Company withholding final salary until training costs are paid.

[mmmatt]

Hi all,

Sorry for my first message to be a complicated ask - but I'm stuck and have no clue where to turn.

I've been with my current employer for 8 years. I joined in 2007 with a different company (Company A), but later "Company B" bought us out....two companies were merged and my original employer became defunct. "Company B" retained same name.

I've never signed a contract for "Company B".

Last year in order to secure a promotion I was forced to sign a "training fees agreement" for £3000.

Now due to personal circumstances I've resigned from Company B and am currently working out my notice period.

The company has now told me they will be withholding my final pay until I pay the remaining fees off.

My very very limited knowledge of such things is that bonds of this sort need to be a true reflection of costs paid by the company and at the very least they need to justify where that figure has come from.

The paper I signed only mentions the £3000 as "being the maximum amount payable by the Company for the training"

Emailed my manager at work for clarification as to where this magic £3000 figure comes from and if there's an itemised cost I can see. It seems to me that the £3000 figure has literally just been pulled from the air with no real substance!

His reply - "I don’t believe the values are negotiable or that the company would enter into discussion about them, I’m afraid."

Any advice or where to start with anything would be fantastic.

[Kati]

Re: Company withholding final salary until training costs are paid.

[MENTION=19071]teaboy2[/MENTION] ... one for you maybe??

[des8]

Re: Company withholding final salary until training costs are paid.

Hi and welcome
Whilst awaiting Teaboy's arrival you might like to read this recent thread about a similar situation http://www.legalbeagles.info/forums/...=training+fees

[mmmatt]

Re: Company withholding final salary until training costs are paid.

Hi Des8,

Thanks for the reply. That sounds like an all too similiar situation.

Very interesting use of "rounded figures" and "not actual costs", I too am very suspicious of how this figure is arrived at!

Coupled with my manager flat out refusing to even enter into discussion about said figures, I feel very much the onus is on the company to invoice and prove cost.

I did omit something in my haste however. My training agreement was for £3000, but it decreases every end calendar month by £250 (e.g. to be paid off in a year)

Well, I say paid off. Nothing is paid. The company spent no real extra money and most of my training was on the job!

I'm in the same boat as "usuallywin". I am really limited to what I can say due to work policies and "bringing the company into disrepute" and I really don't want them to make things difficult for me with new company!

[mmmatt]

Re: Company withholding final salary until training costs are paid.

Quick update, just had an email through from my manager.

He states - "I don't believe the company is obliged to provide a breakdown of the composition of the original bond."

Is there a specific piece of employment law or legislation that states they must?!

[des8]

Re: Company withholding final salary until training costs are paid.

If the company policies are such, that discussing them brings the company into disrepute, I would suggest they are shooting themselves in the foot! but I understand where you're coming from.
I believe with holding your final payment is illegal (Teaboy will give you the details) and you might need to go via ACAS or County Court to get your money.
If you refuse to pay the o/s training fees, they would have to sue you (small claim.. limited costs) and justify the amounts to the court, so they would have to supply a breakdown.

[teaboy2]

Re: Company withholding final salary until training costs are paid.

Hi all,

Sorry for my first message to be a complicated ask - but I'm stuck and have no clue where to turn.

I've been with my current employer for 8 years. I joined in 2007 with a different company (Company A), but later "Company B" bought us out....two companies were merged and my original employer became defunct. "Company B" retained same name.

When you say they retained the same name do you mean trading name or registered limited company name? not a vital question but it helps figure out if both companies were connected prior to the merger by a director/ownership etc.

I've never signed a contract for "Company B".

You wouldn't need to as your original contact with Company A was transferred over to company B as well as yourself. In effect, company B bought your employment contract from company A (not the exact definition, but the easiest way to explain it)

Last year in order to secure a promotion I was forced to sign a "training fees agreement" for £3000.

Please provide a copy of this so we can see the precise terms and conditions of what it was your signed, as well as the date in which you signed.

Now due to personal circumstances I've resigned from Company B and am currently working out my notice period.

The company has now told me they will be withholding my final pay until I pay the remaining fees off.

