Debt to a former employer

BoroPhil

Not really sure where to put this, but will try here.

Basically I changed employer earlier in the year, I owe my previous employer about £2k for professional training I received while I was there.

I didn't actually sign any agreement to pay this back when I started the training (I was supposed to) but I'm happy to pay it back.

I've offered £50/month and they have come back and said either £190/month for 12 months or £100/month for 24 months which includes 4% interest (£100 ish is the charge)

Now I really don't want to do either, I'm quite prepared to play hard ball with them and I assume (perhaps wrongly) that they will accept an offer from me (I might up it a bit) rather than go down a debt collection route or whatever.

Would anyone know under what legislation (if any) they are able to charge interest on this?

Any thoughts welcome.

YorkshireBoy

BoroPhil wrote: »

Any thoughts welcome.

I would have thought they'd need a consumer credit licence (from the OFT?) in order to provide a credit agreement...which is what it would be if they charged interest?

I'd be getting some (free!) legal advice from an employment law specialist. If you can't get it through any insurances you have then you can generally get a free initial consultation (try a web search or even yellow pages). At least that's what I did when I had a delicate redundancy situation a few years ago.

Maybe the employment board would have been a better place for your question?...

http://forums.moneysavingexpert.com/forumdisplay.php?f=141

grumbler

YorkshireBoy wrote: »

I would have thought they'd need a consumer credit licence (from the OFT?) in order to provide a credit agreement...which is what it would be if they charged interest?...

Why? They don't offer any loan and want immediate payment. As the OP refuses to pay, can't they add the interest like any company or a person can do for the money owed to them, but not paid on time?

If so, the only question is whether they can prove that the money is really owed and has to be repaid immediately if their employee leaves.

matttye

Get some legal advice first, but if you have no legal obligation to pay the money I would be writing to them saying that as no formal agreement has been signed, you are not legally obliged to pay and, as a gesture of goodwill, you will pay them at the aforementioned £50 per month.

If they give you too much aggro over it and you're not obliged to pay, don't.

YorkshireBoy

grumbler wrote: »

As the OP refuses to pay, can't they add the interest like any company or a person can do for the money owed to them, but not paid on time?

You're referring to the "The Late Payment of Commercial Debts (Interest) Act"? Not sure that applies to an employer/employee relationship?

Anyway, that would form part of the contract to supply goods and/or services (isn't it mentioned on quotes, delivery notes, etc on B2B transactions?).

There doesn't appear to be a contract in place here, or at least not one agreed/recorded/signed for?

MPH80

There doesn't appear to be a contract in place here, or at least not one agreed/recorded/signed for?

True - but if they can produce an email that says 'We'll pay providing you pay it back if you leave within x' and then he took the training under their payment - he may have been deemed to accept the offer without having signed.

Whether they can be bothered to enforce it for £2k is up to them!

BoroPhil

Thanks for the responses. No, I'm pretty certain there wouldn't be any sort of trail. They just forgot to ask me; I wasn't even aware of it until after I'd started my training - it was only from talking to others that I realised they had made a mistake.

happy_bunny_2

I had this before with a big company. They are supposed to get you to sign to pay all back with in 12 months, x within 24 months. I didn't and when I left they just said ah well and didn't chase it, meaning they probably thought they had no legal grounds to.

Unless its in your contract, there is an email trail you implicitly accepted or you signed to agree to it I suspect they are stuffed. Especially as you say you were not aware until after starting training.

Can't see how they can charge interest if its not documented and you agreed to it.

I'm no legal expert mind, so if you have the means I would check. You a member of a trade union? They would also advise.

alanq

Having already offered to pay by instalments it is too late to deny that the money is owed (in my inexpert opinion) . All that is left to negotiate is the rate at which the debt is to be repaid and any interest due.

Is the 4% charge being required on the total owed? If so then, by paying by instalments, on average you will owe only half the total amount (approx) so the effective charge would be 8%. If I recall correctly that is the interest rate applied by law for the late payment of a debt. e.g. NS&I miscalculated the interest due on my maturing savings certificate. When it noticed its mistake it paid me the difference + 8% interest on the underpayment.