Introduction to this document

Training costs agreement

If you invest in external training for staff and are worried they might leave as soon as they’ve obtained their certificate, qualification or whatever, consider asking your employees to sign a training costs agreement. But do note that it must be signed before commencement of the training.

Out of pocket

Without our Training Costs Agreement, you could find yourself considerably out of pocket if you agree to fund an employee’s external training course, only to find that they then either drop out of or are thrown off the course or they leave employment either during the duration of the course or a short time after it has ended. Training is by no means cheap as you know and so you should protect yourself in these circumstances. Our training costs agreement should be just what you’re looking for. It enables you to claw back the costs of the course in a number of circumstances, including those identified above. Do take advice though if the training course is a mandatory requirement of employment, particularly if the employee is paid at or close to national minimum wage (NMW) levels, as the contingent deduction is likely to be classed as a pay reduction for NMW purposes, meaning the employee must still be left with at least the NMW after the potential deduction has been taken into account.

Not a disproportionate penalty

It’s quite legitimate for you to require a reasonable minimum period of service after the training is completed, but bear in mind that the contractual provision for repayment of the costs incurred in relation to the training course must not act as an extravagant penalty on the employee out of all proportion to your loss. For example, it would be unreasonable to tie the employee in for two years after you funded a one-day training course, whereas if you funded the employee’s three-year degree course, a two-year tie-in might well be reasonable. In addition, any tie-in after completion of the training should be on a sliding scale, so that the longer the employee remains employed, the less they will have to pay back to you if they leave. Finally, in order to comply with the statutory provisions, the agreement must be signed before commencement of the training. You can’t ask the employee to sign it after the course has ended, so ensure you make signing the agreement a condition of funding the course.