Repayment of Training Costs
15 June 2016
It’s a cliché, but it’s true… employees really are the most important asset within a business. It is therefore vital to look after your staff and develop them where appropriate. This brings benefits to the employees themselves, but it can also bring huge benefits to the Company. Money spent prudently on training for your staff can bring significant financial dividends further down the line. However, if there is nothing to stop an employee walking away once their training is complete, you would be forgiven for thinking that this risk makes paying for course fees an unattractive proposition.
A ‘repayment of training costs’ agreement can help mitigate the risk. This could form a stand-alone agreement or can form part of an employee’s contract of employment. Essentially it provides that, should an employee leave within a defined period of time, they must repay the training costs. This cannot be a penalty clause. It is essential that the clause goes no further than recouping the actual expenditure of the Company and is not there simply to penalise employees for leaving.
It is also important that the clause is proportionate. For instance, a staggered schedule could state that if the employee leaves within 6 months they must pay 100% of the costs, whereas after 12 months this will decrease to 75% and then 50% after 18 months. This approach ensures that any repayment is in direct proportion to the actual costs incurred, given that the employer will have benefitted from the employee’s new qualification for a certain time period.
If incorrectly drafted, a training repayment clause risks being unenforceable. It is therefore imperative that sound legal advice is sought.
At Alpha, we have a vast experience in providing bespoke, practical advice on HR and employment law issues. This includes the preparation of bespoke training agreements that are legally compliant and meet the needs of our clients. We are proud of our commercial outlook and do not sit on the fence. If you would like to have Alpha on your side, please feel free to contact us.
Martin Kaye have provided advice in some highly complex HR matters and they continue to provide our day to day HR advice through their "ALPHA" HR scheme. They offer a very commercial and pragmatic approach and we have always been impressed by the level of service. The members of staff are approachable and easy to deal with.
Eurofilms Extrusion Ltd
Martin Kaye have provided us with employment and HR advice for several years and we have been very pleased with the level of service and quality of advice provided. We have no hesitation in recommending the team to any organisation which wishes to manage its employment related enquiries.
D Wauchope, Company Secretary
McPhillips (Wellington) Ltd
As a large employer of cleaning personnel, we require expert and prompt employment related advice. Martin Kaye's "ALPHA" service provides this in a clear and robust manner. We have been extremely impressed with the service and would thoroughly recommend them to any employer requiring expert HR & employment support.
J Conry, Chairman
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Johnny Hobeika, Operations Manager
Sanita (UK) Ltd
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