New job offer, outstanding training costs and notice periods

Invertigo

Hi all,

So, thanks for reading and hopefully being able to offer some help. The situation is as below:

I started a job in summer 2016 and the employer funded a degree course starting Sept 16 for 3 years. As way of 'payment', there was an agreement made that if I should leave the business within a certain time period, I'd be liable for a percentage of the costs. That agreement was signed on 02/09/16.

I've been headhunted and offered a job at a direct competitor for a near 70% pay rise and a better package, commuting arrangements etc so it's absolutely a no brainer that I'm taking it. I've told them I may not be able to start until 06/09/21 and they can handle this. However, I'll be honest and say I've already lost any sort of interest knowing how seriously underpaid I must be to attract such a large increase from a competitor.

As per the above dates, my agreement was signed on 02/09/16 and my last working day would be 03/09/21, putting me effectively into year 6 of the agreement, albeit by a day only. This is crucial as it reduces my liabilities from 20% to 5% of the cost (which for a 3 year BSc is going to be £27k, I expect, unless the employer can claim relief)

Now my contractual notice period is 4 weeks. The contract allows the employer to make payment in lieu of notice if they choose to. My concerns are as follows:

If I were to provide an extended period of notice, could they then start playing games and decide to put me on 'temporary layoff' or some such, or would this then become grounds for constructive dismissal.

If they opt for the PILON option, surely as my notice period extends into year 6 they would have no valid claim to try and recover the year 5 cost levels?

Repayment - I assume I would have to agree a repayment settlement with them, i.e. they can't just deduct the funds from my pay?


My new employer has stated that they can get me started with a weeks notice any time from now, so I'd be more than happy to come to some sort of arrangement as waiving my notice pay and leaving immediately in exchange for my training cost liabilities to also be waived. Assumedly in this case regardless I'd be owed any outstanding holidays including carry overs from last year.

Marcon

Invertigo said:

Now my contractual notice period is 4 weeks. The contract allows the employer to make payment in lieu of notice if they choose to. My concerns are as follows:

1. If I were to provide an extended period of notice, could they then start playing games and decide to put me on 'temporary layoff' or some such, or would this then become grounds for constructive dismissal.

2. If they opt for the PILON option, surely as my notice period extends into year 6 they would have no valid claim to try and recover the year 5 cost levels?

Repayment - I assume I would have to agree a repayment settlement with them, i.e. they can't just deduct the funds from my pay?


My new employer has stated that they can get me started with a weeks notice any time from now, so I'd be more than happy to come to some sort of arrangement as waiving my notice pay and leaving immediately in exchange for my training cost liabilities to also be waived. Assumedly in this case regardless I'd be owed any outstanding holidays including carry overs from last year.

1. They could and if they do, it's isn't going to be constructive dismissal - that applies where you resign, not where they dismiss you. A temporary layoff isn't a dismissal in any case
2. Depends on the exact wording/timing
3. Depends on the agreement you signed/your contract.

Given the amount of money at stake, get yourself some proper advice from an employment lawyer and give them sight of all the relevant paperwork. Money well spent - and possibly saved.

Sounds a great opportunity and I hope it goes well for you.

Grumpy_chap

Invertigo said:

Hi all,

So, thanks for reading and hopefully being able to offer some help. The situation is as below:

I started a job in summer 2016 and the employer funded a degree course starting Sept 16 for 3 years. As way of 'payment', there was an agreement made that if I should leave the business within a certain time period, I'd be liable for a percentage of the costs. That agreement was signed on 02/09/16.

I've been headhunted and offered a job at a direct competitor for a near 70% pay rise and a better package, commuting arrangements etc so it's absolutely a no brainer that I'm taking it. I've told them I may not be able to start until 06/09/21 and they can handle this. However, I'll be honest and say I've already lost any sort of interest knowing how seriously underpaid I must be to attract such a large increase from a competitor.

As per the above dates, my agreement was signed on 02/09/16 and my last working day would be 03/09/21, putting me effectively into year 6 of the agreement, albeit by a day only. This is crucial as it reduces my liabilities from 20% to 5% of the cost (which for a 3 year BSc is going to be £27k, I expect, unless the employer can claim relief)

Now my contractual notice period is 4 weeks. The contract allows the employer to make payment in lieu of notice if they choose to. My concerns are as follows:

If I were to provide an extended period of notice, could they then start playing games and decide to put me on 'temporary layoff' or some such, or would this then become grounds for constructive dismissal.

