Pete’s story
I resigned from my job last month and I am now 1 month into my 3 months notice period.
This week I received a letter from HR stating I owe the company £600 to cover training costs.
I’ve never signed a study support agreement. I’ve also never been told how much the training costs were.
HR are telling me that if I don’t pay it, they are going to deduct the £600 from my final salary. Can they do this?
Thanks. Pete.
One of our solicitors’ comments on the issues Pete has raised:
Often, employers have spent significant amounts of money on training and upskilling their employees for various reasons, such as improving retention and enhancing employee’s wellbeing. It is tempting and very common for employers to demand repayment of training fees when an employee leaves the company.
Whether such demands are enforceable depends on the contractual arrangement.
If Pete has a contract of employment that stipulates for the deduction of training costs upon leaving, then his employer can demand repayment of his training costs.
However, if Pete’s contract does not include any provisions regarding deductions, and there was no agreement concerning repayments, then his employer should not be requesting repayment of the training costs.
Pete’s employer can attempt to make the deduction anyway, but this does come with some risk for them in relation to an unlawful deduction from wages claim and/or a claim for non-payment of National Minimum wage if the deduction took Pete’s hourly rate below National Minimum Wage. Pete could have grounds to make a tribunal claim against them.
Even if the employer has provided for repayment of training within Pete’s contract of employment, the presence of such a clause does not automatically mean that the employer is able to rely on it.
In past cases, these clauses have been found in several instances to constitute a penalty clause, which is a clause that disproportionately punishes a party to a contract for a breach of that same contract. The consequence of a clause being found to be a penalty is that the clause cannot be enforced, and the money cannot be recovered.
If this scenario was to materialise, Pete should take further legal advice in relation to his options.
Ultimately, what the employer can do will depend upon the contract of employment and the risk that the employer is comfortable taking.
What can employers can do to mitigate this scenario happening?
- Draft repayment clauses that are reasonable and reflect the employees service at the company;
- Include a specific clause within the employee’s contract allowing a deduction from wages for repayment of training fees;
- It may be worth employers considering whether a separate training agreement would be more beneficial.
If you have a question relating to Employment Law, whether you are an employee or an employer, we’d be more than happy to help. Please feel free to contact us using the details on our website.
Note: The guidance provided above is tailored to the specific scenario and is relevant based on the information available at the time this guidance was provided. It is important to note that individual circumstances may vary, and the advice given may not cover all potential factors or changes that could impact the situation. Before acting on any guidance in this blog, it is recommended to seek legal counsel or professional advice for a comprehensive assessment of your specific case.
