Can an employer deduct money for training should the employee resign within a specific period after completing the training?
Many employers provide training to new employees when they join the company. The reason for training may vary from on-the-job training to train the new employee on proprietary systems of software, to being sent on formal skill development courses. Current employee may also require new training should the business’s operational requirements request it and or a new system is being implemented.
When an employee resigns, especially soon after completing training, employers are quite justified in feeling wronged. The question becomes, may they hold the employee liable for the costs and expenses incurred for the specific training?
Firstly, it is important to keep in mind that Section 34(2) of the BCEA specifies that:
“2) A deduction in terms of subsection (1)(a) may be made to reimburse an employer for loss or damage only if–
a) the loss or damage occurred in the course of employment and was due to the fault of the employee
b) the employer has followed a fair procedure and has given the employee a reasonable opportunity to show why the deductions should not be made
c) the total amount of the debt does not exceed the actual amount of the loss or damage; and
d) the total deductions from the employee’s remuneration in terms of this subsection do not exceed one-quarter of the employee’s remuneration in money.”
If a (advisably written) agreement was established between the employer and the employee that the employee would be liable to repay the costs of the training should s/he resign within a specified period after completion of training, the employer will be able to enforce the signed written agreement. The employer will then be allowed to recover from the employee a proportionate / pro rata amount of the training costs incurred by the employer for the employees training received.
The written agreement would have to meet the following criteria:
- That is was signed/agreed to prior to the commencement of the training.
- That it disclosed all the terms and costs to the employee prior to the signing of the agreement.
- That it clearly stipulates the terms under which the employee would be liable to repay such
- That it stipulates the period for which the employee will be held liable for those costs.
- That is stipulates how the proportionate / pro rata amount will be worked out should the employee leave/ resign before the specified period has lapsed.
If training is offered on the condition that the employee may be held liable to reimburse the costs should s/he resign for any reason or is dismissed, before training could commence, through no fault of the employer within a certain time, the employee must be given a fair opportunity to refuse the offer of training should s/he feel that the conditions are unacceptable for whatever reason.
If no agreement was signed prior to the training, it is implied that the employer is offering the training at company cost without requiring the employee to reimburse the employer. An employer has no legal entitlement after the fact to demand the repayment of training costs if the only basis is that the employee has resigned.
To succeed in a claim for reimbursement of training costs against an employee, the employer would have to show that a valid agreement was in place prior to incurring the cost of the training. The reimbursement claimed cannot exceed the actual cost of the training, that is, the total provable cost of providing the training less the portion claimed by the employer in terms of the Skills Development Act.
Employers are cautioned to carefully consider when imposing a liability for training costs on an employee should s/he resign, as this may result in the provision falling under the scope of the Conventional Penalties Act 15 of 1962, if the cost claimed is deemed to be a penalty and the penalty amount is disproportionate to the actual loss/damage suffered by the employer.
This article is being provided for informational purposes. Contact Joblaw for any enquiries and legal advice.