Repayment of training course fees - unfair terms in contract

[sugerbear]

My son recently ended his employment with a company and they are now asking him to repay course fees and time back which amounts to a significant amount.

The terms of the contract state that he must repay 100% of the costs (time and course fees) for any course taken within the past 18 months and then no cost if the course was taken more than 30 months ago.

The courses were required for his job and the company received a benefit as they enabled him to complete jobs that he would otherwise be unable to complete.

Has anyone come across this type of term within an employment contract and is it reasonable / enforcable? It feels like the contract term is a penalty rather than an actual estimate of the value of the loss the to the company (and if it was a penalty it would make the contract term unenforcible).

[sociopath]

Happens a lot. They make an investment in their employee and expect some pay back.

The alternative could have been they'd hold your son back from progressing because they weren't convinced in his commitment?

Which would you prefer?

Edited by sociopath on Tuesday 2nd May 15:22

[Pieman68]

sugerbear said:

My son recently ended his employment with a company and they are now asking him to repay course fees and time back which amounts to a significant amount.

The terms of the contract state that he must repay 100% of the costs (time and course fees) for any course taken within the past 18 months and then no cost if the course was taken more than 30 months ago.

The courses were required for his job and the company received a benefit as they enabled him to complete jobs that he would otherwise be unable to complete.

Has anyone come across this type of term within an employment contract and is it reasonable / enforcable? It feels like the contract term is a penalty rather than an actual estimate of the value of the loss the to the company (and if it was a penalty it would make the contract term unenforcible).

IANAL and am unsure about the specifics, but I don't think that it's that uncommon a clause

I had it at my last place where they needed certain numbers of qualifications in order to show a specific level of accreditation with a manufacturer

Where I was going I didn't have need of the qualification, so they left my email address alive and I didn't move my learning history over so that we could reach a compromise

[Zetec-S]

Not that uncommon.

Can he agree a payment plan with them, rather than them demanding it all as a lump sum?

[Countdown]

sugerbear said:

My son recently ended his employment with a company and they are now asking him to repay course fees and time back which amounts to a significant amount.

The terms of the contract state that he must repay 100% of the costs (time and course fees) for any course taken within the past 18 months and then no cost if the course was taken more than 30 months ago.

The courses were required for his job and the company received a benefit as they enabled him to complete jobs that he would otherwise be unable to complete.

Has anyone come across this type of term within an employment contract and is it reasonable / enforcable? It feels like the contract term is a penalty rather than an actual estimate of the value of the loss the to the company (and if it was a penalty it would make the contract term unenforcible).

It's a very common clause. Anybody in our Finance team that we are sponsoring to do their accountancy qualifications will have signed a Training Contract to agree to repay the costs of tuition and exams if they leave before two years. Tbh i think asking for the time to be repaid as well is a bit cheeky but I guess some companies are quite strict.

At our place any sums owed are deducted automatically from their final salary.

[Taita]

See if you can negotiate a sliding scale.

eg leaving after 1 month, 100%, after 12 months 30% etc. Propose the graduations in your favour

[zbc]

I had one of these, albeit quite a few years ago, and I negotiated with the firm I was going to to pay a chunk of it. I almost made money on it as I explained I would be taxed on the money they gave me to compensate the company I was leaving so they gave me a bit extra.

[Red9zero]

Definately not uncommon. Both mine and my wife's employers have the same clauses. Hers will also only pay the first exam fee. If she needs another go, she has to pay. Luckily she is smarter than me.

[Ussrcossack]

Just out of interest why did he leave?

[OutInTheShed]

Was this not explained to him when he took the course?

It may be possible to claim the tax back on his contribution to courses.

[ChocolateFrog]

In the military people used to do Wellbeck and in service degrees 100% paid for either return of service stipulations.

I know quite a few that left as soon as they'd completed their degree. HMG never came after them for the money.

Have these onerous terms ever been tested in court?

[alscar]

Not uncommon in quite a few Industries - particularly Financial.
Assuming he signed the contract not sure now what he expects / can actually do about it though.

[BlindedByTheLights]

I’ve had to sign learner agreements quite a few times in my career with different companies, not uncommon. Usually similar to the one you’ve mentioned OP, 100% of cost within 12 months, reducing over time.

[bigandclever]

Where's the unfair terms bit? Sounds like there's a proportional component to it, doesn't sound like there's an actual penalty for leaving, doesn't sound hand-cuffy ...

[C5_Steve]

As above, very common and sounds like it was very obvious in his contract. Sounds like they were professional qualifications that he can now use in other companies rather than internal training, so the business is entitled to recoup the money they put into training someone where they haven't had the expected return.

Take it as a learning experience (no pun intended), he's more qualified than he would of been so it won't be money wasted.

[2 sMoKiN bArReLs]

As said, common clause, but many firms don't actually invoke it.

We had that with all our engineers, as a safety net for their early days. More often than not we didn't actually bother with the recoup unless they'd left very soon after the training, or if they'd managed to get up my nose.

[sugerbear]

bigandclever said:

Where's the unfair terms bit? Sounds like there's a proportional component to it, doesn't sound like there's an actual penalty for leaving, doesn't sound hand-cuffy ...

The unfair part is that they expect him
To repay 100% of the costs when they have received a benefit. I think a fairer term
would be 1/30 but it feels like they want all the money back when they have seen some benefit from him attending the course.

Contract terms don’t allow penalty clauses, they can only be for an actual loss, regardless of him signing the contract.

He already had experience from a previous job and he had lots to practical experience from college. It isn’t as if he has gone into a job and had to be taught how to do things.

[2 sMoKiN bArReLs]

sugerbear said:

bigandclever said:

Where's the unfair terms bit? Sounds like there's a proportional component to it, doesn't sound like there's an actual penalty for leaving, doesn't sound hand-cuffy ...

The unfair part is that they expect him
To repay 100% of the costs when they have received a benefit. I think a fairer term
would be 1/30 but it feels like they want all the money back when they have seen some benefit from him attending the course.

Contract terms don’t allow penalty clauses, they can only be for an actual loss, regardless of him signing the contract.

He already had experience from a previous job and he had lots to practical experience from college. It isn’t as if he has gone into a job and had to be taught how to do things.

Has he opened negotiation? I'll bet there's a deal to be done.

[alscar]

sugerbear said:

The unfair part is that they expect him
To repay 100% of the costs when they have received a benefit. I think a fairer term
would be 1/30 but it feels like they want all the money back when they have seen some benefit from him attending the course.

Contract terms don’t allow penalty clauses, they can only be for an actual loss, regardless of him signing the contract.

He already had experience from a previous job and he had lots to practical experience from college. It isn’t as if he has gone into a job and had to be taught how to do things.

But it works both ways - I’m sure the company think it’s equally unfair for your son to leave after spending money on him which ultimately benefits them both - hence the sliding scale of repayments.
I also assume his new salary is a decent uplift.
As the vast majority of replies have said it’s really not that uncommon.
However if he chooses not to repay them then whether they would come after him for the money I know not although presumably he still has a final monthly salary to receive ?
In other words there might be some negotiation ability but I’d be leaving the word “ unfair “ out of any communications.

[Jasandjules]

When you say "required for" his job, is that correct wording i.e. he did not have the relevant qualifications and these courses enabled him to do so ?

Or were they "extra" courses that he did not need to complete to be able to undertake his role?