If they opt for the PILON option, surely as my notice period extends into year 6 they would have no valid claim to try and recover the year 5 cost levels?

Repayment - I assume I would have to agree a repayment settlement with them, i.e. they can't just deduct the funds from my pay?


My new employer has stated that they can get me started with a weeks notice any time from now, so I'd be more than happy to come to some sort of arrangement as waiving my notice pay and leaving immediately in exchange for my training cost liabilities to also be waived. Assumedly in this case regardless I'd be owed any outstanding holidays including carry overs from last year.

This is critical to know how much you could be on the hook for - is that written in the original paperwork somewhere?

Why are you considering giving any longer than the contractual notice?  Just give the minimum notice you need to and it is up to the Employer how they chose to manage that period.  Once you have given the minimum notice, the Employer cannot under-cut that.  The Employer may require you to take some annual leave in the notice period rather than PILON, or may require you to work the notice period.

It is quite common that any money due (5% of £27k = £1.35k?) will be deducted from the final pay packet (which should also include holiday pay, if any).

I very much doubt the Employer would swap your notice pay for the training cost liabilities - what is in it for them to do that?

oh_really

Is your employer content for you to hop off to a competitor? Any restrictive covenants to deal with?

Invertigo

So what's the possibility of being stuck on unpaid temporary layoff as soon as my notice goes in, or PILON with them then claiming the contract has ended early and thus in Y5 and not Y6, these are the sort of issues I'm going over.

No restrictive covenants, all restrictions are while employed only with exception to taking confidential information with me.

Undervalued

Invertigo said:

Hi all,

So, thanks for reading and hopefully being able to offer some help. The situation is as below:

I started a job in summer 2016 and the employer funded a degree course starting Sept 16 for 3 years. As way of 'payment', there was an agreement made that if I should leave the business within a certain time period, I'd be liable for a percentage of the costs. That agreement was signed on 02/09/16.

I've been headhunted and offered a job at a direct competitor for a near 70% pay rise and a better package, commuting arrangements etc so it's absolutely a no brainer that I'm taking it. I've told them I may not be able to start until 06/09/21 and they can handle this. However, I'll be honest and say I've already lost any sort of interest knowing how seriously underpaid I must be to attract such a large increase from a competitor.

As per the above dates, my agreement was signed on 02/09/16 and my last working day would be 03/09/21, putting me effectively into year 6 of the agreement, albeit by a day only. This is crucial as it reduces my liabilities from 20% to 5% of the cost (which for a 3 year BSc is going to be £27k, I expect, unless the employer can claim relief)

Now my contractual notice period is 4 weeks. The contract allows the employer to make payment in lieu of notice if they choose to. My concerns are as follows:

If I were to provide an extended period of notice, could they then start playing games and decide to put me on 'temporary layoff' or some such, or would this then become grounds for constructive dismissal.

If they opt for the PILON option, surely as my notice period extends into year 6 they would have no valid claim to try and recover the year 5 cost levels?

Repayment - I assume I would have to agree a repayment settlement with them, i.e. they can't just deduct the funds from my pay?


My new employer has stated that they can get me started with a weeks notice any time from now, so I'd be more than happy to come to some sort of arrangement as waiving my notice pay and leaving immediately in exchange for my training cost liabilities to also be waived. Assumedly in this case regardless I'd be owed any outstanding holidays including carry overs from last year.

If they opt for payment in lieu of notice your employment ends immediately. Obviously you get the money for the notice they could have required you to work but you lose any other benefit that would have been attached to have actually remained employed for those four weeks. If it was not in your contract then they would, technically, have been in breach of contract by paying PILON and yours in one of the few situations where that could have been relevant. However if, as you say, they are contractually allowed to opt for PILON then there is nothing you can do other than delay your resignation.


Repayment - yes they can! Even if they were not legally entitled to do so (although they probably are) they could still do it and leave you fighting to get the money back if some or all of it were not owed. Or, if it were the correct amount,  you would have an even trickier claim for any losses you suffered as a result.

