CG23:21

Training Costs Agreements

Introduction

The purpose of this guidance note is to identify factors to consider when seeking to reclaim any part of the
cost of work-related training incurred by the employer in respect of an employee who is leaving employment,
other than for redundancy, relatively shortly after the provision of training.

The training of an employee has both a significant benefit and a cost for an employer.

The benefit of training is immediate for an employee on completion of the training; it may even give them
an employment enhancing qualification, whereas for an employer the benefit comes from the employee
remaining in employment for a reasonable period of time after completing the training so as to make an
ongoing contribution to the business.

There is no automatic right for an employer to recoup training costs from an employee.

However, provided the employee gives their formal written consent for an employer to recoup training costs,
an employer may reasonably require that an employee accepts as a condition of undertaking the training,
to repay all or part of the reasonable cost of their training, in the event employment ends within a stated
period of time after the training. There are no hard and fast ‘rules’ about what is ‘reasonable’ and in the event
of any dispute an Employment Tribunal will decide.

Indications as to what an EmploymentTribunal may regard as ‘reasonable’ have been given over time, although it
should be appreciated every case is decided on individual facts and circumstances. Broadly, the employee must
formally agree in writing in advance of the training, the cost must be based on the net cost to the
employer, (i.e. less any grants), and the sum for deduction must be clearly specified and must decline over a
stated time period.

A further factor is legislation which prevents ‘unlawful deductions from wages’. Any sums sought to be
deducted by an employer need to be individually specified and formally agreed to in writing by the employee
before any deduction takes place.

To reclaim monies from an employee for training costs,having a specific agreement for specified sums relating to
a specific individual training course, completed before the training takes place is regarded as good practice
and very important should a subsequent dispute concerning deductions from pay arise.

Adopting such a system has resulted in Members being successful at law in reclaiming specified training costs.

Additionally, from April 2020 legislation is extended to require employers to notify additional key information
about a number of employment related items to employees, (and workers), this includes giving more detail
about training provided by the employer and any conditions attached to the provision. Consequently it is
important that if an employer opts to use Training Cost Agreements that fact and the basic details, including
conditions, are now included in the employment contract and the issued Written Statement of Particulars of
Main Terms of Employment.

A draft pro forma, ‘Training Costs Agreement’ is attached (as an indication only), which may be
helpful in deciding what may be appropriate for your business.

To be read in conjunction with CG16:21 Employment Contracts.

NASC July 2021

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 Example

TRAINING COSTS AGREEMENT

SECTION 1 – CONFIRMATION OF TRAINING COURSE

1. This is to confirm the following course allocation

EMPLOYEE NAME:

COURSE TITLE:

DATE(S):

SUPPLIER/LOCATION:

Prior to the training commencing it is a requirement for the employee to formally agree,by signing the Agreement
below, confirmation of their acceptance of the conditions on which the above training is offered and will be provided by
the Company.

A copy of this Agreement will be retained in the employees file.

A separate Training Costs Agreement will be required/apply for each training course offered

SECTION 2 – TRAINING COSTS AGREEMENT

The actual cost to the Company for you to attend the above training course is £    , excluding your normal
remuneration and any grants received by the Company. You benefit by obtaining better skills and consequently job
opportunity. The Company will only benefit if you continue to work for/contribute to the Company for a reasonable
period of time after your training is completed. Therefore, a contractual condition for you attending any training course
funded by the Company is that you agree (and sign to confirm your agreement) that the following conditions will apply:

1. Should my employment with the Company cease, for whatever reason (other than redundancy), within 26 weeks
from the date of start and/or completion of this training course, I agree to repay the Company 100% of the cost of
the training course, the sum of £    . I also agree to the deduction of this sum from any monies outstanding/
owed to me by the Company (remuneration/holiday pay etc.) and/or if insufficient funds are available any shortfall
will be made up from my personal funds and repaid to the Company within 14 days of termination, failing which the
Company may recover such sum as a debt.

2. Should my employment with the Company cease, for whatever reason (other than redundancy), after 26weeks and
within 52 weeks from the date of start and/or completion of this training course, I agree to repay the Company 50%
of the cost of the training course, the sum of £    . I also agree to the deduction of this sum from any monies
outstanding/owed to me by the Company (remuneration/holiday pay etc.) and/or if insufficient funds are available any
shortfall will be made up from my personal funds and repaid to the Company within 14 days of termination, failing
which the Company may recover such a sum as a debt.

3. Should my employment with the Company cease, for whatever reason (other than redundancy), after 52 weeks and
within 104 weeks from the date of start and/or completion of this training course, I agree to the deduction of 25%
of the cost of the training course, the sum of £    . I also agree to the deduction of this sum from any monies
outstanding/owed to me by the Company (remuneration/holiday pay etc.) and/or if insufficient funds are available any
shortfall will be made up from my personal funds and repaid to the Company within 14 days of termination, failing
which the Company may recover such a sum as a debt.

4. I understand that there will be no repayment to be made should my employment with the Company cease, for
whatever reason, after 104 weeks from the start and/or completion of this training course.

EMPLOYEE NAME:

Signature: Date:

Whilst every effort has been made to provide reliable and accurate information, we would welcome any corrections to information provided by the author which may
not be entirely accurate, therefore and for this reason, the NASC or indeed the author cannot accept any responsibility for any misinformation posted.
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