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Why You Need Training Agreements

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Why You Need Training Agreements

Why You Need Training Agreements

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Most employers provide some sort of training for their staff, some of which can be very costly.  If you have concerns about an employee leaving the business either during the training or on completion of the training then having a training agreement could help you to ensure that you, the employer, are protected.

If you legally want to claim back money for the cost of the training if an employee leaves then you will need a training agreement. You cannot just rely on a deductions clause in the employment contract.

Key points

If you are going to use a training agreement then I recommend the following:

  • To be able to recover training costs from an employee who leaves during or shortly after training you need to have a written training agreement in place before the training starts.
  • The training agreement should be a separate document from the employment contract. You can’t just rely on a clause in their employment contract.
  • This agreement should be in writing and given to the employee alongside a clear explanation of what it means. You should make sure you have the employee’s consent to this agreement by ensuring they sign it.
  • Explain why the repayment is necessary.
  • Set up a sliding scale repayment. This means that the employee will repay all, or a proportion of, the money that you have invested should they choose to leave after completing the training. The most effective way to do this is to decide on a staggered system of claw back whereby the amount to be repaid by the employee decreases with time until a certain period has lapsed after which no repayment is due.
  • You can calculate your own schedule of repayment with regards to how the money is clawed back. Most training agreements usually stipulate a repayment of 100% of the training costs if the employee resigns within 3 months of completing training; 75% repayment after 3 – 6 months; 50% after 6 – 9 months and 25% after 9 – 12 months. After 12 months, no repayment would be due.
  • Ensure the figure to be repaid is an actual reflection of fees paid and not just an arbitrary sum. If it’s not a true reflection of the cost then it may be seen as a penalty and therefore be unenforceable.
  • Ensure there is a clause in the training agreement to allow you to make deductions from wages from the employee’s final salary in respect of any outstanding training fees if he or she leaves.

Need help with a training agreement?  Give us a call on 01980 622167 or email people@jmassociates.org

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