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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 46769
Experience:  Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
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Due to a very unpleasant working environment and career re-orientation,

Resolved Question:

Due to a very unpleasant working environment and career re-orientation, I am currently seeking to leave my employer. Mid-2013 I signed a training contract to do a course, which my company paid. I have passed some exams, but am not qualified. I would like to know my rights with regards ***** ***** following clause of my training contract:
"Should the student resign from before completion of the qualification or within 12 months of claiming support of the items listed above, reserves the right to deduct from the student’s final salary an amount equal to the amount of financial support claimed under this contract. "
From my understanding, the clause should have said "the later of" the two options given above, instead of giving alternative conditions. However, I am not 100% sure this is the case and would like advice.
Thank you very much
Submitted: 2 years ago.
Category: Employment Law
Expert:  Ben Jones replied 2 years ago.
Ben Jones :

, my name is ***** ***** it is my pleasure to assist you with your question today. I am not quite clear on what your query is, can you please clarify?

Customer:

, I would like to know whether I will have to reimburse the totality of what my employer has paid under the training contract when I leave the company. I would like to leave within the next few months, if possible, and don't think I will have the time to be able to finish my training course, as this may take longer (plus, I would like to re-orient my career away from my current industry).

Ben Jones :

The wording of the clause is not a particular concern because even if you believe they should have said ‘the latter of’, its absence does not make the clause invalid.

As far as the law foes, employers can spend a considerable amount of money on training their employees, only to see them leave shortly afterwards. In order to ensure that the employer can provide an employee with training and that the employee does not take advantage of the situation by leaving soon afterwards, it is common practice to have a repayment provision in the contract of employment. Under it the training costs are deemed to constitute a loan to the employee, which becomes repayable if they leave their employment within a certain period after the training completes.

Whilst it is legal to have such clauses, employers must be cautious to ensure that the amount of costs they are trying to recover is a genuine pre-estimate of the damages which they have suffered as a result of the employee leaving early. In the event that it is not, such clauses could be considered a penalty against the employee, which would make it legally unenforceable. Therefore, if the employer has derived some benefit from the employee undertaking the training course during the fixed repayment period (e.g. where an employer has been able to charge customers more employee’s services by virtue of that training or qualification) then the amounts which may be recovered from the employee should be reduced to reflect that benefit.

The contract should also contain a sliding scale of repayment whereby the repayment amount reduces according to the length of time the employee remains with the employer after the training has been completed. , 100% of the fees to be repaid if the employee leaves within 0-12 months after the training has finished, 50% if they leave 12-24 months after, 25% if they leave 24 - 36 months after.

There are a couple of ways employer to try and recover these fees - by deducting them direct from the employee's wages or, if the employee has already left and paid up fully - by taking them to court.

Any deductions from the employee's wages can only lawfully take place if there was a clear written agreement by the employee allowing the employer to do this, such as a contractual clause or a separate agreement which they signed. In the absence of such an agreement the deduction will be unlawful and can be recovered.

If the matter goes to court, it would be employer to show that the repayment clause was reasonably drafted and that the costs they are trying to recover are reasonable in the circumstances.

One consideration is why you were forced to leave. There are circumstances when an employer has committed a serious breach of contract first. The whole contract, including the clauses on repayment, could then become immediately void and the employee would be treated as being 'constructively dismissed'. So if there are reasons to believe the employer has acted in breach of contract, whether a breach of an express contractual term, or other breaches such as bullying, exposing the employee to unreasonable stress, discriminating against them, etc this reason can be relied on in order to leave and argue that the repayment clauses should not apply.


Customer:

Ok - I do not have a sliding scale of repayment. All I have with regards ***** ***** is the clause that I copied above. Would this make the clause invalid? Or is the clause reasonable as is, and if I do leave, I will have to reimburse the full amount of what my employer paid under the training contract?

Ben Jones :

no it would not automatically make it invalid - it is not a legal requirement to have a sliding scale, but it would make it more reasonable. On its own this clause can be vali but how much they can recover will depend on the other factors I mentioned, like the benefit derived from the training, etc

Customer:

Ok I see - so there is a means to negotiate the amount they would deduct from my salary, based on the knowledge gained during the training? As well as any other factors as to why I was forced to leave e.g. being exposed to unreasonable stress, etc?

Ben Jones :

yes if you were forced to leave due to the employer's unreasonable behaviour and that triggered the repayment clause it would not be just because you wanted to leave and take the benefit of the training away with you - the reasons would be different and not what the clause had intended to cover

Customer:

Ok thank you - and one last question. With regards ***** ***** pressured to resign, what kinds of examples/proof/behavior of my employer could possibly help me prove "unreasonable behaviour"? I do feel that my employer is acting in a deliberate way to force me to resign prematurely, however, I feel that this would be more tricky to prove concretely.

Ben Jones :

well there could be many examples - breach of specific contractual terms, breach of the implied term of trust and confidence, as mentioned bullying, unreasonable working conditions, discrimination, etc

Customer:

Ok and could demoting or withholding work from me (that I am capable of doing and previously worked on similar work) be an example? Would the demotion have to be in writing or could it be implicit e.g. on an organisational chart of a company?

Ben Jones :

a demotion can amount to such a breach as it affects your contractual rights and your status - it does not have to be in writing, as long as it has been implemented

Customer:

Would there have to be a decrease in pay? E.g. If my salary stayed the same, but I was demoted on a functional level?

Ben Jones :

no salary decrease necessary and a decrease in status can also suffice

Customer:

ok thank you very much

Ben Jones :

you are welcome

Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 46769
Experience: Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
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