Employers need to be aware of investing in employee training costs and how to ensure employees remain in the company for a reasonable period of time to ensure the company benefit from its investment.
To develop your business, it is important to invest in your employees training. Staff will gain experience, qualifications, and skills. Both the employer and employee will benefit from the training. Employers should be mindful that such an investment in their staff needs to be protected by having an effective training agreement. Training employees can be a costly investment. The risk is if you fail to provide a training agreement and the employee leaves shortly after completing the training. Your loss could be your competitor’s gain!
So, what is a training agreement and how will it protect the employer? The training agreement is a contract between the employer and employee defining the terms on which the training is given to the employee. A training agreement should state the cost of the training and who will be paying for the training. Where the employer contributes to the cost of the training the agreement will provide an agreed repayment plan in the event the employee was to leave after completing the training. Such repayments should be made on a sliding scale. Basically, the longer the employee remains with the employer the less is repaid. The contract should be accompanied by a right to deduct money from the final salary of the employee.
A training agreement will be a valuable to protect your business investment in your staff. Smaller employers will be protected as it will enable them to recover the money employee and reinvest it back into the business.
Without a training agreement the employer will not be able to recover training costs. Making a deduction from an employee’s wage without the employees’ consent will result in an Employment Tribunal Claim for unlawful deduction of wages.
The training agreement must be drafted reasonably to avoid the repayments being interpreted as penalty clauses. Its purpose it to protect your investment in training but not to retrain staff from leaving the business. The repayment scale must be proportional. The longer the employer stays with you the less the loss will be you as a business. Employee can present a claim to an Employment Tribunal to have the training contract assessed for its enforceability.
Where attendance on a training course is a contractual requirement in connection with the worker employment. Any charge made by either a deduction or payment will reduce National Minimum Wage pay since the amount is an expense incurred in carrying out the employment.
A carefully drafted training agreement will protect your investment in your employee and keep you out of the Employment Tribunal. Quest can assist you in producing training agreements and other HR documents. Should you wish to discuss any employment issue please contact the Quest Advice Line.
