Employer Requesting Study Support Reimbursement After Resignation

[Alarae21]

Hello. Hoping someone would be able to calm my nerves and verify my interpretation of my contract and my liability to potentially paying back costs.

I will do a quick timeline of events. Please note I did not sign a study contract in the beginning of my employment despite being taken on as a trainee, this happened after.

Nov 15 - Started employment. Signed a permanent contract with normal terms.

Mar 16 - Signed a study agreement. This was a fixed term for two years.

Feb 18- Agreed to extend study agreement for six months, ending on 31 July 18.

Aug 18 onwards - HR has been promising me a new contract but hasn't yet. They tried to get me to sign a study contract extension but I refused- I have the unsigned document. My refusal is also in an email to HT, where I explicitly state I am continuing to work under the terms and conditions of my original permanent contract and not the study agreement. HR does not dispute thus.

Applicable clauses:

Permanent Contract:
"Subject to statutory protection the company reserves the right to deduction from your salary, any sums due to It including:

Any overpayments made to you.
Loans made to you by the company.
Any monies agreed by you on writing to be deducted."

(Other conditions but not applicable as about holiday, sickness etc)

Study Agreement:

As above, plus:

"The company expressly reserves the right to recover from you all costs and fees incurred by it within the previous 24 months if you give notice to cease employment or are dismissed either with or without notice at any time during the period of this agreement."

There is another clauses worded the same as the above about paid study leave.

Question:

Am I correct in my understanding that as I resigned outside the period of my study agreement, they cannot clawback the training costs nor study leave? I resigned in August, after the expiry. My refusal to continue on the study agreement is documented in an email, which I have saved a copy of in case of dispute.

As I explicitly stated I would continue working from August under the terms and conditions of my original permanent contract which they didn't dispute, they can't get me on implied term working?

Also, even though my original contract has a term to allow for deductions agreed by me, that they do not have my consent as it expired along with the study agreement (unless I agree to it now)?

Any help would be greatly appreciated.

[mariefab]

Well done for both writing the email to HR and saving a copy.

Unless you give your consent (lol), both the contracts support the view that they cannot recover any study costs and fees from you.

[Alarae21]

Thank you, that is what I thought but considering the sums involved you begin to doubt yourself. Obviously I'm more than likely I'll have to get a letter from a solicitor to give to work as they won't take my word from it, but I feel better about doing it if my view seems the correct one.

When they gave me these costs, management said they would normally deduct costs from final salary. I'm thinking I should write to HR and state that I would consider any deductions unlawful as they do not have my consent, nor the ability to do so under my contract?

Would this be okay?

"Dear XXX,

Further to my conversation with XXX on 30 August 2018, I am writing to advise I do not believe I owe any monies to the company. I do not give my consent to any deductions from my salary and to do so would be unlawful.

*Any attempt to do so will be referred to legal counsel.*

Yours sincerely,

Alarae21

*Not sure whether to put this in as it seems rather heavy handed. Plus I haven't got legal counsel yet, lol.*

[mariefab]

I don't think you'll need a solicitor for this. It really is a very straight forward matter.
As to your letter; I think it would be easier to simply lay it all out for them so that they can clearly see that they can't ultimately win this argument.

Would you like me to knock up a draft for you?
If so, can you tell me exactly what they've said recently about any intention/request/wish to recover these costs?
I ask because when you say, "When they gave me these costs, management said they would normally deduct costs from final salary." I don't know if you are talking about them giving it to you at the start of the study agreement, or if they have given it to you since you resigned.

[Alarae21]

mariefab That would be extremely appreciated if you had any spare time. The only reason I believe I may need a solicitors letter is due to the nature of the firm, as they have good connections to solicitors who would be more than happy to help them out on issues such as this.

In respect of the costs, the only mention that it would be deducted from my final salary was when they gave me the calculation of study costs I would owe. This was two days ago on Thursday, so about two weeks after I resigned. They phrased it as "normally we would deduct any owed study costs from your final salary, but as you won't have enough please go back to HR with your proposal on how to pay it off."

