Hi, I know its a difficult question, and maybe one that I should be asking and actually paying for advice.

Its for a friend of mine that is leaving his current job, and there is a Clause in his contract that states:

--------------------------------------------------------
Where a member of staff has been offered training facilities to gain a recognised qualification they should remain with the company for 2 years from the date the qualification is obtained or the company will require full repayment of any financial assistance provided.

If he/she leaves the company for any reason (except redundancy) during the period of study then the company will require payment of any financial assistance provided, less one twenty-fourth for each complete month worked.
--------------------------------------------------------

Now the company are asking him for the costs involved in training him for the course, the costs involved in booking the course and course fees, and the repayment of a £250 Bonus that was given to him for passing the course.

My question, legally does he have to pay everything they are asking or is there a technicality in the above statement that will allow him to avoid payment?

Any advice would be truly appreciated.

im not familiar with uk law (or us for that matter), but my interpretation of the clause leads me to believe he gets to keep the 250 bonus for passing the course and doesn't need to pay for the training as he was not provided financial assistance....

the "Bonus" I would have thought would be excluded from "financial assistance" since its not really assistance, more so a "well done for passing"

anyone else got any thoughts? or would it be possible to have am IM or ICQ conversation with you akash?

Come on people, someone else must have some input, even if its not UK, im sure this will apply world wide.

With the usual warnings about seeing a solicitor I'll give you my view on this. I've spent many a happy hour fighting with clueless employers. Croners is my friend (look it up).

The £250 bonus should NOT be paid back. This is not part of the deal, it is a separate payment and has nothing to do with any training/financial assitance for training.

The company does have a right to deduct the money from any payments made. However, if they have paid the money to him, and are trying to get it back then they might have a problem.

Legally, he is obliged to pay it back, but he has 2 things that might be in his favour. I'll point out at this time that this is a common clause in contracts and isn't illegal.

1. Is it the company policy to ALWAYS take back this money. If the "take back" has been discretionary then he might be able to claim that the company policy was not to enforce this. Tough one.

2. If he has already received his P45, and has been paid his final salary then he could claim that the actions of the company led him to believe that the last payment he received was final and all payments made to him/due by him had been complete. Because of the companies actions he has now spent this money is good faith and doesn't have the money any more. This is called something like right of estoppel - which is a right under common law.

They will probably want to try to recover the money from him because a mistake was made. If they made an administrative error then it is very difficult for them to recover the money - particularly if they admit a mistake was made.

He'll probably get a nasty letter from a solicitor but that depends on his willingness to tough it out and be equally nasty in return. He is obliged to pay this money back, but if the conduct of the company has caused him to believe that all payments were final and he spent the money in good faith, then they don't have a case. Have a look in Croners (http://www.croner-uk.co.uk) for contract termination - this case should be available online

I had a quick look. Here's a cut and paste

12. MISTAKEN APPLICATION OF TERMS OF EMPLOYMENT: OVERPAYMENTS OF SALARY OR WAGES MAY BE IRRECOVERABLE
If an employer represents to an employee that the amount of salary paid is the correct amount, when in fact the amount is incorrect, any overpayment can only be recovered if the overpayment was due to a mistake of fact. If the overpayment was due to a mistake of law then the overpayment is not recoverable.

From : Employment Case Law Index
More details and pricing options

13. DEDUCTIONS FROM WAGES: OVERPAYMENTS
The right to make deductions from pay in respect of overpayments is subject to the defence of estoppel. In 1988 Mr Ayres was overpaid £830.

From : Employment Case Law Index
More details and pricing options

14. DEDUCTION FROM WAGES: REIMBURSEMENT OF EMPLOYER FOR OVERPAYMENT OF EXPENSES
Where an employer has deducted amounts from wages to reimburse for overpayment of expenses, the employment tribunal does not have jurisdiction to decide the legality of such a deduction. Mr Swinn, a general handyman, was dismissed after his employer discovered that he had been dishonestly claiming expenses.

From : Employment Case Law Index
More details and pricing options

15. Questions and Answers
If an employer overpays an employee one month, can this be deducted from their wages the following month? The employer must first be able to prove that the overpayment in question is recoverable according to common law principles.

From : The A-Z Guide to Managing People
More details and pricing options


Do a search on Termination. Then filter the results by "Overpayment". You might then need to visit a library to get the actual case files.

;) The person agreed to the terms of the contract upon signing it and so then should be held bound to that obligation. If he performed the majority of service for the provider they may want to be lenient but that is their choice! I agree that the terms of the contract seem restrictive but as a prior owner myself we may not have all the facts as to why the contract was written that way.

Hi PJamie, your reply is truly appreciated.

Just to clarify a couple of things I may have missed from the original post.

The employee is currently at the company and will be leaving in October, he is currently awaiting his P45 and has not yet had his final payslip.

Im thinking about the term "Overpayments" and wondering if this it appropriate, since the payment was made deliberately for his training, unfortunately it was not paid directly to him but to the training organisation for his exam fees (the exam was an MCP).

Originally posted by xtstrike
Hi PJamie, your reply is truly appreciated.


No problem. An enduring interest in Employment Law has made my mind a junkyard of useless information


The employee is currently at the company and will be leaving in October, he is currently awaiting his P45 and has not yet had his final payslip.

Tougher, but there are possibly ways around this.


Im thinking about the term "Overpayments" and wondering if this it appropriate, since the payment was made deliberately for his training, unfortunately it was not paid directly to him but to the training organisation for his exam fees (the exam was an MCP).

I don't think he will get out of paying it that easily. The first, and possibly the most difficult, is a definition of "Financial Assistance". Since the company paid for his training it can hardly be deemed financial assistance, but you'd need to get a solicitor to check it out.

The other thing is legal deductions from a payslip. The ONLY deducations an employer can legally deduct from a payslip are statutory deductions (PAYE, NI, etc). The CANNOT recover overpayments, incorrect payments etc unless the employee agrees and/or a mistake of fact was made. If it was a mistake of Law then that is a different matter.

The contract may say that he is "require[d]" to make repayment but I'd argue, quite strongly, that the terms of this payment have not been defined and that employer has no right to deduct these expenses from his final salary. In fact, if the employer DOES deduct the amount from his salary then they are probably breaking the law. He could probably pursue them for Unfair Dismissal if they did so. It's also possible that if they did this then it would be automatically unfair and he wouldn't be under any obligation to prove it - it would be up to the employer to prove that it wasn't unfair.

I don't think he will get out of paying it - ever - but he might be able to negotiate terms of repayment that are more suitable to him.....£1 a month until it is paid off. I'm repeating myself, but unless it is in the contract, or unless he has agreed, I'd doubt that the company could deduct the amount due from his salary cheque. Also, if he doesn't agree to the deduction being made from his salary, and they say that they won't pay him, then they are encroaching on the automatically unfair playground again.

Remember, the circumstances of his leaving are irrelevant. IF the company breaks the law in any way then they are in for a nasty shock if your friend is willing to pursue them and his solicitor isn't a wuss who thinks that you should negotiate at every turm.

Hope this is useful. I'll dig out my latest copy of Croners and see if I can drag up any juicy scenarios for you.

Thanks for following this up, I have forwarded the guy to this site it will allow him to make his own decisions of how to persue things.