Can my employer charge for training costs if I fail the exam
Discussion
Hello everyone. First time poster in this section, so please be gentle 
In a nutshell, my employer recently merged with another company and formed a much larger company group. As such, we have been TUPE'd over into the new company group. Not a problem so far.
New and amended policies are being created to cover the new company and the one that caught my eye is the Learning & Development policy, particularly the clause on recovering costs. This covers not only attempts to recoup training costs if I leave the company, but also if I take a training course and exam, and then fail the exam, the company will recoup the full training and exam costs.
Talk about discouraging your highly skilled staff...
Here is the paragraph in question, is this legal? Can the company actually do this, or is it a scare tactic? It sounds like a punishment clause to me (a la bank overdraft charges), as we aren't required to pay for training if we are successful in the exam.
Opinions, thoughts?
The newly formed company is very large with turnover of over £800m and profits ITRO £250m at the last audit, so hardly scraping the barrel.
Andy
In a nutshell, my employer recently merged with another company and formed a much larger company group. As such, we have been TUPE'd over into the new company group. Not a problem so far.
New and amended policies are being created to cover the new company and the one that caught my eye is the Learning & Development policy, particularly the clause on recovering costs. This covers not only attempts to recoup training costs if I leave the company, but also if I take a training course and exam, and then fail the exam, the company will recoup the full training and exam costs.
Talk about discouraging your highly skilled staff...
Here is the paragraph in question, is this legal? Can the company actually do this, or is it a scare tactic? It sounds like a punishment clause to me (a la bank overdraft charges), as we aren't required to pay for training if we are successful in the exam.
Opinions, thoughts?
The newly formed company is very large with turnover of over £800m and profits ITRO £250m at the last audit, so hardly scraping the barrel.
- If you leave our employment, with the exception of redundancy or termination of employment for any reason other than a dismissal as part of a disciplinary process, either before completing the course or within one year of completion you will be required to pay back all of <redacted company name> costs connected to the course including costs for materials and any professional memberships.
- If you leave within two years of completion you’ll be required to pay back 50% costs connected to the course. You’ll also be required to pay back all of <redacted company name> costs if you don’t complete the course or if you fail to pass any relevant exams and so are not awarded the qualification.
- You should note that these repayment terms are strictly enforced and that we’ll deduct the full amount owed from your salary.
- Where possible we will deduct the amount owed over more than one month’s salary.
- We also reserve the right to deduct the full or partial amount from any bonus payment that may be due.
- Where it is not possible to deduct the full amount from your salary or bonus you can pay any additional amount outstanding by personal cheque which will need to be cleared before your final day of employment
Andy
From my own experience, TUPE and all that flows from it is complicated stuff.
As ever with these types of question, if you think it worth it, better ask your union rep/lawyer.
FWIW, I think it would be hard to enforce this clause if you had already started the course under your existing T&Cs but the difficulty may arise for you where you elect to take training subsequently and/or where you have accepted a promotion/new role under the new T&Cs.
Peter
As ever with these types of question, if you think it worth it, better ask your union rep/lawyer.
FWIW, I think it would be hard to enforce this clause if you had already started the course under your existing T&Cs but the difficulty may arise for you where you elect to take training subsequently and/or where you have accepted a promotion/new role under the new T&Cs.
Peter
The clawback clause is completely standard/normal (at least it has been in every organisation where I've worked). The logic is that the company is investing time and money into developing your skills and therefore it's entitled to a reasonable period of payback on its investment. the company is also aware that, as a result of its investment you become more valuable and more attractive to other employers, so it's protecting itself.
The fact that it's a massive company is irrelevant. Shareholders will still expect management to keep a close eye on costs.
The fact that it's a massive company is irrelevant. Shareholders will still expect management to keep a close eye on costs.
Sorry, maybe I should have been clearer with my question. The concern lies with the bit that says if a staff member were to take and fail an exam, that staff member would be liable for the training costs and exam fee (i'm also assuming they will chuck in hotel/travel for good measure).
andycaca said:
Sorry, maybe I should have been clearer with my question. The concern lies with the bit that says if a staff member were to take and fail an exam, that staff member would be liable for the training costs and exam fee (i'm also assuming they will chuck in hotel/travel for good measure).
Still recoupable I'm afraid (if that's what the original document you signed said). It's to stop people (in our case) using two years study leave/residentials/revision leave/exam leave as an excuse for a jolly. It tends to focus minds... If the original training agreement didn't state it (or is silent on the matter) then i think it boils down to custom and practice.
FWIW it's highly unlikely that they will recharge you for travel & subsistence. IME they're not normally recorded to facilitate recovery. (i.e. in simple terms they would need to go through all your claims to identify what was study-related and what wasn't, they would also need to look at what hotel fees were paid directly rather than you paying/reclaiming etc)
Sorry I understand that your company might do things differently - I'm only speaking from personal experience.