Breach of section 13 employment rights act 1996 - they can not make such deductions without your written authorisation - It would also be unreasonable to take the full amount from your final pay in any case. The best practice for any employer is to agree a repayment plan which the employee must keep to even after employment has terminated. Write to the manager stating you do not agree to any such deductions from your final pay, and any authorisation given previous, or that they think they were given is now rescinded - Keep copies of all communications too for future reference and possible evidence.

My very very limited knowledge of such things is that bonds of this sort need to be a true reflection of costs paid by the company and at the very least they need to justify where that figure has come from.

You are correct, they can only recover their actual costs they incurred for training you, they can not make a financial gain by recovering back more than what they actually spent. Hence why the onus is on them to disclose the true costs they incurred and to give you a break down of said costs. They would have to do precisely this if they were claiming money owed by you in a court claim.

The paper I signed only mentions the £3000 as "being the maximum amount payable by the Company for the training"

Emailed my manager at work for clarification as to where this magic £3000 figure comes from and if there's an itemised cost I can see. It seems to me that the £3000 figure has literally just been pulled from the air with no real substance!

His reply - "I don’t believe the values are negotiable or that the company would enter into discussion about them, I’m afraid." What a useless pr*ck! Theres nothing to negotiate, as your asking for a break down of the true costs incurred by the company for training you.

Any advice or where to start with anything would be fantastic.

Quick update, just had an email through from my manager.

He states - "I don't believe the company is obliged to provide a breakdown of the composition of the original bond."

Is there a specific piece of employment law or legislation that states they must?!

No but if they do not provide an accurate and true break down of costs, and instead take a number from the air that does not reflect the true and accurate cost of your training. Then it becomes a penalty in law, and the term in the contract/agreement referring to your paying back said fees would be invalid and can not be enforced in court.

Hi Des8,

Thanks for the reply. That sounds like an all too similiar situation.

Very interesting use of "rounded figures" and "not actual costs", I too am very suspicious of how this figure is arrived at!

Coupled with my manager flat out refusing to even enter into discussion about said figures, I feel very much the onus is on the company to invoice and prove cost.

I did omit something in my haste however. My training agreement was for £3000, but it decreases every end calendar month by £250 (e.g. to be paid off in a year)

So how many months ago was it when you signed the agreement as you said above it was last year. Based on 12 months of deductions of £250 from the total of £3000 you would owe 0 as 250 x 12 equal £3000! Yet they are after the full amount of £3,000 from you am i right?

Well, I say paid off. Nothing is paid. The company spent no real extra money and most of my training was on the job!

I'm in the same boat as "usuallywin". I am really limited to what I can say due to work policies and "bringing the company into disrepute" and I really don't want them to make things difficult for me with new company!

See above highlighted in red!

You may PM (private message) me if you wish to discuss sensitive work policys privately.

P.S when posting up a copy of the agreement you signed along with it terms and conditions, please censor out your personal details and that of the company. but keep date you signed visible or PM the date you signed the agreement to me if you prefer.

[mmmatt]

Re: Company withholding final salary until training costs are paid.

Have PM'd you the contract Teaboy, thank you again for your help. I really appreciate it!

[teaboy2]

Re: Company withholding final salary until training costs are paid.

Having read through it. They £3k is the maximum amount an employee maybe expected to pay back.

If the employee resigns within 12 months of the date of completion of the training the employee will be expected to pay costs minus any reductions - The monthly reductions being worked out as 1/12 of the cost of training.

Yes consent was given to deduct it from final salary.

However they are now claiming OP owes x amount after deductions and are now given OP a form to sign to consent to the deduction of £x amount, accompanied with that was a threat to withhold his full final pay until either OP consents to the deduction of pays the £x amount directly to them!

Now there is not details as to true or actual costs of the training in the agreement, just that £3K is the maximum the employee may have to pay. I do not think their is any room in the agreement to give Contractual Consideration as its unknown as to actual costs and therefore unknown as to what the employee would have to pay at any given future date, should he resign within 12 months of completing the training.

Correction:

The 3k mentioned in the agreement was the maximum amount payable by the company for training. Therefore actual training cost could have been anything from £1-£3K there is no break down as to how the £3k estimate was reached!