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Max Lowry
Max Lowry, Advocate
Category: Law
Satisfied Customers: 1457
Experience:  LLB, 10 years post qualification experience
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Can this be seen as a penalty in my contract? "Your employment

Customer Question

Can this be seen as a penalty in my contract? "Your employment may be terminated by either party giving not less than 30 days notice in writing. If you choose to terminate your contract, any fees paid by the company in relation to the ACCA qualification during the prior 12 months, will be repayable by you to the company in full."

This is seperate to my normal contract which relates to my training (see below):

ACCA exam training

As you will be studying for the ACCA qualification, please see below for a summary of the rules which will apply to you. Please note these will form part of your terms and conditions of employment.

Sonik is committed to providing adequate facilities, support and opportunity to prepare for professional examinations.

• All tuition fees and examination fees will be paid by Sonik for a first attempt at each level of examination.
• Paid study leave will be available in respect of tuition, progress examinations and the actual examination days for a first attempt at each level of examination, subject to a maximum limit of 20 days per calendar year.
• A maximum of two modules to be attempted at any one sitting.
• Sonik does not provide financial support for the retake on any examinations. The cost of tuition fees and examination entry fees for retakes will be borne by you.
• Any further study leave required in respect of a retake examination must be taken from your own holiday entitlement.

Also, I have compalined about having to work overtime everday I don't get paid for this. On average I have worked 3 hours a day for free just to keep up with my work. This is the response I received by email from my boss the Finance Director:

"In terms of your overtime, sadly that is the way it is in finance. Regardless of which company you work at, finance always work longer hours than anyone else. That’s just something you’ll have to get used to, as frustrating as it is."

Is this legal and what rights do I have if I feel I have to leave because of this but I will then owe them £3K for my study support so I feel like I am stuck?

Thank you for your help!
Submitted: 4 years ago.
Category: Law
Expert:  Max Lowry replied 4 years ago.

Max Lowry :

Hi, welcome to Just Answer. I will help you with your question.

Max Lowry :

This question is familiar as I dealt with something very similar only a few months back for a client.

Max Lowry :

The first thing to appreciate is that penalty clauses apply in cases only where the "penalty" arises following breach of contract. It does not apply where there is no breach of contract.

Max Lowry :

So, to work out if the penalties rules apply, you need to ask whether the repayment obligation applies only on breach.

Customer :

Could they breach my contract by making me work overtime for free everyday?

Max Lowry :

Potentially, yes.

Max Lowry :

This could be a breach of contract if they seek to require you to work more for nothing without legitimate reason and/or contractual authority.

Max Lowry :

But that has nothing to do with the penalty point.

Max Lowry :

Which do you want to know about?

Customer :

The training contract is seperate to my normal contract. I have seen online my study support should reduce each year e.g. by 25% each year. Becuase i t is not done in this way it could be seen as a penalty for leaving

Max Lowry :

What do you want me to focus upon, the penalty point?

Customer :

yes please

Max Lowry :

Okay. I doubt this would be considered to be a penalty clause, and thus, unenforceable. The reason is this: the repayment obligations (by whatever percentage) do not arise on breach of the contract. The giving of notice is not breach - it's simply an agreed way of bringing it to an end. If it has said that you pay back if you leave in breach of your notice obligations (which would be a breach), then as a measure of damages, it would be penal in nature and unenforceable. Here, you have nothing more than a simple agreement to pay back when you leave, if you leave within a certain time, and you pay back a certain percentage.

Max Lowry :

These clauses are very common in accountancy/legal and other professional circles and are generally fully enforceable.

Customer :

Can this be taken out of my final salary payment? it does not state they will take it from my last pay but I'm worried they will

Max Lowry :

In practice, yes, it could be.

Max Lowry :

Does this answer your question?

Customer :

Yes thanks. However, I was hoping it was a penalty

Max Lowry :

I know - it would have been a better outcome. But, best I'm honest with you.

Max Lowry :

If you need further information, just let me know. Please do remember to rate my answer as highly as you can.

Customer :

what are the odds they cant take it from my last pay. It doesnt state it in my contract

Max Lowry :

Well, even if they took it and they shouldn't, you have a breach of contract claim against them. But, equally, they would against you. And so, one would offset the other - and regardless of whether they should do it or not, they probably would, you'd both sue each other - and get nowhere further for it.

Customer :

OK thanks

Max Lowry :

Thank you!

Customer :

No problem.

Max Lowry :

Thanks - please remember to rate the answer for me.