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Hello, my name is XXXXX XXXXX it is my pleasure to assist you with your question today.
How much was the full amount of the training costs?
I don't know a full cost as it is kept private - but I would estimate around £7-8k
ok let me get my response ready please
First of all I will deal with the restriction issue. An employer cannot just stop you competing with the business or working for a competitor as that would be seen as a restraint of trade. They can only do this if they are trying to protect a legitimate business interest, such as the use of their trade secrets, confidential information, influence over clients or suppliers and so on. If you will not be breaching any of these then it is unlikely they can stop you from working for another company, even if they are competitors.
As to the training costs, these 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 for an 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. For example, 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 for the 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 for the employer to show that the repayment clause was reasonably drafted and that the costs they are trying to recover are reasonable in the circumstances.
OK thanks, XXXXX XXXXX terms of the restriction clause - my contract states that I shall not for 6 months after termination with my company be involved with the provision of services or otherwise have any business dealings with any restricted customer (the client) in the course of any business concern which is in competition with any restricted business (my company). - This in itself would not exclude me from taking up employment with the client?
No it would not, especially if you avoid doing the activities they specifically restrict
And if the contract I signed does not contain a sliding scale - would that make it unlawlful?
not unlawful, but difficult to enforce, for example if they are after a higher amount they may find it difficult to justify claiming that in the absence of such a scale
RIght ok - and in terms of the fact that I am not considered to be on the graduate scheme any more - would that go in my favour or would the two year time period cover that?
yes it will help, the wording does seem to cover the initial 2 period of being a graduate or the immediate period after you had graduated, which is no longer applicable
ok thanks very much for your help - just one last question! If they were to consider that I breached my contract by taking up employment with a client - what would the process be?
. The following are potential outcomes if the employer takes legal action:
Would the ultimate outcome be to reclaim compensation for damages? So if there were none there would be no point in following it up?
yes that is correct
That's great thank you very much
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