It’s not always easy to recruit fully trained staff and many employers are willing to undertake training or arrange for their staff to undertake training of various types to help them get skills and qualifications to complement their day-to-day roles.
Training is usually expensive. What if, having paid out significant sums of money for employee training, that employee hands in their notice?
Employers may seek repayment of their investment in the employee when they leave if the employment contract allows it. If there is no contractual right to allow the employer to demand repayment, the money cannot be recovered.
The recovery of training costs must be agreed in writing with the employee before any deductions take place. If you try to recoup the training costs by making deductions from the employee’s salary without prior written agreement it would be an unlawful deduction from wages.
Training recovery clauses are only enforceable if they are limited to genuine losses that the business has suffered. If it is simply a penalty, something which disproportionately punishes the employee, it won’t be enforceable.
In 2017 the Apprenticeship Levy came into force. The levy is a tax on employers with a pay bill in excess of £3m. Those employers who pay the levy are able to access funding for apprenticeships and training. However, employers are unable to recover the levy from the apprentice if either the training terminates early or the apprentice leaves employment.
You are not entitled to reclaim any apprenticeship costs from an apprentice either, even if he or she leaves the programme early. Any agreement with the apprentice that they will repay apprenticeship costs is unlawful and cannot be relied on.
For employers, it is important to have the contractual right to claw back training costs. However, you must ensure that the drafting of such repayment clauses are such that they are not deemed to be “extravagant and unconscionable”. Ensure:
- There is a sliding scale of repayments whereby an amount to be repaid by the employee reduces depending on the length of time that has passed between the completion of the course and the employee leaving employment;
- Allow the contractual right to deduct such training fees from the employees’ wages or notice pay;
- Any obligation on the employee to repay the training fees is set at a reasonable level;
- That the amount to be repaid tapers down and after a certain period of time no such repayment by the employee is required.
If you’re an employer with HR queries and problems, get in touch!
DISCLAIMER
Although every effort has been made to ensure the accuracy of the information contained in this blog, nothing herein should be construed as giving advice and no responsibility will be taken for inaccuracies or errors.
Copyright © 2023 all rights reserved. You may copy or distribute this blog as long as this copyright notice and full information about contacting the author are attached. The author is Kate Russell of Russell HR Consulting Ltd.
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