Unless the agreement says so, you have no right to "easy payment terms". So the amount would be due immediately on leaving in any case.

Thrugelmir

Invertigo said:

So what's the possibility of being stuck on unpaid temporary layoff as soon as my notice goes in, or PILON with them then claiming the contract has ended early and thus in Y5 and not Y6, these are the sort of issues I'm going over.

You are overthinking matters. Serve your 3 years and let matters handle themselves. Employers have better things to do with their time. 

TBagpuss

As Undervalued says, if they exercise the right on the contract to give you PILON then your employment would end immediately, so your employment would end in Y5 not Y6.
The safest thing to do therefore would be to hand in your notice on 2nd September which would ensure thst your employment ended on or after 3rd September. 
Since you have a formal agreement in place to repay your degree costs (or a proportion of them) they are entitled to deduct the debt from your final pay.

You say that you are underpaid but your current employers have funded your training to the tune of £27Kwhich is not peanuts. 

It sounds as though you will be getting that for £1,350 (if your leave in Y6) or £5,400 if you leave in Y5 -  not to mention the saving of interest on a student loan had to paid for the degree yourself - presumably you also have time to study - it doesn't sound as though you have been treated badly by your employer so while it's understandable that you want to to move on, it's also reasonable and appropriate to make sure that you continue to do the job you are being paid for, to the best of your ability, while you remain an employee.

If you can't manage that, then hand your notice in now, pay the extra £4K and move on,

Invertigo

Well, as another avenue I've spoken to the recruitment company and they're going to see if there's a way to sort out effectively a signing bonus with the new company, with a 12-24 month commitment tied to it depending on the value. From what they've told me the company has been looking for a candidate for 6 months now and want me started as soon as they can get me, so might be something.

Might leave me a bit of freedom to negotiate then i.e. I'll leave now with no notice pay and repay 10%, which is pretty much cost-neutral then to the current employer.

In a similar vein, I assume any deduction for repayment of training costs would be post-tax and not pre-tax etc, right?

Manxman_in_exile

Invertigo said:

...

I've been headhunted and offered a job at a direct competitor for a near 70% pay rise and a better package, commuting arrangements etc so it's absolutely a no brainer that I'm taking it. I've told them I may not be able to start until 06/09/21 and they can handle this. However, I'll be honest and say I've already lost any sort of interest knowing how seriously underpaid I must be to attract such a large increase from a competitor.

...

So you are weighing up the certainty of what seems like a dream job package (including a 70% pay rise) against the possibility of saving £4k?

Unless you or your recruitment agency can persuade the new employer to defer your start date sufficiently that you get into the position of only having to repay 5% of the training costs, I'd just resign myself to probably having to pay the £4k.  That, if it comes to it, is the real no-brainer.

So if your new employer can't (or won't) delay your start date until early October, allowing you to put your notice in in September year 6, just bite the bullet.  As TBagpuss has said, you will still have benefited from having your degree funded to the extent of over £20k in fees.

I'd also be a bit reluctant to appear be messing about both the recruiters and the new employer - particularly if they seem to be keen to get someone started.  (It might also raise question marks about your loyalty to your new employer if you go to great lengths to save £4k owed to your old employer when they funded a free degree for you).

And are you sure there are no restrictions in your contract about working for a competitor after you leave your current employer?

Undervalued

Invertigo said:

Well, as another avenue I've spoken to the recruitment company and they're going to see if there's a way to sort out effectively a signing bonus with the new company, with a 12-24 month commitment tied to it depending on the value. From what they've told me the company has been looking for a candidate for 6 months now and want me started as soon as they can get me, so might be something.

Might leave me a bit of freedom to negotiate then i.e. I'll leave now with no notice pay and repay 10%, which is pretty much cost-neutral then to the current employer.

In a similar vein, I assume any deduction for repayment of training costs would be post-tax and not pre-tax etc, right?

Why would your current employer negotiate? Maybe they will but they could just stick rigidly to the contract.

You should not leave without notice. If you do, you are in breach of contract and potentially they could sue you for any unavoidable losses that causes. Also they could dismiss you during the notice period which may trigger other clauses about repayment of the training fees?