Can an employer withold all of my son's final salary?

[Tazio77]

My son completed a degree in Housing this May, the fees were paid by his employer, a housing authority, and he signed a document that indicated that if he left their employment within two years of completing the degree he would be required to repay these fees.

For whatever reason his working environment has, in the past 2 years whilst he took the degree, changed dramatically, and rather than bore you with tales of mismanagement and totally corrosive behaviours I'll get to the point.

He has been successful in obtaining another post, he submitted his resignation letter, and HR contacted him at 1630hrs today and stated they would be withholding ALL of his final salary which is due on the 15th of August, thereby putting him in total penury, unable to pay any monthly outgoing, mortgage, food, rates petrol etc, indeed he would not even be able to get to work to complete his notice period!.

Forgetting the morals of this, is it actually legal?

Considered thoughts would be appreciated.

[evo4a]

Sounds legal to me if he agreed to the terms.
What makes you think it's not legal?

[taylor172]

yep, they can also request the remainder of the balance from him.

[Tazio77]

The issue for me as a Dad is not does he have to pay, but the fact that the employer is intending to withhold all of his £ 1900odd salary with an absolute disregard to the impact this has on his ability to manage all his other financial commitments.

And as for the comment about tough it out, he has been doing that for the last 2 years already.

[acd80]

I'm about to take up a job with a very large organisation. In the employment contract, there is mention of the final salary being used to pay back any monies outstanding to the company. It is legal and if it's in his employment contract, then there's nothing he can do. I know it's not helpful but he would've known this and should've put money aside for this eventuality.

[tighnamara]

Tazio77 said:

The issue for me as a Dad is not does he have to pay, but the fact that the employer is intending to withhold all of his £ 1900odd salary with an absolute disregard to the impact this has on his ability to manage all his other financial commitments.

And as for the comment about tough it out, he has been doing that for the last 2 years already.

Why would he expect it not to be taken off his final salary, whilst your son may pay the company back after leaving there woud be many out there who would not.

It is the only way that a company can guarantee the money being re paid, slightly naive to leave a company knowing that you have to pay back something you agreed and signed for , the degree will have probably helped him move on and gain his new position.

You say he will pay it back but not at the moment, when would this be if he the non salary payment has such a drastic affect on his outgoings.

Since when has a company been responsible for someones personal finances, not easy but I am sure he must have been aware of the implications.

[Jasandjules]

Can you please set out the exact wording of the term they are relying on.

ETA - and is he claiming he was constructively dismissed?

Edited by Jasandjules on Friday 26th July 19:33

[crazy about cars]

Tazio77 said:

For whatever reason his working environment has, in the past 2 years whilst he took the degree, changed dramatically, and rather than bore you with tales of mismanagement and totally corrosive behaviours I'll get to the point.

Perhaps this is just your personal excuse. He signed a legal binding contract and he has to stick to it. There is no free lunch.

[Countdown]

Tazio77 said:

The issue for me as a Dad is not does he have to pay, but the fact that the employer is intending to withhold all of his £ 1900odd salary with an absolute disregard to the impact this has on his ability to manage all his other financial commitments.

The reason they did that is because a large number of employees in his position decide to take the p1ss about repaying the money. It's an absolute PITA chasing them. In my experience it's the minority who are honest and up front and turn up with a cheque for the full amount. A surprisingly large number will

Deny they signed anything
Argue that they are "special"
Promise to pay it back over 2/3/4/1000 months

I've had one ex-employee complaining that he couldn't repay his car loan as his wife had cancer and had lost her job so they were on one wage. Pretty shocking stuff, until it turned out to be bullshine.

[Countdown]

Tazio77 said:

is it actually legal?

Yes it is. I'd suggest that either you "sub" him or he gets a short term loan to cover his outgoings and repay the balance of the debt. After all, he was going to repay it anyway, all this means is that he'll have to pay some interest on the loan.

[2 sMoKiN bArReLs]

Tazio77 said:

, but the fact that the employer is intending to withhold all of his £ 1900odd salary with an absolute disregard to the impact this has on his ability to manage all his other financial commitments.

The company's first duty is to itself & shareholders. If that's the deal then them's the breaks. As said, if son signed up for the arrangement he was surely expecting this result?

[craigjm]

If the amount owed for the course is equal to or more than his final salary they are completely within their legal rights to withold it based on the training agreement he signed. No ifs no buts and they dont have to care for the welfare of the individual. Doesnt matter a jot what the working conditions have been like he has beneifited from them and they wont be benefiting from his qualification Harsh but true and if i was him i would suck it up and move on because you will need a positive reference from them in the future.

The upshot is think about what you are signing and how it impacts on you not just when you sign it but all potential scenarios hence

[Ultuous]

2 sMoKiN bArReLs said:

The company's first duty is to itself & shareholders. If that's the deal then them's the breaks. As said, if son signed up for the arrangement he was surely expecting this result?

Indeed.. I'm not usually one to side with/ add another post towards what can be the 'acerbic majority' on here, but it's rare to get an opportunity that includes funding to pay for ever-increasing study fees these days... If things have turned that bad, just take the education (which has presumably helped secure the new position) accept that the losses have to be cut, and move on - life's too short!

[sunoco69]

So he is getting circa 34k per year in this job. I assume he left for a better paid job? Unless he is a very old grad and married with kids/mortgage then that is a lot of cash per month. He has no savings to see him through 1 month????

[2 sMoKiN bArReLs]

OP: 47 posts in 133 months. Top lurking!

[anonymous-user]

This has been a pretty standard clause that I've had to sign whenever I've attended an expensive training course ("Leave within 12 months and you owe the company 'x'% of the cost", etc.), so if he's resigned then I'm not sure what his complaint is TBH?

[texasjohn]

There is a difference between 'you'll owe money' and 'you'll owe money and we reserve the right to withhold salary in the event you owe money at departure'.

Suggest the terms of the employment contract are reviewed to see what it says exactly.

[hidetheelephants]

Slightly offtopic, but his financial embarassment could be eased by asking his new employer to pay him weekly or fortnightly for the first couple of months; some employers are willing to do this for new starts.

[craigjm]

texasjohn said:

There is a difference between 'you'll owe money' and 'you'll owe money and we reserve the right to withhold salary in the event you owe money at departure'.

Suggest the terms of the employment contract are reviewed to see what it says exactly.

This has got nothing to do with the employment contract. A separate learning agreement has been signed specifically around that spend mentioned in the opening post.

[Podie]

Rule 1 of jobs: Always resign after your bonus and salary payment.