September 2026
Many employers use training cost repayment clauses to recover the cost of investing in employee development where an employee leaves shortly after receiving significant training.
However, the recent Court of Appeal decision in Geeks v Watts highlights the importance of ensuring these clauses are carefully drafted and proportionate.
What Happened?
Mr Watts joined Geeks as a trainee engineer on a salary of £18,000. His contract required him to repay £8,108 of training costs if his employment ended for any reason other than redundancy.
He resigned after eight months to take up a better-paid role elsewhere.
What Does This Mean For Employers?
The Court accepted that Geeks had a legitimate interest in protecting its investment in training. However, the clause went too far because it applied broadly, regardless of the circumstances of termination or what the employee did after leaving.
Employers should ensure that training cost repayment clauses:
- relate to genuine training costs rather than ordinary business expenses;
- include a reasonable repayment period;
- reduce over time to reflect the benefit received from the employee’s continued service; and
- apply only in appropriate circumstances.
A standard clause may not be suitable for every situation, and employers should consider whether the terms are proportionate in light of the training provided, the employee’s role, and their salary.
How Can We Help?
Training cost repayment clauses can be a useful way of protecting investment in employee development, but they must strike the right balance between protecting the employer’s interests and allowing employees to move freely between roles.
If you need advice on reviewing or drafting training cost repayment clauses, or updating your employment contracts, please get in touch with our employment law team.
Let’s Talk.
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