How to Use a Training Fees Agreement

Providing training, particularly externally recognised qualifications for employees has many benefits to both company and employee. As an employer you will want to ensure you’re getting the return on your investment. Whilst you cannot force someone to remain employed, you can incentivise them by recouping the costs of training should they leave soon after or even during the course.

What is a Training Fees Agreement?

When an employer wants to be able to recoup the costs of training from an employee who leaves soon after completing training, there must be a training fees agreement in place.

This agreement is an addendum to their contract and must:

• State the name of the course being provided
• State the cost to the employer and therefore the maximum amount that can be recovered
• Use a sliding scale of refund, e.g. over a 2 year period
• State that costs can be recovered by a deduction from final salary if an employee leaves

A training fee agreement must be entered into prior to the training starting, a retrospective agreement cannot be relied upon for a lawful deduction from wages.

When Can a Training Fees Agreement be Used?

Training fee agreements are usually used for courses that will provide benefits to the employee as well as the employer. It can only be used to cover actual costs to the employer, a training fee agreement cannot be used for internal training.

A training fees agreement must be entered into freely by both parties, this does not prevent the employer making it a condition of doing the training - however, it does mean the employee should be free to decide whether they want to do that course and therefore sign the agreement.

A training fee agreement cannot therefore be used to cover compulsory training such as healthy and safety courses.

If you’re considering any particular training essential to your business and do not want an individual to opt out then consider carefully whether a training fee agreement is appropriate. We strongly recommend considering the test of how valuable the course is to an individual’s value on the job market, the training doesn’t add value then a training fees agreement is unlikely to be the right thing to use.

Can we Deduct the Money Owed From Wages?

Where a training fee agreement has been signed covering the four elements listed above, crucially clearly stating that the money can be recovered by a dedication from wages then the employer can deduct money from the final salary.

We recommend writing to the employee prior to them leaving to confirm any deductions that will be made from their final salary. This can be done in a letter confirming their resignation.

Article last updated: 28 June 2022