Trainee Study Contracts

heppell2k

I was just wondering if anyone knew how legal exit fees are in relation to study contracts. I've basically been working for a firm for three years, and over that time there have been !!!! ups, including recently my annual subscription fee with the Association not being paid for 6 months, leaving me with an overdue bill against my name.
I've been offered another post, and its mainly for the close proximity and reduction in travelling that I have accepted it. However there is a £3k exit fee to get me out of my study contract.
My question is, does anyone know whether these are 'legal' and whether there is anyway of not being made to make this payment.
Many thanks

NiceGuyEddie_2

The ICAEW website includes the following

Our lawyers have advised against including a clause in the standard training agreement requesting the student to repay training fees if the agreement is terminated. This type of clause may not be enforceable as a court of law could rule that it restricts the ability of the student to change their employment.

however that doesn't mean that repayment/exit fees can't legally be recovered.

Before going down the expensive and stressful legal route, what action have you taken to resolve the issues with your employers? And how long is left in your training contract until you're free to leave without penalty?

heppell2k

Thank you for your response

I have over 18 months of the contract left in order to not pay anything. However I have been in the contract for three and a half years. I haven't actually attempted to resolve this, as I'm handing my notice in tomorrow :eek: which will be interesting.

I have a feeling that the company will claim it or attempt to as they have tried previously with other 'students' who have left.

I understand that they have paid for my training thats probably cost 3k a year, however in relation to other organisations in the sector, the pay is no where near for the same level. Considering that the expectation at signing the original contract was that the pay would increase as exams are passed would be in line with others.

MoneySavingUser

Even though the ICAEW website says that - you signed a contract agreeing to let them take the study costs back if you left

It would cost you a lot more than £3k to take legal action plus if it was in the open that you started legal proceedings against your employer it might discourage other firms from employing you in the future I am afraid

So basically either pay up or stay in the job unfortunately

SarEl

It depends on what the contrract is actually for. It is unlawful to charge someone an exit fee - that is a cost to resign. But it is not unlawful to expect a full or partial refund of specified training costs incurred by the employer for training provided by an external agency (like a university or professional training agency) provided that the repayment is "timely". In that respect, there are generally expected to be reasonable time limits to the amount of time after completing the training after which no repayment is due, and/or a reducing percentage of repayment expected over a reasonable period.

donquine

heppell2k wrote: »

My question is, does anyone know whether these are 'legal' and whether there is anyway of not being made to make this payment.

If it wasn't legal, the Big 4 wouldn't have the same clause and they do. Leave within your contract and the training costs are clawed back; leave once qualified and nothing to repay.

In practice, costs aren't pursued where trainees change career. However, if they stay in accountancy, particularly if they leave to work for a nearby competitor...

There's a reason why few people leave mid training contract and there's such a high turnover on qualification.

one_bill_at_a_time

in my experience (Big4) people leaving before the end of their contract could negotiate the exit payments. They weren't asked for from all individuals (even those staying in accountancy).

Worth trying to negotiate it or at least the payment terms if they do decide to claw them back. Your new employer may also be willing to take them on...