Recovering Training Costs if Employee Leaves

Peninsula Team

October 29 2013

When you invest money into training and developing your workforce, the benefits should be felt by both yourself and your employees. You will benefit from having a more able cohort of staff and your employees should feel valued and may even end up with a career enhancing qualification. It can therefore be very frustrating when an employee resigns shortly after being trained or recruited and before you have had a chance to feel the benefit of the time and money you invested in them. There is no automatic right to recoup money from an employee who has recently been trained at your expense. The only way to do this is to reserve the contractual right to do so by inserting a clause into the employee’s employment documentation to the effect that money will be recovered in certain circumstances. Alternatively, a separate agreement can be entered into before the training begins as part of the process of agreeing with the employee to fund, or partly fund, the course. It is important to obtain the agreement of the employee about the recoupment of the money because tribunals look extremely dimly on employers who deduct money from employees outside of legal boundaries and without their agreement. An employee would be able to make a claim to tribunal for an unauthorised deduction if you attempted to reclaim the money without consent. Inserting a clause into employment documentation, or signing a separate training agreement, are both ways of creating a condition of the provision of funding. It would become a binding part of the employee’s contract of employment and allows both employer and employee to know exactly where they stand should any questions arise. Usually, employers incorporate a sliding scale of recovery into training agreements because it may be unreasonable to want to recoup all of the funding given regardless of when the employee leaves the company. It is quite usual to see an employee seek to recoup 75% of the funding if the employee leaves within 6 months of finishing the course; 50% if the employee leaves within 12 months; and 25% if termination of employment occurs within 18 months. These figures are not set in stone and can be adjusted by employers. The situation may differ if it's health and safety training, and thus related to undertaking the employee’s tasks in compliance with health and safety legislation. As always, employers also need to consider any national minimum wage implications when deducting money from an employee. For any further information on this topic, please call our advice service on 0844 892 2772.  

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