We receive funds towards training costs from the Apprenticeship Service (funded by the apprenticeship levy). Are there any specific rules that prevent an employer from recovering training costs from an apprentice?
It is not unusual for an employer and an employee to enter into a training agreement whereby the employer invests in the employee by meeting external training costs on the understanding that the employer can claw back the training costs from the employee (on a sliding scale whereby the amount to be repaid reduces depending on the length of time that has passed since the completion of the course) if they leave the business. Provided that the repayment clause does not amount to a penalty clause (i.e. it does not seek to disproportionately punish the employee for leaving the business) then it may be enforceable.
However, an employer cannot take the same approach with an apprentice around the recovery of training costs from an apprentice if the apprentice leaves after the completion of their apprenticeship. The rules on apprenticeship funding are set out in the Department for Education ‘Apprenticeship funding rules 2023 to 2024 (“the Rules”):-
Paragraph 145 of the Rules (headed ‘Financial contributions by an apprentice’) states:-
“The provider or the employer must not ask the apprentice to contribute financially to the eligible costs of training, on-programme or end-point assessment. This includes both where the individual has completed the apprenticeship successfully or has left the programme early.
Costs include any co-investment or additional training and assessment costs above the funding band, that the employer has paid directly to the provider, where this is part of the agreed apprenticeship.”
As always, this advice is general in nature and will need to be tailored to any one particular situation. As an RMI member you have access to the RMI Legal advice line, as well as a number of industry experts for your assistance. Should you find yourself in the situation above, contact us at any stage for advice and assistance as appropriate.
Motor Industry Legal Services
Motor Industry Legal Services provides fully comprehensive legal advice and representation to UK motor retailers for one annual fee. It is the only law firm in the UK which specialises in motor law and motor trade law. MILS currently advises over 1,000 individual businesses within the sector as well as the Retail Motor Industry Federation (RMI) and its members.
