In a case brought against Lorne Stewart PLC an employee challenged whether she had been paid the correct amount of money from the perspective of the National Minimum Wage.  She had signed an agreement under which she had agreed to repay the costs to her employer if she left before attending the course, or within 2 years of having attended it.  The paperwork authorised her employer to make deductions from her final pay if her employment was terminated.  She then resigned and left within the 2 year period so the employer made the deduction.  That made her final pay packet look as though it was below the minimum wage, causing her to bring her complaint.  Regulation 33(a) of the National Minimum Wage Regulations provides that ‘any deduction in respect of conduct of the worker or any other event, in respect of which he (whether together with any other workers or not) is contractually liable’ should be excluded from the calculation i.e. it is not to take into account/reduce the amount of the worker’s total pay i.e. the employer will comply with the law provided it has paid the correct amount before the deduction has been made.

The Employment Appeal Tribunal agreed that because the employee had resigned voluntarily the employer was entitled to deduct the money back without infringing the legislation.  However, if the reason for the employee’s employment coming to an end had not been her own conduct (e.g. the employer was making her redundant) the National Minimum Wage Legislation would still require the employer to ensure that the National Minimum Wage was paid in the final pay reference period.

You need to make sure that your repayment of training costs information makes it clear that an employee does not have to repay if the employer is terminating the employment (except where it is entitled to summarily dismiss e.g. for gross misconduct) or if the employee has resigned in a response to a fundamental breach of contract by the company.  If you would like us to review your repayment of training fees documentation we will be able to do so very quickly and easily and for a modest fee only.  Email Anna for more details.