Repayment of “Training” Costs - Enforceable?

Skuk

Approximately 2 years ago my employer was informed that they require employees to be in the process of getting or have already obtained a certain qualification for staff to be able to deliver the company’s main service. 

I was asked to sign a letter to agree to this and then re sign another one a few months ago which has some changes to wording. I was not given an alternative to signing either but it was implied that it would be detrimental to the business if we did not do it. In fact I was asked multiple times over a 6 week span via email asking when I was going to sign. 

Now that I am leaving, they have now asked me to repay what they have paid for this qualification so far (2k+) which the letter I signed sort of has in its terms.  However I have gained no benefit from this as it is portfolio based where you write entires based on what I do in my job over 4 years- not training in anything new or beneficial. It is also something I cannot continue now that I am leaving as it is very specific to this role. 

The company has gained around £50k+ from solely me alone being able to deliver this service. They also did not provide me with the study leave the appropriate supervision included in the terms of the letter.

I feel as though I am being penalised for leaving as I am the one at a loss so any advice on where I stand with this or if it is worth putting an argument together would be helpful. 

TIA

Savvy_Sue

Skuk said:

Now that I am leaving, they have now asked me to repay what they have paid for this qualification so far (2k+) which the letter I signed sort of has in its terms.  

Tell us precisely what the terms say, and someone might be prepared to offer an opinion. Until then, it depends - what exactly did you sign?

Skuk

Savvy_Sue said:

Skuk said:

Now that I am leaving, they have now asked me to repay what they have paid for this qualification so far (2k+) which the letter I signed sort of has in its terms.  

Tell us precisely what the terms say, and someone might be prepared to offer an opinion. Until then, it depends - what exactly did you sign?

The letter is titled “Agreement to commence XXX qualification”

The term regarded repayment is “if you cease employment before you attend any XXX Training or before you complete your XXX Training but we have already paid, or incurred liability for, Costs, 100% of the Costs or 100% of such proportion of the Costs that we cannot recover from the course provider shall be repaid;”

This is from the agreement signed over a year into the training

Thanks  

Skuk

The reason I believe I have an argument is due to the company not being at a loss due to the monies they gained from the service that the qualification requires and actually being in significant financial gain.

Does having signed the agreement negate this? 

Other organisations that fund similar qualifications seem to state that the funds should be repaid if the employee is to continue to complete after leaving the roles and is not to be repaid if they withdraw from the training as I have done which I see as fair.  

Undervalued

To recover training costs there needs to be a signed agreement in place (which it seems there is).

Even then the amount recovered must be reasonable and proportionate. Normally there is a sliding scale so, for example, if it was a two year clause and you resigned after one year you would pay half. The argument that they have suffered no actual loss (if true) may also be a possible way out.

The real problem with these sort of disputes is that the employer can simply deduct the full amount from your final pay (right down to zero), leaving you to take legal action to recover the money if you believe you have a case. There is no effective way to prevent this from happening.

Skuk

Undervalued said:

To recover training costs there needs to be a signed agreement in place (which it seems there is).

Even then the amount recovered must be reasonable and proportionate. Normally there is a sliding scale so, for example, if it was a two year clause and you resigned after one year you would pay half. The argument that they have suffered no actual loss (if true) may also be a possible way out.

The real problem with these sort of disputes is that the employer can simply deduct the full amount from your final pay (right down to zero), leaving you to take legal action to recover the money if you believe you have a case. There is no effective way to prevent this from happening.

Thank you for your comment. There is no sliding scale in relation to pre-completion but there is one that would apply in a few years after completion. 

Luckily the funds are not being taken from my final pay (it wouldn’t be enough) and a payment plan is being discussed. 

steampowered

How long have you been doing this training - it sounds like it has gone on for 2 years?

The legal position is that an agreement to repay training costs is generally legally enforceable.

However, you can often argue that it is not legally enforceable on the following grounds:
- That the agreement is a "penalty". Penalty clauses in a contract are not enforceable. These are clauses which penalise you for doing something in a manner which is disproportionate to the loss the employer has suffered. That is why most repayment clauses are drafted as a "sliding scale" - to try and show there is proportion to it. As it sounds like the training started a long time ago, and the employer has benefited, you could say the lack of sliding scale makes it a penalty.

- That the agreement is a "restraint of trade". A repayment clause which is so severe as to stop you moving job will be unlawful as a restraint of trade.

Sounds very 50/50 to me. In reality, the employer will probably deduct the training costs from your last pay packet, leaving you to bring an Employment Tribunal claim or small claims track court claim if you wish.

elsien

Are you really expected to take 4 years to complete it?  That’s very unusual for something portfolio based. 

Skuk

steampowered said:

How long have you been doing this training - it sounds like it has gone on for 2 years?

The legal position is that an agreement to repay training costs is generally legally enforceable.

However, you can often argue that it is not legally enforceable on the following grounds:
- That the agreement is a "penalty". Penalty clauses in a contract are not enforceable. These are clauses which penalise you for doing something in a manner which is disproportionate to the loss the employer has suffered. That is why most repayment clauses are drafted as a "sliding scale" - to try and show there is proportion to it. As it sounds like the training started a long time ago, and the employer has benefited, you could say the lack of sliding scale makes it a penalty.

- That the agreement is a "restraint of trade". A repayment clause which is so severe as to stop you moving job will be unlawful as a restraint of trade.

Sounds very 50/50 to me. In reality, the employer will probably deduct the training costs from your last pay packet, leaving you to bring an Employment Tribunal claim or small claims track court claim if you wish.

Thank you very much for explaining the penalty clause and restraint of trade. 

Yes coming up to 2 years but as I have not completed the qualification the sliding scale in this agreement hasn’t come into play.  The British Psychological Society require you to be on the training for at least 2/3 but usually takes much longer to complete- the average is around 4/5 years. There are no formal sort of deadlines, no actual training but you do need to do significant amounts of independent research. 

Skuk

elsien said:

Are you really expected to take 4 years to complete it?  That’s very unusual for something portfolio based. 

Yes, it requires meeting competencies and writing entries to demonstrate this as well as a research project. 

steampowered

Skuk said:

Yes coming up to 2 years but as I have not completed the qualification the sliding scale in this agreement hasn’t come into play.  The British Psychological Society require you to be on the training for at least 2/3 but usually takes much longer to complete- the average is around 4/5 years. There are no formal sort of deadlines, no actual training but you do need to do significant amounts of independent research. 

That's a long time! It sounds like the employer has already benefited from this training. I think you have a good argument for saying that the sliding scale should already have started. Especially for costs the employer paid at the start of the course 2 years ago. If a judge agrees that would make the whole repayment provision invalid.

That legal argument is very much 50/50 and to be honest I'm not sure a judge would side with you, but it is at least a proper legal argument, and could be worth a go if you fancied challenging this. It could be a point worth making to the employer to try and agree a reduction in the costs payable? Of course if you do end up suing your ex-employer you won't get a good reference.