Can You Make an Employee Pay Back Training Costs?

You paid a couple of thousand pounds for someone's qualification. Three months later, they hand in their notice.

You may be able to recover that money. But only if the clause was right in the first place, and the rules around what "right" looks like just got tighter.

The short answer: can you get an Employee to pay back training costs?

Yes, but there's no automatic right to it. Pay back from training costs depends on a properly drafted written agreement, signed before the training took place, and the amount you're asking for has to be reasonable and proportionate. Get any of that wrong and a clause that looked watertight on paper can fall apart the moment it's tested.

You need a written agreement, signed before the training

This is the bit that trips up employers who've been meaning to formalise things but never quite got round to it. Without a signed, advance written agreement, demanding repayment or deducting the cost from someone's final pay risks an unlawful deduction from wages claim under the Employment Rights Act 1996. A clause introduced after the fact, once the training's already happened, is unlikely to hold up.

It must be a genuine cost, not a penalty

The figure you're recovering has to reflect the real, evidenced cost of the training. Course fees, exam fees, the trainer's invoice. A number that's been rounded up to sting, or that bears no relation to what you actually spent, risks being struck down as a penalty rather than a legitimate repayment.

Where repayment is triggered by an employee breaching their contract, this is tested under the penalty doctrine, most recently set out by the Supreme Court in Cavendish Square Holding v Makdessi. Where repayment is simply triggered by someone resigning, which is the far more common clawback structure, the clause is more likely to be tested under a different doctrine altogether, and this is where the law has just moved.

The new risk: restraint of trade

In July 2026, the Court of Appeal handed down its judgment in Geeks Ltd v Watts, and it's changed the calculation for a lot of existing clawback clauses.

The facts, in outline: an employee on a starting salary of £18,000 had signed up to a training cost debt of £8,108, structured to taper down the longer he stayed, written off gradually from his first anniversary onwards. He resigned at eight months, before any of that debt had started to reduce, to take a new role on a considerably higher salary elsewhere.

The Court of Appeal held that the clawback clause was void as an unreasonable restraint of trade. Not because clawback clauses are inherently unlawful, they aren't, but because this one applied regardless of why the employee left (only redundancy was carved out), and because, taken as a whole, it made leaving so financially painful that it effectively locked him into the job rather than genuinely reflecting the cost of his training. A clause like this has to go no further than reasonably necessary to protect a legitimate business interest. This one went further.

It's worth being precise about what changed and what didn't. The restraint of trade doctrine isn't new, it's over a century old. What this case does is confirm, clearly and at Court of Appeal level, that the doctrine applies to training clawback clauses just as much as it applies to non-compete restrictions, and that a clause making leaving prohibitively expensive can fall foul of it even without a single word about competing with the business.

If your clawback clause was drafted before July 2026, and most were, it's worth having it reviewed against this decision rather than assuming it still does what you think it does.

Use a sliding scale

The clauses most likely to survive scrutiny are the ones that taper. Full repayment if someone leaves very shortly after training, reducing in stages the longer they stay, down to nothing after an agreed point.

As an illustration only: a clause might require repayment of 100% of the cost if the employee leaves within six months of completing the training, tapering down by roughly a sixth every two months after that, reaching zero by the eighteen month mark. The exact structure should be built around your actual training costs and your actual retention patterns, not copied from somewhere else, but the principle holds. Proportionality, not just tapering for its own sake, is what a court will be looking for.

You cannot deduct below the minimum wage

A deduction to recover training costs is treated as being for the employer's benefit, so it must not take the employee's pay, including their final pay packet, below the National Minimum Wage or National Living Wage for that pay reference period. This applies however solid your written agreement is.

Minimum wage enforcement is moving to the Fair Work Agency, and getting this wrong on someone's final payslip is a straightforward, checkable breach. (See our guide on paying staff for training time for more on how the minimum wage interacts with training.)

What about redundancy or dismissal?

Repayment is much harder to justify where the employer ends the employment, rather than the employee choosing to leave. A clause that bites in every scenario, including redundancy or a dismissal that wasn't the employee's fault, is significantly more vulnerable to challenge, and this was part of what counted against the clause in Geeks v Watts. Best practice is a clear carve-out: no repayment obligation where the business made the decision to end the employment.

Getting your clause right

This is where the drafting genuinely earns its keep. I work with business owners on the agreement itself, the tapering structure, the carve-outs, and how it sits alongside the wider contract and policy work I do through the Flex Support and Partnership Plan arrangements. Getting it right before someone starts an expensive course is far easier than trying to enforce a defective clause after they've left.

Who should pay for training?

Not everything belongs in a clawback clause. Statutory and mandatory training, the kind covered in our guide to whether staff training is a legal requirement, is the employer's cost to carry, and generally shouldn't be clawed back at all. Clawback fits a different category: expensive, optional qualifications that mainly benefit the individual's own career, a professional diploma, an external certification, that sort of thing. Drawing that line clearly in your policy avoids a much harder conversation later.

Have your training agreement reviewed

If you've got a clawback clause already in place, or you're about to invest in someone's training and want to protect that investment properly, let's go through it together. Book a free chat, with no obligation, via Calendly, and we'll look at whether your agreement would hold up.