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Can a business recover training costs after an employee leaves the company?

Hiring a new person is often regarded as a big investment, this can be in the time it takes to recruit and induct and also the more obvious expenses such as...

Written by: Jasmine Gray, Marketing and Sales Coordinator

Written by: Jasmine Gray, Marketing and Sales Coordinator

Jasmine's role is to ensure HR Elite has a bright social media presence and to create and manage marketing campaigns that drive online traffic to the website. E-marketing is also a vital part of her role to ensure retained clients and potential new clients are kept up to date with relevant employee legislation and HR updates. Jasmine has a degree in Business Administration and is starting an advanced apprenticeship course in Digital Marketing. In her spare time Jasmine likes to try new recipes and bake.

Jasmine's role is to ensure HR Elite has a bright social media presence and to create and manage marketing campaigns that drive online traffic to the website. E-marketing is also a vital part of her role to ensure retained clients and potential new clients are kept up to date with relevant employee legislation and HR updates. Jasmine has a degree in Business Administration and is starting an advanced apprenticeship course in Digital Marketing. In her spare time Jasmine likes to try new recipes and bake.

Hiring a new person is often regarded as a big investment, this can be in the time it takes to recruit and induct and also the more obvious expenses such as advertisements costs. It then takes more time and effort to train a new person, even if they show the required skill and understanding – each company differs in the way they develop and train their staff. Read our blog HERE to find out more on this subject.

Most companies will make a huge investment in staff training and development.  This starts from the on boarding stage right the way through the employment cycle.  It is recognised by most employers that their staff are their biggest asset, it’s the staff that make a company successful and in an ever changing world it is important to ensure staff are highly skilled and trained in line with the requirements of the job role and beyond in some cases.

training

No matter whether an employer pays a fee for a staff member to attend a training course or whether it be through on the job training there is always a cost involved, at the very least the cost of time.  However, thousands of pounds can be spent on certain types of training courses/programmes which companies are prepared to pay if it means they gain the benefit from a high performing staff member.  BUT, what if that staff member were to attend the training and then leave, will that money be lost?

For a company to protect themselves, they can arrange for the cost of any additional training to be recovered if the employee leaves the company within a certain amount of time. This can be written in the contract of employment or through a training agreement for it to be legally binding. The agreement usually gives a timeframe in which the employee must remain with the company for following completion of the training course. An example is outlined in the table below;

Period in which the employment ends Proportion of fees payable
Within 9 months of completing the training 100%
From 9 months and one day until and including 18 months of completing the training 50%
From 18 months and one day until and including 24 months of completing the training 25%
From 24 months and one day of completing the training NIL

This training agreement shows any employee who has been with the company less than 2 years need to pay a proportion of the fees. How do we recover this?

The company must send out a letter with their intentions of deduction from wages as per the contract or agreement signed. These deductions are lawful as per the Employment Rights Act 1996. Consent has been given by the employee who had been made aware of the risk of payable fees at time of signing.

If an employees’ final wages do not cover the balance required, the company can request a refund and set out payment terms as per the agreement. It is wise to consider the employees reasons for leaving and any issues in their personal life as the refund may bring on extra financial debt or inhibit their capability to care for a dependant. This can damage a company’s reputation and in some instances may work in their favour to cancel the debt and allow the employee to move on gracefully if necessary.

What if a capable employee refuses to pay? This can be a difficult situation, however if it is worth the recuperation – a company can take the employee to court. Armed with a valid and signed training agreement, this doesn’t often fail.

As shown in the table above, the proportion is often a sliding scale to ensure employees are not trapped into paying back extravagant and unconscionable amounts of money. The agreement needs to be fair and justifiable – if an employee who is refusing to pay attends a court hearing, this will be the judges’ decision.

Can a company recover costs after 2 years’ employee service?

The agreement will show an end date to the employees’ responsibility to pay back any fees. After this time, an employee can leave the company without any risk. There is very little a company can do to recover costs after this time has passed as a court case will usually side with the written agreement.

We at HR Elite ensure this agreement is written into every contract we issue to minimise the risk of employment tribunal. If you need help or support regarding training and recovering the costs, please contact our consultants on 01206 700 690 or email info@hrelite.co.uk

Written by: Jasmine Gray, Marketing and Sales Coordinator

Written by: Jasmine Gray, Marketing and Sales Coordinator

Jasmine's role is to ensure HR Elite has a bright social media presence and to create and manage marketing campaigns that drive online traffic to the website. E-marketing is also a vital part of her role to ensure retained clients and potential new clients are kept up to date with relevant employee legislation and HR updates. Jasmine has a degree in Business Administration and is starting an advanced apprenticeship course in Digital Marketing. In her spare time Jasmine likes to try new recipes and bake.

Jasmine's role is to ensure HR Elite has a bright social media presence and to create and manage marketing campaigns that drive online traffic to the website. E-marketing is also a vital part of her role to ensure retained clients and potential new clients are kept up to date with relevant employee legislation and HR updates. Jasmine has a degree in Business Administration and is starting an advanced apprenticeship course in Digital Marketing. In her spare time Jasmine likes to try new recipes and bake.

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