[mariefab]

The fact that they have solicitors available is good news for you. I'll be sure to refer to the relevant legislation in case they're not employment law specialists.

Just so that I'm clear on this; was the quoted phrase "normally we would deduct......" mentioned orally or in writing?

I'll draft something for you by Monday.

[Alarae21]

mariefab It was mentioned orally only. Management did forward me an email shortly after our conversation with the study cost breakdown attached (I received a hard copy in the meeting) and stated;

"I am confirming our conversation this afternoon [...].

I gave to you the schedule of study costs recoverable from you and asked you to consider how you wish to repay."

Nothing specific about deductions from my final salary was written, presumably as the costs they are seeking are far in excess of it.

[mariefab]

Dear XXX

In response to the email confirming that I'd been given a schedule of study costs and that I was asked to consider how I wish to repay:

I am currently working my notice period under my original permanent contract, to which I reverted after my study contract ended on 31st July 2018.

The potentially relevant clauses in this contract state:
"Subject to statutory protection the company reserves the right to deduction* from your salary, any sums due to It* including:
Any overpayments made to you.
Loans made to you by the company.
Any monies agreed by you on* writing to be deducted."

I am not aware of any overpayments or loans and there are no current written agreements permitting monies to be deducted.

From March 2016 until 31st July 2018 I was under a study contract. I expressly declined the offered further extension of the study agreement.

The study contract contained this additional clause:
"The company expressly reserves the right to recover from you all costs and fees incurred by it within the previous 24 months if you give notice to cease employment or are dismissed either with or without notice at any time during the period of this agreement."

If I had given notice to cease my employment or been dismissed, with or without notice, between the dates of March 2016 and 31st July 2018 the Company could have exercised it's reserved right to recover the study costs referred to in the schedule.

However, I tendered my resignation on ?? August 2018 i.e. not "at any time during the period of this agreement."
So, in the absence of an agreement authorising deduction or payment, I don't believe that I am liable.

The relevant statutory protection: the Employment Rights Act 1996 s.13(1) the Right not to suffer unauthorised deductions and s.15(1) the Right not to have to make payments to employer.


*I think that these need to be tidied up. I believe that deduction* should be deduct, It* should be it and on* should be in.

Hope this helps.

[Alarae21]

mariefab That is amazing, thank you. I will add in the sections to be clarified before I send the letter.

You have been a massive help. Hopefully this will put a stop to everything.

[Alarae21]

As expected, they have responded saying my argument is flawed. They are staying that as I continued to work for them and draw a salary, that the agreement is deemed to have continue.

Given the firm, I am genuinely not surprised. I've contacted a local solicitor and I will get them to respond. Even though I am happy I am in the right with no liability due, there is no way this firm headed by old school individuals will accept an argument from a young individual.

At least I know they won't take my final salary from me as they are asking for payment within 30 days.

I will keep everyone updated.

[mariefab]

*Your recent response could only be correct if I had not expressly informed you of my refusal to extend the study contract.

I did so in writing on x/x/x. Further I specifically added that I was continuing to work under the terms and conditions of my original permanent contract.
After I had done that that you permitted me to continue to work for you without disputing the content of my written notification.
Therefore, I believe that both in fact and law, you are deemed to have accepted that after 31st July the study contract ended and I reverted to my original contract.*

I suggest you send them that ^.

I can only conclude that they have not run this by their solicitors.
You really don't need to be put to the expense of a solicitor's letter for this. Particularly as they aren't going to deduct payment from your final salary.
So, if their request for payment could be taken as a letter before action their next available step would be a Court claim.
At that stage they would involve their solicitors who would, if given all the relevant documents, tell them that they are wasting their time.
If they were foolish enough to persevere you could send your documents to the solicitors.
If even that failed I'm sure that Amethyst could reformat the above into a suitable defense which, if any remaining sense prevails, should put an end to this matter.

