Training clawback dispute; vague agreement details

[Siytek]

Hi All,


I would really appreciate some advice on the following case, whereby I am in a dispute with my current employer over a training clawback.


I signed an agreement prior to beginning my HND Engineering course whereby I am obliged to pay back the course fees if I leave within 2 years. I accepted another job offer a couple of weeks after completing the course simply because my currently employer is paying five figures short of the average salary for the position I hold and was not open to negotiate my salary.


The agreement is of the usual nature, with a clawback that reduces in stages over a 2 year period. I am not necessarily disputing paying back in full, however the agreement states that if the balance cannot be paid in full then a monthly payment structure should be agreed. I must mention that the agreement does differ from what seems to be commonplace, in that there is no mention of any figures whatsoever. It does not specify the total fee payable (the course cost) nor any other figure such as a repayment timescale or minimum monthly repayment. It is left open to suggestion and simply states that an agreement must be made to pay back on a monthly basis if the balance cannot be paid in full.


My problem is that I have reached a stalemate after making what I believe to be a reasonable offer based upon what is stated in the agreement, and a figure that I can afford to pay. They are demanding that I pay back 4 times the amount that I suggested per month and are threatening court action if I do not agree. I cannot really afford to pay back the amount they want per month, therefore I am left in a position where I will either need to go to court or make arrangements such as take out a bank loan to pay them.


Therefore I am seeking advice as to where I stand and whether or not I should be looking to pursue this case in court.


Thanks in advance!


Simon

[Kati]

Re: Training clawback dispute; vague agreement details

tagging [MENTION=51026]Ula[/MENTION] [MENTION=26290]mariefab[/MENTION] xx

[Siytek]

Re: Training clawback dispute; vague agreement details

Thanks Kati

Just a quick update on this, I've just been told by them that they are going to deduct a grand from my wages this month

[Amethyst]

Re: Training clawback dispute; vague agreement details

How much was the course? ( presumably they have disclosed that now you have been negotiating repayment terms ?)

How are they going to deduct money from your wages if you have left the company ?

[Siytek]

Re: Training clawback dispute; vague agreement details

Hi Amethyst, thanks for a quick response. I am working my notice period and have 4 days left, therefore I have one paycheque to go from them before I start the new job.

The fees are a total of £5500, the college initially invoice the student at the start of the course but provide a letter for the employer to sign, which transferrs responsibility of the payment to them. This was all completed and the company have paid the full balance nearer the start of the course.

Thanks,

Simon

[Amethyst]

Re: Training clawback dispute; vague agreement details

Ahhh that makes more sense then.

Do you have your contract handy and can you post up the clause they are relying on. Does it directly specify deducation from salary ?


Like this

If the employee’s employment is terminated as a result of the employee’s misconduct or at the employee’s own request within six months of their date of commencement, the employer reserves the right to recoup these costs in full from the employee. This will normally be by deduction from the employee's final pay or any other monies due to the employee.”

then on to the sliding scale bit ?

So they are wanting £1000 per month ongoing for 5 months then £500 in month 6 ?

How much do you get paid? ( I believe it's been settled that a deduction thats contractually agreed, and instigated through your own action ( resigning ) is allowed now to take you below minimum wage, so may not be relevant, but I could be misguided there umm [MENTION=51026]Ula[/MENTION] [MENTION=26290]mariefab[/MENTION] )

[Siytek]

Re: Training clawback dispute; vague agreement details

Basically I offered 100 a month to which HR initially agreed on, however the MD refused and said they wanted 400 a month. I refused and we reached a stalemate.

As no agreement has been made, they are deducting 1000 from my salary and will take me to court for the rest.

May be able to attach the agreement when on laptop later but I'll try outline what is said, note there are no actual numbers given:

"should you choose to leave the company within 2 years of the completion of above course, the following repayment terms will apply:

[clawback info here, 6 months is 100%, 12 months is 75% etc]

Under the provision of this agreement, the company reserve the right to deduct the above monies from any monies due to you at the time employment is terminated.

If insufficient funds are due to meet the reimbursement of training costs at the date employment is terminated, a repayment scheme will be agreed between the company and the employee prior to the termination date to take account of the outstanding balance of training costs due.

I accept the terms of the agreement for the company to sponsor my studies

[signature]"

[ULA]

Re: Training clawback dispute; vague agreement details

The clause outlined as you gave in post #7 allows your employer to deduct monies from your final salary to cover the repayment of your training costs and [MENTION=6]Amethyst[/MENTION] is correct that as you have resigned they do not need to take account of the National Minimum Wage.

The problem then arises in that since no agreement was put in place at the time as to what the repayment terms will be there is the reliance on the "repayment scheme being agreed between the company and the employee".

Is there any way that you can afford to pay a bit more say £187.50 over two years. My reasoning is that if they deduct 1,000 from your final salary this leaves 4,500 owing if you can pay this back over two years you can logically argue that this is the same period of time as the period in which they have a claw back policy. It also shows that you are willing to make some movement to reduce the time it takes to repay the money in the hope of avoiding you and them the aggrevation of going to Court.

[Siytek]

Re: Training clawback dispute; vague agreement details

Hi Ula, many thanks for your response, really appreciate it! Following some advice from a family member I was actually considering making an offer of 150 per month in order to showing willingness to move on my initial offer. Your idea about matching the time of 2 years for the clawback is interesting and sounds very fair and in line with the agreement. Going above 100 will start to push my boundaries but its not entirely out of the question and I can certainly consider it if it will avoid court proceedings.

I believe one of the key pieces of missing information from the agreement is the details of the proceedings should an agreement not be met. My employer has failed to specify and is now demanding 400 a month, which I cannot afford.

I am also curious about whether or not a pre-estimate should have been conducted? As the employer has almost certainly benefitted financially through my gaining of knowledge, surely the amount repayable should be offset accordingly?

These clauses can be valid, but the amount the Employer asks you to repay must be a genuine pre-estimate of the damages/loss which the employer has (or will) suffered, otherwise it will be known as a ‘penalty’ against the employee which is unenforceable. In determining the amount the employee needs to repay the Employer must consider what benefit they have received from the employee undertaking the training and whether the employee would have any knowledge of the amount of the cost they are being asked to repay. https://www.crunch.co.uk/blog/small-...om-your-pay-2/

[Siytek]

Re: Training clawback dispute; vague agreement details

They would not budge from repayment inside of 1 year and I don't think I can cope with the legal battle on top of my new job so I have had to submit to their demands and will end up with 350 a month to pay, taking into account the deductions they made from my wages.

I wanted to quit my second job in order to give full focus to my new career but looks like ill have to manage for a little longer, at least it can be paid and forgotten in no more than a year. They are haemorrhaging six figures a month anyway, I won't loose any sleep when they fold!

Thanks so much for the advice