Costs of education and training

Costs of education and training must be paid in full by departing employee

One should not assume that the obligation to repay education and training costs decreases in proportion to the duration of employment. This can be concluded from a judgment given by the Court of Appeal in The Hague on 22 September 2006. In the relevant case, both the Sub-District Court and the Court of Appeal held that the employer was permitted to claim back almost all the education and training costs incurred when an employee gave notice to terminate, in accordance with the education and training costs clause that had been agreed with the employee. In this context, it was relevant that the course had been completed relatively recently and the training costs incurred were in reasonable proportion to the employee’s salary.

When the employee took up employment on 1 October 2000 the parties agreed an education and training costs clause. This provided that the employee had to repay to the employer the full amount of any education and training costs if she terminated her employment within three or four years, respectively of the costs being incurred. The employee resigned from her position with effect

from 31 December 2002. The employer deducted all the education and training costs incurred from her last salary payment. The employee protested and applied to the Sub-District Court for the amount deducted to be repaid. The Sub-District Court rejected the claim.

On appeal, the Court of Appeal confirmed the Sub-District Court’s decision. In reaching this conclusion, the Court of Appeal took account of the fact that in taking the training course the employee had not only furthered her employer’s interests but her own interests as well. The Court of Appeal also considered it relevant that the employer was in no way responsible for the termination of the employment relationship and there was no reason why the employer should bear any liability for it.

Commentary

In 1983 the Dutch Supreme Court held that it is reasonable that under an education and training costs clause the extent of the obligation to repay should decrease in proportion to the duration of employment. The employer attempted to rely on this. The Court of Appeal held otherwise. On further investigation, it emerged that the employer had reduced the amount deducted by a significant proportion. The Court of Appeal also determined that “a not insignificant part” of the period of three to four years to which the training costs that the employer had deducted related had not yet elapsed, “so that at the time in question there could not be said to be any utility for the employer”. Finally, the Court of Appeal took into consideration that the amount deducted was in reasonable proportion to the employee’s salary and the short period between claiming the costs and the end of the employment relationship.

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