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Law for Business

Knowhow - guidance - precedents

22 OCT 2014

Training at a cost?

Pam Loch

Managing Partner

@LochLaw

Training at a cost?
As the economy improves many businesses look for ways to retain staff aside from simply giving them pay increases. One important way in which you can approach this is to have a development programme where key employees undergo training, sometimes by attending external courses.

The introduction of flexible working for all employees with more than 26 weeks service means that some employees are considering taking up part time studies which may help them gain a qualification like an Open University degree. Of course, whether an employer wants to agree to requests to enable this to happen is another issue.

However, there are many advantages to staff training where the employer either agrees to fund the entire training course or part of it. There are some downsides however in that the employer may take the view that they are investing in an employee who may be more marketable once they have their qualification. Consequently many employers may resist agreeing to fund part or all of the course on the basis they may be concerned that the employee will leave immediately after receiving the qualification. In other words the employer will have invested all the time and effort to encourage them as well as the funds to provide the training, only to lose out on the gain at the other end.

How does an employer avoid this happening? One way to do this is to engage with the employee and explain that while you will support them through the process both by allowing them to have some time off and/or by funding part or all of the course, in return you would be seeking an investment from the employee too. The employee in return would agree to enter into a Training Agreement which sets out a commitment to remain with the employer for a period of time after they complete the course or qualification.

The length of time the employee remains with the employer depends on the qualification and investment usually. For example, if it’s a three year training course then the period at the other end where the employee commits to remain with the employer is likely to be longer.

Fundamentally, an employer cannot force an employee to remain with them as an employee. Therefore, the Training Agreement cannot force the employee to remain with an employer but what it does is gives the employee less of an incentive to leave on the basis that if they were to leave within the period they have committed to remain, then they would have to pay back a percentage of the training course.

These Training Agreements should usually be standalone agreements. We recommend you have a Training Agreement for any training course an employee attends where you feel there is an investment you wish to secure a return on.

The Training Agreement itself needs to be carefully drafted and must specifically set out the costs involved so that the employee has been fully informed and is aware of the conditions on which they are entering into the training.

From the employer’s perspective, a number of considerations you need to consider are whether you want to exclude periods of absences on maternity leave or other leave. How much do you want to recover if the employee leaves within say 6-12 months after completing the training? These issues should be considered prior to drafting the agreement and ensure it is clear from the agreement exactly what the employer and employee are committed to doing.

If everyone is clear then there is no doubt it can be a win-win situation investing in training for employees.

If you need any assistance with drafting Training Agreements or would like any advice on this or on developing your employees, please me on 01892 773970 or by email at pam.loch@lochassociates.co.uk.

Pam Loch, Managing Director of niche employment law practice, Loch Associates Employment Lawyers and Managing Director of HR Advise Me Limited. For more information on Loch Associates Employment Lawyers please go to www.lochassociates.co.uk and for HR Advise Me, go to www.lochassociates.co.uk.

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