Recouping training costs from an employee who leaves

Training is a fundamental and essential part of an employees career journey with their employer however it can also be costly investment. 

Understandably it’s common to want to see some return on the investment through retaining your skilled employees. 

In today’s recruitment market it can also be a useful incentive for employees to remain in the job. 

However, when an employee decides to leave through resignation, having the right training fees claw back agreement in place is essential to ensure the employer’s right to recover training fees. 

It would be unfair to deduct if the employee is made redundant or if the employer dismisses the employee.

Whilst this is normally referred to in an employee’s written statement and an employee handbook, don’t make the mistake of believing that this will allow you to make lawful deductions from pay.

What has to be in place?

To enable you to claw back any training costs, you need to ensure you have a specific and signed training claw back agreement in place.  It’s essential that this be put in place prior to the training beginning.  A retrospective agreement with not satisfy the requirements of any lawful deductions from wages.

Training fees agreements often operate on a sliding scale so the longer an employee remains with the employer, the less they are due to refund on leaving.  It’s also wise to have a proviso to cover the scenario of an employee who may leave during the training itself.

The training agreement should also include a clause to allow deductions from wages to give an employer the right to make a lawful deduction in respect of training.

Finally, make sure the training agreement has been signed and returned to avoid any misunderstandings further down the line. Training agreements should be retained on file. They have been known to grow legs when an employer wants to act upon them, so make sure this doesn’t happen to you.

If you need further advice on implementing training agreements, please contact us and speak to one of the team.