Can my Employer Recover Training Fees from me?
The government has previously been urged to investigate the practice by many employers of forcing employees to repay training costs when they leave employment. This has not been forthcoming.
In some cases those costs have run into several thousand pounds. Employers such as Capita and FDM Group have in recent years faced legal action in relation to “arbitrary” training fees being charged to employees and it has been suggested that such arrangements “trap” vulnerable employees into remaining with their employers for an extended period even where such employees would have perfectly reasonable grounds to leave employment for family or personal reasons.
Are Training Agreements Enforceable
As the law stands, it is lawful for an employer to recover training fees from an employee who leaves employment within a certain time after they have attended a training session, provided that:
- There is a clear contractual provision in the employee’s contract of employment or in a separate written agreement (such as a Training Agreement) where the employee has agreed to repay such training fees;
- That the repayment sum is not considered to be a “penalty clause”. This would involve an assessment of whether the sum recoverable is out of all proportion to any legitimate interest of the employer. As confirmed in case law, this will often involve consideration of whether the sum recoverable is “extravagant and unconscionable” in comparison with the greatest loss that could have been suffered by the employer as a result of the employee leaving employment following a training course;
- In practice, provided an employer can fully justify the costs of the relevant training course and has a graduated reduction in the amount recoverable following completion of the course, an employee is unlikely to be able to establish that such provisions are a penalty clause.
Employment Contract Penalty Clause
A typical clause in relation to the recovery of training fees may include provisions that:
- 100% of the training costs shall be repaid if an employee leaves within 12 months of completing the training course;
- 50% recovery of training fees if an employee leaves between 12 – 18 months of completing the course;
- 25% of training costs if the employee leaves between 18 – 24 months after completion of the course.
Can an Employer Deduct Training Costs
An employer will not be able to deduct training costs from an employee’s final salary unless there is a specific provision in the contract of employment or a separate written agreement authorising them to do so.
It is also important to note that an obligation to repay training costs may be unlawful on the basis that it could be a restraint of trade. This is the point that has been made by many commentators when criticising the arrangements that a number of large employers have for recovering training costs from their employees. This could act as an unlawful restriction on employees being free to leave their employer and join a new employer of their choice.
Repayment of Training Costs
If you are an employee who is being threatened by your employer with the recovery of training costs then it is important that you seek legal advice as many cases turn on their own facts.
On the other hand, if you are an employer wishing to have a clause that enables you to recover training costs from employees then it is important that you have carefully drafted clauses within your contracts of employment with staff.
How can we help
Pearson Employment Lawyers have extensive experience of assisting employees, self-employed contractors and employers in the area of recovery of training costs whether that be ensuring recovery for the employer or resisting action by an employer to recover fees from employees.Subscribe to our newsletter
Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.