Can my employer recover training fees from me?
The government has been urged to investigate the practice by many employers of forcing employees to repay training costs when they leave employment. In some cases such costs have run into several thousand pounds. Employers such as Capita and FDM Group are facing legal action in relation to what is claimed to be “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 of time even where such employees would have perfectly reasonable grounds to leave employment for family or personal reasons.
So what is the current legal position concerning an employer’s right to recover training fees from employees?
As the law presently stands, it is lawful for an employer to recover training fees from an employee who leaves employment within a certain time period 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 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. 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. 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, reducing to 50% recovery if an employee leaves between 12 – 18 months of completing the course and 25% if the employee leaves between 18 – 24 months after completion of the course.
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 recently when criticising the arrangements that Capita have for recovering many thousands of pounds in training costs from their employees. In reality this could act as an unlawful restriction on employees being free to leave their employer and join a new employer of their choice.
It is evident that the law in this area is complex. 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. On the other hand, 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.
Linder Myers have extensive experience of assisting both employers and employees in the area of recovery of training costs.Find out more about our Employment department