News & Views

Training fee clawback schemes in the spotlight

AM
BY Anita Mulholland
Employment law

The practice of requiring employees to pay back training fees on termination of employment could be in jeopardy if a legal challenge facing Capita and FDM Group is successful. Former employees have indicated that they intend to sue, claiming that the companies’ practices of charging up to £20,000 in training fee clawback is unlawful.

Both companies operate similar clawback schemes under which employees are required to work for two years once their training period has come to an end. Such schemes are potentially open to challenge on the basis that they are an unlawful restraint of trade, particularly if charges do not decrease over time.

The Government’s Business Secretary has been urged to launch a public inquiry into the practice by Frank Field MP, who described such arrangements as "trapping vulnerable workers in a particular arrangement over an extended period of time regardless of whether they need to leave the scheme for family, health or professional reasons".

If you have concerns over your organisation’s training agreements, speak to your Employment Solicitor or HR Consultant today.

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