Recouping the cost of training

It is often cited that as an employer, your most important asset is your employees, and businesses invest a lot of money in training and developing their workforces to make sure that their employees are up to date and capable of carrying out their duties efficiently. Often the skills that you are equipping them with and the training you provide will enhance their careers and make them more attractive candidates in an increasingly buoyant job market.

Is there anything you can do to recoup training costs?
There is no automatic right for employers to recoup these costs and if there is no agreement in place between you and your employee then any deduction from their wages in respect of training costs will be an unauthorised deduction.

In order to avoid potential claims for unauthorised deductions, we recommend that you:

1. Ensure that you have a contractual right to claw back. Any such contractual clause should be drafted properly and make it clear how the costs may be deducted, for example during the employee’s notice period or from any payment in lieu of notice.
2. If there is no clause in the employee’s contract, ask them to enter into a separate agreement before they undertake the relevant training course. It sounds obvious, but do make sure it is signed by the employee!
3. It is important that the figure you ask the employee to be repay in the event that they leave, is a genuine estimate of your loss and not an arbitrary sum. If it is a not a true reflection of the actual fees you have paid, it could be seen as a penalty clause and not enforceable. For that reason, a sliding scale is often used which states, for example, 75% of the course costs will be refunded if the employee leaves within 6 months of completing the training, 50% within 12 months and so on.
4. Make sure the repayment period is not to long that it might be indirectly discriminatory on the ground of sex, age or disability (as there is a possible argument that female, older or disabled workers are less able to remain in continuous employment for longer periods of time).
5. If you do have concerns about your employees leaving you for a competitor, it is essential to regularly review the restrictive covenants in their contracts and ensure that your business is adequately protected, particularly if you have staff whose roles have changed due to reorganisations or promotions.

This content is correct at time of publication