Edited by Countdown on Tuesday 25th July 10:24
Countdown said:
andycaca said:
Sorry, maybe I should have been clearer with my question. The concern lies with the bit that says if a staff member were to take and fail an exam, that staff member would be liable for the training costs and exam fee (i'm also assuming they will chuck in hotel/travel for good measure).
Still recoupable I'm afraid (if that's what the original document you signed said). It's to stop people (in our case) using two years study leave/residentials/revision leave/exam leave as an excuse for a jolly. It tends to focus minds... If the original training agreement didn't state it (or is silent on the matter) then i think it boils down to custom and practice.
FWIW it's highly unlikely that they will recharge you for travel & subsistence. IME they're not normally recorded to facilitate recovery. (i.e. in simple terms they would need to go through all your claims to identify what was study-related and what wasn't, they would also need to look at what hotel fees were paid directly rather than you paying/reclaiming etc)
Sorry I understand that your company might do things differently - I'm only speaking from personal experience.
Edited by Countdown on Tuesday 25th July 10:24
Worked for a company where quite a few people worked their way through professional accountancy qualifications which were paid for by the company (me included). In practice they didn't actually claim back for any failed exams (even though technically they could), but any resits/extra revision courses/etc had to be picked up in your own time and at your own cost.
Isn't the real point here, though, that, although it may be perfectly standard practice in many companies, the OP is having this rule applied to his employment contract retrospectively as a result of the merger/takeover, i.e. it was not, as I understand it, in the Ts and Cs he signed up to and which form part of his contract?
Hence my question about whether he had elected to go on a course since or had in any other way consented to the application of this condition.
Hence my question about whether he had elected to go on a course since or had in any other way consented to the application of this condition.
Don't take this as gospel as there are far more qualified people here but if TUPE'd then it's the same T&C's.
They can ask you to sign new T&C's but you can refuse. In "Merger" situations I've known all three situations, people signing new T&C's, people keeping same T&C's, and a few made redundant because they refused the new T&C's (well tbh they negotiated this as they were very happy with the payoff)
They can ask you to sign new T&C's but you can refuse. In "Merger" situations I've known all three situations, people signing new T&C's, people keeping same T&C's, and a few made redundant because they refused the new T&C's (well tbh they negotiated this as they were very happy with the payoff)
Putting TUPE aside for a moment.
Do you think that your company would enforce the clause.
for example you attend all the lessons or do the online training, but can't really be arsed so mess up and don't get the qualification, then they would enforce
Or
You attend all lessons are a model pupil but fail by 1 percent, they not be the type of company I'd want to work for if they enforced the clause
Are you preparing to fail too?
Do you think that your company would enforce the clause.
for example you attend all the lessons or do the online training, but can't really be arsed so mess up and don't get the qualification, then they would enforce
Or
You attend all lessons are a model pupil but fail by 1 percent, they not be the type of company I'd want to work for if they enforced the clause
Are you preparing to fail too?
Hi. I've worked in executive search for many years.
Back when I was working on more junior roles (mid-mgmt) companies would often apply this clause.
I've had people pay back training costs (usually on a sliding scale) for MBAs etc. Some of these ran to significant amounts - due to MBA retreats in Switzerland and USA.
In one area my clients were throwing cash at a particular area of training to meet European quality regulations in the Pharma sector. The two year course cost £40,000 and that's 10 years ago. The people that qualified were then immediately being offered big pay rises by their competitors - so moving to the competitor but having to pay back the £40k.
I can't recall a single incident re the above where the new employer did not compensate the new employee...basically here is £40-100k to pay directly back to your ex-employer.
Seen the same many time with relocation costs, sometimes running in to mid six figures.
Re the other points - we sold our company to a large USA firm and used TUPE process. They tried to alter things around expenses and a few other areas.
Our solicitor advised us not to sign until we were happy - any material changes to our contracts were red-lined.
Have you signed a new contract without taking advice from an employment specialist? Once you've signed it can be very difficult to argue your case.
Back when I was working on more junior roles (mid-mgmt) companies would often apply this clause.
I've had people pay back training costs (usually on a sliding scale) for MBAs etc. Some of these ran to significant amounts - due to MBA retreats in Switzerland and USA.
In one area my clients were throwing cash at a particular area of training to meet European quality regulations in the Pharma sector. The two year course cost £40,000 and that's 10 years ago. The people that qualified were then immediately being offered big pay rises by their competitors - so moving to the competitor but having to pay back the £40k.
I can't recall a single incident re the above where the new employer did not compensate the new employee...basically here is £40-100k to pay directly back to your ex-employer.
Seen the same many time with relocation costs, sometimes running in to mid six figures.
Re the other points - we sold our company to a large USA firm and used TUPE process. They tried to alter things around expenses and a few other areas.
Our solicitor advised us not to sign until we were happy - any material changes to our contracts were red-lined.
Have you signed a new contract without taking advice from an employment specialist? Once you've signed it can be very difficult to argue your case.
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