Training costs agreement - resignation - dispute

Jamo574922

Hello everyone,

I don’t post often, so I’ll keep this as brief as possible.

Background:

I resigned from my previous company on 25th February 2021. At that time, I had signed a training cost agreement which makes me responsible for repaying 100% of the training cost—amounting to £13,000. For reference, the agreement states:

“This training will end on August 2024 and if I leave my employment (subject to the provisions below), I undertake to refund to the Company all, or a proportion of, the costs incurred based on the following scale:

• Before the course begins (after fees have been paid): 100% of the remaining liability following attempts to recover any costs from the training provider

• At any point during the course, or within 12 months after course completion: 100%

• More than 12 months but less than 24 months after completion: 75%

• More than 24 months but less than 36 months after completion: 50%

No repayment is necessary if employment terminates due to compulsory redundancy; however, the agreement applies in cases of voluntary redundancy as well.

If I fail to pay, I agree that the Company has the right, as an express term of my employment contract, to deduct any outstanding amount from my salary or any other payments due upon termination, in accordance with current legislation.”

Before leaving, I evaluated my finances and proposed an eight-year repayment plan at around £140 per month. I am the sole earner supporting a household with three young children. This value was derived after reviewing my finances and is a significant percentage of my disposable income  

After my departure, my previous employer deducted my entire final salary, leaving me with immediate financial hardship. They then issued a formal letter rejecting my proposal and demanding full repayment within one year. With my final salary deducted, this means I’d need to pay approximately £9,000 in one year—or about £700 per month.

Questions:

1. Since neither my employment contract nor the training cost agreement clearly outlines repayment terms after employment termination, what is generally understood about an employee’s responsibility for repaying training costs?

2. Given that I cannot afford the proposed repayment schedule without compromising my other financial obligations—and having expressed my willingness to repay the training cost—should I reject their demand as they rejected my proposal? Furthermore, if we can’t reach an agreement, what potential escalations might occur?

Any advice or insights from the community would be greatly appreciated.

Jamo574922

Sorry resignation was 21st February 2025. Can’t seem to edit post. 

BattyJ

Being no expert……
I would have thought that they were within their rights with regards to the deductions from your final salary.

I would have thought though that the demands thereafter are unreasonable and you would have grounds to challenge them. The contract makes no mention of outstanding debts and you can prove your financial commitment. As such you have fulfilled the terms of the contract and their demands are unreasonable. I would reject their offer (that is all it is….an offer. They cannot demand)

I would speak to CAB or a solicitor, get the free half hour they usually offer to see exactly where you stand.

Good luck

RipleyG

The type of training matters, but yes, the general understanding is that the debt becomes immediately repayable on departure. Their specific wording also makes it clear in this specific case. See ACAS link here for type of training: https://www.acas.org.uk/final-pay-when-someone-leaves-a-job/deductions-for-training-courses

You could try and refuse to pay it, but their rejection of your request to pay over 8 years doesn't give you any grounds to do so.

If you don't pay, they will have to decide whether to pursue the debt. At a few hundred pounds it's highly unlikely - the cost & effort to do so would be more than the money they'd get back. However, at almost £10,000 the debt is large enough to make it worth the £455 small claims court cost.

If they do that, and you refuse to pay once receiving your court letter, the court will suggest mediation. That may be your best chance at attempting to negotiate a settlement. Bear in mind that both parties have to agree to the settlement, and they may counterpropose with a reduced amount rather than accept a payment plan you could default on.

You could attempt to write them a letter explaining your financial position and see what happens. I'd advise not threatening to withhold payment, which might prompt immediate action, rather a polite  'is there a compromise' approach.

LightFlare

You say that the course cost 13,000 and they withheld all your final pay leaving a balance outstanding of 9,000. 

Can we assume that your monthly net pay is therefore 4,000 ?

If so, I can see why they aren’t willing to entertain repayment of 140 a month.

GrumpyDil

 LightFlare said:

You say that the course cost 13,000 and they withheld all your final pay leaving a balance outstanding of 9,000. 

Can we assume that your monthly net pay is therefore 4,000 ?

If so, I can see why they aren’t willing to entertain repayment of 140 a month.

