Your rights: Ties that bond a trainee to an employer

Q. My sister has recently been employed for full time work, but in her employment agreement it says that if she resigns within 12 months of commencing work, she has to pay back the cost of training to the employer. However, it's all in-house training and she doesn't receive any certificates to say she has completed this training. Is this legal and binding?

A. It could be binding. In effect, these "training costs" are a bond to encourage your sister to stay for at least a year, and to ensure that the employer's investment in her training and induction is rewarded.

Clauses such as this aren't automatically illegal and (as you probably know) are often used, particularly when the employee is sent on expensive external training courses. It is reasonably unusual to see this sort of bond being used for internal training costs.

I assume there is a written agreement, and the amount of the bond is clearly and properly spelled out. If this is the case, the bond is probably binding unless:

(1) Your sister wasn't given a reasonable time to consider the agreement and told that she could take advice about its meaning; or

(2) she was placed under pressure to sign or, alternatively, she was misled about the type of training she was going to receive.

If either of these points apply, your sister may have an argument that she doesn't have to pay the money, and she should get further advice. At the very least, she should write down the problems that occurred when she signed the agreement, so this can be used as evidence later if necessary. She may also want to raise these issues with the company now, and say she doesn't agree with the bond.

One more point: by law an employer can only deduct money from an employee's wages or salary if the employee consents. I suspect your sister's employment agreement gives the company the power to make such deductions.

If your sister left early, the company could either sue her to recover the money, or (if it has the power) it could deduct it from her final pay. Obviously, making the deduction is much easier for the company.

However, by law your sister can withdraw her consent to the company making these deductions by giving notice in writing. If she is going to leave before the 12 months are up, this would certainly be worthwhile, because it would make things harder for the company to recover the money. However, she needs to give this notice to the company in plenty of time.