Employment contract with a clawback for training costs

An employer that pays for an employee's qualification and loses them to a competitor six months later wants the money back, and the law allows it on conditions most clauses ignore: the amount must be a genuine estimate of the employer's loss rather than a penalty, it must reduce over time, it must not apply where the employer ends the employment, the deduction must be consented to in writing in advance, and it must not take pay below the minimum wage. The contract has to draft the clause within those conditions so that it is worth having. Drafting for the employer, I deliver the contract in five working days for a fixed £595, written so that it can be reused for everyone in the grade.

Who this is for

Employers in England and Wales that fund professional qualifications, licences, certificates or courses for staff, and employers whose existing repayment clauses have never been tested.

What matters in a training cost repayment clause

Why most training repayment clauses fail

A clause requiring an employee to repay the full cost of training whenever they leave, regardless of when, is a penalty (a sum out of proportion to the employer's legitimate interest in recovering what it has lost) and unenforceable; a clause imposed after the training without consideration is not agreed; a deduction made without prior written consent is unlawful under section 13 of the Employment Rights Act 1996; and a clause that applies when the employer dismisses the employee is unfair and unlikely to be enforced; the contract should draft the clause to avoid each, because a clause that fails on any of them recovers nothing.

The costs that can be recovered and those that cannot

The clause should limit recovery to the external costs the employer paid (course fees, examination fees, materials, accommodation and travel for the course), should exclude the employee's salary while training and the employer's internal costs, and should require the employer to tell the employee the cost before the training is undertaken, with the employee's agreement to each course recorded; a clause that recovers the employee's wages for the days spent training is the one most often struck out.

The sliding scale and the period

The clause should provide for the repayable amount to reduce in stages over a stated period after the training is completed (for example by a stated fraction for each month or quarter of service), so that the sum reflects the benefit the employer has had from the trained employee, with the period proportionate to the cost and the qualification; a two-year period for a professional qualification and a shorter one for a short course are the kind of proportion a court looks for, and the clause should state the arithmetic.

Dismissal, redundancy and the triggers that do not apply

The clause should apply where the employee resigns or is dismissed for gross misconduct within the period, and should not apply where the employee is made redundant, dismissed for capability or ill health, dismissed in breach of contract, or leaves because of the employer's breach, because a clause that charges an employee for a departure the employer caused is unenforceable and a reason for a claim; the contract should state the triggers and the exclusions.

The written consent and the final pay deduction

The clause should contain the employee's written consent, given before the training, to the deduction of the repayable amount from final pay under section 13 of the Employment Rights Act 1996, and should provide that any balance is a debt repayable within a stated period, with the employer recognising that recovery beyond final pay is a claim rather than a deduction; the consent should refer to the specific training or to a schedule of courses agreed in writing as they arise, because a general consent to deduct unspecified sums is weak.

The minimum wage, apprentices and the rules that override the clause

A deduction for training the employer required reduces pay for minimum wage purposes under the National Minimum Wage Regulations 2015, so the clause should provide that the deduction will not take the employee's pay in the final period below the minimum wage and that any balance is a debt; the funding rules for apprenticeships prohibit recovering the funded training costs from an apprentice under an approved apprenticeship agreement under the Apprenticeships, Skills, Children and Learning Act 2009, and the clause should exclude them; and training the law requires the employer to provide (health and safety, mandatory training in regulated sectors) should not be recovered at all.

What it costs

Employment contract, £595. One template you can reuse for a grade of staff. Five working days.

Staff handbook and core policies, £995. Five working days.

Buying online forms the engagement on payment. The scope is what the employment contracts and handbooks page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• A bespoke contract drafted for how you employ people
• Restrictive covenants drafted at a scope a court will uphold
• Confidentiality and intellectual property provisions that put ownership where it belongs
• The statutory particulars, so the document does the job section 1 of the Employment Rights Act 1996 requires it to do
• Flexibility clauses where you genuinely need them, drafted to survive challenge
• Core policies: disciplinary, grievance, sickness absence, equal opportunities, data protection and, increasingly, AI use
• One round of amendments

What is not included

• Acting for employees
• Employment tribunal representation
• Payroll, pensions auto-enrolment and tax
• Immigration and sponsor licence work
• Day to day HR handling, disciplinaries, grievances and redundancy processes

Questions I am often asked

Can we recover the full cost if an employee leaves the week after qualifying?

Most of it, under a sliding scale that starts at the full external cost and reduces over the period. The full cost regardless of timing is a penalty, which recovers nothing.

Can we recover training costs from an employee we made redundant?

Not from a redundant employee, and a clause that tries to is unlikely to be enforced. The clause applies to resignation and gross misconduct dismissal and excludes redundancy, capability and the employer's breach.

Can we deduct the repayment from the final salary?

With written consent given before the training, yes, provided the deduction does not take the final pay below the minimum wage. Any balance is a debt to be claimed.

Related guidance and services

• Employment contracts and handbooks, £595, the service this page describes
• Consultancy and contractor agreements, £595
• Settlement agreements for employers, £795
• Employment contract for a graduate trainee
• Employment contract for an apprentice

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: October 2026. Email geoffrey@caesar.co.uk.