[Alarae21]

Back again unfortunately...

To try and put this thing to bed I decided it might be a good investment to get a reputable employment law firm to send a letter to my previous employer and put this matter to bed. I thought everything had gone away as I didn't hear anything for a couple of months, until I received a letter via my solicitor in the New Year.

It appears that they have now instructed a solicitor within my area (employer is in a different county) to respond. It was dated Christmas Eve (how kind).

Essentially their solicitor has basically stated they do not accept the argument that my old employer agreed that the terms of my old contract would apply and the monies are due in full under the employment contract. They have advised that if they do not receive a repayment proposal within two weeks that they will instigate recovery proceedings.

In the letter addressed purely to me, they stated that the fees would be claimed in full however they would take a reduced settlement (approx 90%) as a full and final settlement.

Unfortunately I cannot afford the ongoing legal costs of my solicitor of what I imagine will be a "we say yes, we say no" back and forth, so I will have to take this forward myself. I might be able to get some form of guidance through my current employer (they have an assistance programme) however I doubt it will extend to actually appointing a solicitor.

Does anyone know if the recovery proceedings would be via an employment tribunal or small claims court (they are claiming above the 10k limit, so I believe it will be a formal hearing)? If the former I am comforted to continue, as I can see it is rare for the tribunal to award costs. If the latter, could they claim their solicitor costs if I lost?

[ULA]

I believe it would not be via the Employment Tribunal. If the claim is up to £10k it will go through small claims above that it will be fast track. If the latter then should you lose you would potentially be liable for the other side's costs.

Did the letter from your old employer's solicitor give any details as to why they did not accept the argument contained within your solicitors letter which I presume was on the similar lines as to draft from Mariefab? Did your solicitor believe that you had a strong case?

[Alarae21]

I believe it would not be via the Employment Tribunal. If the claim is up to £10k it will go through small claims above that it will be fast track. If the latter then should you lose you would potentially be liable for the other side's costs.

Did the letter from your old employer's solicitor give any details as to why they did not accept the argument contained within your solicitors letter which I presume was on the similar lines as to draft from Mariefab? Did your solicitor believe that you had a strong case?

Well that's troubling.

The solicitor I had instructed stated I had an argument for it, however she did mention it was a grey area as I was in a 'limbo' period as such. She did not mention at any point however that it was unlikely to succeed or there was little substance to the argument, so there must be some confidence there. I would not have thought that a reputable firm would make an argument they thought had no backing to it?

The letter from the other solicitor simply states 'that the assertions I am not liable to repay the training costs are not accepted and in particular, the assertion that it was agreed with [my old employer] that the terms of my initial contract with the firm would re-apply are denied in their entirety.'

[ULA]

I am sure that a reputable law firm with employment experience would have advised appropriately and raised with you any issues if they were doubtful of your case.

I do however have a couple of other question and thoughts having read through your thread and just trying to deal with this "limbo period":

1. In the document extending your study agreement until 31 July 2018, did it state the contract was ending on this date and/or that it was for a 6 month term from 1 Feb? Just trying to make doubly sure that it would be clear that the contract and its terms ceased to be binding on 31 July 2018.
2. The training agreement was this a supplemental to your permanent contract i.e. it ran alongside your permanent contract? If not did it say that the training agreement replaced/superseded your perm contract?
3. Were you given a new 6 month contract or was it an extension of the existing contract for six months on the same terms as originally signed?

More general questions to cover all basis I can think of them having grounds to say they do not agree with the assertions:

4. In the training agreement the only time repayment of training fees for the preceding 24 months would be due is if you left during the agreement, there was no sliding scale repayment due over a period of time after the agreement ceased I.e. if you left within 12 months of the training contract ceasing then you would be due to repay a pro-rate amount?
5. Was there anything in your permanent contract about repayment of training costs?