prevents the chain from being able to sit on top of the sprocket instead of engaging with the teeth.
Oh and BTW anyone who thinks a bent 'axle' can cause oscillation is talking bull, the 'axle' doesn't rotate (well I hope it doesn't) so fitting a new wheel won't be needed but a different rear mech might help mitigate the problem.