Recouping training costs from employees

Staff training is vital to keep your organisation successful and ahead of the competition.

It enables employees’ skills to remain up to date and fill in any gaps. It is also a useful tool to increase employee engagement, improve retention and enhance operational efficiency.

The benefits of training are clear, but it can be expensive so you may need to think long and hard before deciding whether it is worth it. This is why it can be very frustrating when you have paid for an employee to undertake an external training course and they leave soon after completing it. In these circumstances, what can you do?

Before they start the training, have an agreement in place

Employers do not have a statutory right to claw back training costs. In order to be able to recoup the costs of an external training course, you need to have a provision which allows you to do so in the employee’s Contract of Employment or you should have a written agreement with the employee to this effect.

You can clearly state that if their employment is terminated while they are undertaking the course or for a specified period after they have completed the course, you can recoup the costs. You can implement a sliding scale system, for example, if they leave while the course is ongoing or up to six months after, they pay 100% and if they leave between six and nine months after completion, they pay 75%. With the sliding scale system, the main premise is that the longer they stay and the longer you benefit, the less they have to pay back.

You should also make it clear that they agree to you deducting this amount from their final salary or any outstanding payments that are due to them upon termination. This helps prevent complaints in the future.

Word of warning!

Your Contracts of Employment should be drafted by an Employment Law expert, who can tailor it in accordance to your organisation’s best interests and in accordance to legal requirements and best practice. If you would like to discuss this further, contact us for a no-obligation discussion.

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