Training costs agreement - resignation - dispute

RipleyG

A small addition to my previous answer: if you do refuse to pay, and they take the matter to the small claims court they are not obliged to agree to any compromise in mediation. In that case, it would progress to court. Given the situation you describe, it's likely the decision maker would require you to make repayment, which would result in a CCJ appearing on your credit record and any relevant impacts on your credit rating. 

Marcon

Jamo574922 said:

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.

1. Costs are immediately repayable in full at the time an employee's resignation takes effect.
2. You're not in a position to reject anything. You chose to resign and knew - or should have know - that you would trigger an immediate debt.

That's the cold reality. 

An 8 year repayment plan for an ex-employee who quit simply because they felt 'under utilised' is never going to appeal to an employer who probably wasn't too thrilled by your early exit. What happens next depends on how well you can negotiate with your former employer. Remember that you are 'in the wrong' here, so you need to be polite and co-operative - getting angry or frustrated, and letting it show, isn't going to help things.

The worst case scenario is that they pursue you for full payment and you get a CCJ against you, with the long-term negative impact that will have on your credit history - and of course you'd need to repay the training costs and possibly further legal/admin costs on top. Looking at your previous post you were considering a property purchase last year. If you own a property, then a charge could be imposed on that, meaning the whole outstanding debt would have to be settled at the time it is sold.

To ensure that isn't the outcome, you are going to need to come up with a better repayment plan - and I'm afraid that if necessary that could mean borrowing to pay what you owe, getting a second job (if your current employment contract permits this) or looking for a better paying job.

Marcon

BattyJ said:

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

They most certainly can, given the terms of the contract which OP signed up to. 'Reasonableness' isn't often a requirement once someone has contracted to do something on specified, agreed terms. OP voluntarily quit the job and knew what they'd signed up to in terms of repayment of training costs, so this shouldn't have come as a surprise. The fact the employer has offered to let the repay over a 12 month period is in any case pretty reasonable, given they didn't need to concede anything.