Doesn't that depend upon OP'S current earnings, although they aren't a finance company and one might wonder if OP joined to get the training and then moved on after that investment.

Either way, I'd certainly try and negotiate and agreement over repayment terms.

maisie_cat

In my experience training clawback has always been repayable on leaving.
It used to be common for a new employer to cover it as a welcome bonus or salary negotiation or the new salary simply made the jump worthwhile.
Assuming that your new qualification should have led to new job with a higher salary is the £700 a month not doable?

Jamo574922

LightFlare said:

You say that the course cost 13,000 and they withheld all your final pay leaving a balance outstanding of 9,000. 

Can we assume that your monthly net pay is therefore 4,000 ?

If so, I can see why they aren’t willing to entertain repayment of 140 a month.

Hi LightFlare,

As it was salary reduction before payment that was gross pay including holiday entitlement that I did not take. My net pay (take-home) is ~£3200.

maisie_cat said:

In my experience training clawback has always been repayable on leaving.
It used to be common for a new employer to cover it as a welcome bonus or salary negotiation or the new salary simply made the jump worthwhile.
Assuming that your new qualification should have led to new job with a higher salary is the £700 a month not doable?

Hi Maisie,

This is an interest point and I’m sat from the perspective of personal affordability, which I understand my previous employer may/should not have to consider. That said for your reference my new roles pays less than the previous, I left as I was being underutilised. As stated in the original post due to personal circumstances my disposable income is around £180-£200 per month. 

I’m not sure if this information changes anything? 

haze23

OP, perhaps somewhat Devil's Advocate but it may help in deciding how to respond to your previous employer.

Your proposal looks to effectively request an eight year interest free loan. You can see why that wouldn't be appealing for the company both from a financial position and from a time period of having this outstanding. Assuming your resignation was along the lines of just looking to move on, tbh how to repay this known obligation should have formed part of the decision whether to leave. Perhaps naive to assume the company would agree to your long term proposal without any prior discussion?

If you leave of your own accord knowing that repayments are due (albeit with uncertainty on the terms), the company is not going to be overly interested in your position and will have expected you to have considered this. It's your problem to repay on a reasonable timescale; not sure affordability is a strong argument here. It's not meant to be harsh, just another perspective that the company is likely to take. Pragmatically, you may need to agree to a realistic time period and take a loan to cover the payments if necessary. Obviously negotiate the best you can for yourself but probably best to try to amicably agree a compromise to the current proposed positions.

Emmia

Jamo574922 said:

LightFlare said:

You say that the course cost 13,000 and they withheld all your final pay leaving a balance outstanding of 9,000. 

Can we assume that your monthly net pay is therefore 4,000 ?

If so, I can see why they aren’t willing to entertain repayment of 140 a month.

Hi LightFlare,

As it was salary reduction before payment that was gross pay including holiday entitlement that I did not take. My net pay (take-home) is ~£3200.

maisie_cat said:

In my experience training clawback has always been repayable on leaving.
It used to be common for a new employer to cover it as a welcome bonus or salary negotiation or the new salary simply made the jump worthwhile.
Assuming that your new qualification should have led to new job with a higher salary is the £700 a month not doable?

Hi Maisie,

This is an interest point and I’m sat from the perspective of personal affordability, which I understand my previous employer may/should not have to consider. That said for your reference my new roles pays less than the previous, I left as I was being underutilised. As stated in the original post due to personal circumstances my disposable income is around £180-£200 per month. 

I’m not sure if this information changes anything? 

You've chosen to leave for a less well paid role as you were underutilised - so you were aware of the need to repay training costs / stay with the employer who paid for the training for a period.

It's a bit late now, but you should have factored in repayment before quitting. Taking your entire last month's salary and then pursuing you for the rest legally wouldn't be surprising as an option your previous employer would take.

Taking a less well paying job, isn't the problem of the your ex-employer 

Tucosalamanca

I'm struggling to follow.

Employer pays a significant sum to train you.
Employer doesn't use your new skills, you feel underutilised and leave.
You have now taken a lower paid job.

Is the new role using your upgraded skills, in which case it would appear that you're being underpaid?

Or is the new lower paying role also underutilising your skills, in which case why leave the original role?