We are constantly asked by members about their rights in relation to recouping the costs of training where employees leave after gaining a qualification or fail to complete a course.
There is legislation that sits around this with regard to making lawful deductions from an employees pay so let’s go over some basics.
First of all it is unlawful to make any deductions from an employees pay for any purpose without their written authority to do so.
Deductions for the benefit of an employee are generally supported by legislation conversely deductions which benefit the employer are not.
This includes the employer making deductions for any overpayments that may have been made to an employee in error – UNLESS the applicable Award authorises this – and many do. Regrettably many do not which means that employers either try to reach a mutual agreement with the employee or seek redress through the Courts.
The provision of training and the costs associated with this prove problematical for many employers who make huge investments in time and money for staff only to see them move on after they get the qualification.
This is a risk that all businesses run – the attitude of ‘why should I train my staff – they will only leave’ is both negative and short sighted in today’s competitive market. The reverse of this position is ‘if I don’t train my staff they may stay’.
There are three pivotal questions here:
- Who benefits from the training? And
- Is the training for a qualification that is a requirement of the job? And
- Has the employer directed the employee to attend the training?
Where the ‘employer’ benefits from the training provided and where 2 and 3 above are in play then the employer has no capacity to demand repayment of training costs. However where the training is ‘optional’ and particularly where the training could reasonably be said to be part of personal development for the employee, then the employer has more options in controlling the conditions around which the training is supported.
In any event we would not recommend that the employer seek to make ‘deductions’ from the employees pay – which would be likely deemed to be unlawful – but rather PRIOR to the provision of training, the employer enter into a ‘training agreement’ with the employee – signed and dated by both parties – where the employee agrees to repay the costs of training upon presentation of an invoice or invoices from the employer if they default on the training requirements or exit the employer’s employment within a given time frame of course completion.
The agreement would make clear the conditions that underpin the funding of any training provided and also provide support to any subsequent claim through the Courts if the employee then defaulted on any payment required under the Agreement.
The employer may then place some provisos upon the training which may include failure to attend training session without just cause, failure to complete the course or leaving employment within a set period of time.
The simple reality is that all employers face some level of risk that employees will choose to terminate their employment and move on to another employer. However in today’s competitive market it is critical that your work force are ‘up skilled’ in order that your Orgnaisation may drive a ‘competitive edge’ and ensure high quality service levels. The risk of not training staff – in our opinion – vastly outweighs any risk that newly trained staff may leave. The ongoing provision of low or no cost training to staff remains a key indicator of ‘best practice’ and acts as a reason why staff choose to stay rather than leave.
With regard to the provision of mandatory training – which forms a requirement of the employee’s role – it is important that this aspect of training involvement and successful completion be included as part of the JDF or Duty Statement of a role. It follows from this that one KPI would include the successful completion of required training and skills development as this forms a key competency and failure to complete may ultimately lead to the termination of the employee’s employment based on lack of competency.
Need more information? Call us on 9792 4451 to discuss.