Training Course Repayment Agreement
It has been reported that some large companies, such as Capita and FDM, bring in some employees through training programmes that cost very little, but require companies to have people who leave their jobs at the end of the courses repay much larger sums, supposedly up to £18,500. At first sight, it would be a penalty clause and a restriction on trade and would therefore be illegal and unenforceable. We understand that a legal challenge to this type of clause is being initiated. Properly executed, training agreements are a completely legal and appropriate way for companies to protect themselves financially. However, if you decide to place one, there are a few things to watch out for. Ideally, the employer wants the right to deduct all final training expenses from the employee`s salary. If so, this right must be explicitly set out in writing, failing which it may be an unlawful deduction from wages. The second thing to think about when using training agreements is the idea of «trade restriction». As I said, training agreements are supposed to protect companies from losing their investments – but the law will not allow an employer to use them to prevent someone from changing jobs inappropriately. We are often asked to design this type of agreement for employers and advise us on their feasibility. As usual, the answer to the question is whether the agreement is applicable, whether it depends on the circumstances and how well the agreement was drawn up. . .