Many employers cover part or all of their employees' training costs. This generous offer is usually linked to the expectation that employees will remain with the company for a longer period of time after completing the paid training. This means that part of the investment in the training of this person can be returned to the employer in the form of commitment and work performance. But what happens if the employment contract ends, e.g. due to termination? Can the training costs then be reclaimed? And if so, in what amount?
Repayment clauses are generally permissible
The Federal Labor Court has ruled that repayment clauses in employment contracts are generally permissible (BAG, judgment of April 11, 2006 -9AZR 610/05). Repayment requires that new professional opportunities arise for the participant as a result of the training or further training. This is generally to be rejected if it is a measure that is exclusively of benefit to the employee's own company.
There are many reasons why the repayment clause may be invalid. If only individual parts of the repayment agreement are invalid, this means that the employer's entire repayment claim is void.
Proportionality of the commitment period
The repayment clause must always be limited in time. The retention period describes the time that employees must be employed by the employer after completing the training in order not to have to repay the costs. This commitment period must be set in relation to the duration and quality of the training. The Federal Labor Court assumes that a commitment period of 6 months is appropriate for training that lasts no longer than one month. A longer commitment period is also permissible as the duration of the training increases. If the employment contract or additional agreements on further training do not contain such provisions on the commitment period or if they are too long, the clause as a whole is invalid.
Pro rata temporis reduction of the repayment claim
The repayment clause must include a provision on the reduction of the repayment obligation before the end of the commitment period. This provision must clarify by how much the repayment obligation is reduced for each month that employees are employed in the company after completing the training.
Example: Employee A completes his 6-month training course in June 2021. The repayment clause reads: "The repayment amount is reduced by 33% for each full calendar year that the employee is employed by the employer after completing the training course."
This clause would be inadmissible as it does not contain a monthly but only an annual pro rata reduction. The consequence: A would not have to make any repayment at all.
Exact designation of the costs
Ineffective repayment clauses lead to the lapse of a repayment claim. A frequent reason for invalidity is that the clauses do not quantify the costs associated with the further training or do not quantify them precisely enough. The Federal Labor Court has ruled that the wording "the expenses incurred by E for further training, including the continued payment of wages" is invalid. It could not be inferred from this provision which costs were meant in detail. Employers cannot, of course, forecast the costs down to the last detail. However, they must at least clearly and transparently specify whether travel, accommodation and catering costs are to be reimbursed in addition to the course fees. And, if this is possible when the contract or ancillary agreement is concluded, how these are calculated.
Loan repayment for later employment in the company
Example: Employee Y has completed her training with her employer Z. She begins a two-year full-time course of study, the fees for which are paid by Company Z. The parties make a side agreement before the start of the course which states: "The costs of EUR 30,000.00 will be provided by Company Z as an interest-free loan. This loan will be repaid in 60 equal monthly installments of EUR 500.00 through your employment at Z after you have successfully completed your studies."
This constellation is not uncommon. However, even minor errors can lead to the clause and the repayment claim being invalid. The pro rata repayment obligation (by monthly deduction from the salary) can only be effectively agreed if the ancillary agreement
- includes an entitlement to the establishment of an employment or other employment relationship for employees and
- determines the "framework" of the future employment relationship.
It is not sufficient to abstractly guarantee any employment relationship. It must at least be defined in the clause.
"This includes information on the start of the contractual relationship, the type and duration of employment and the salary determination of the initial remuneration. Only then can the repayment agreement be regarded as sufficiently transparent within the meaning of Section 307 (1) sentence 2 BGB. The employee must know which contractual offer he may have to accept in order to avert the agreed repayment obligation"
(BAG, judgment of March 18, 2008, 9 AZR 186/07)
We check the effectiveness of your repayment clause if you are an employer. If you are an employee, we will check whether you are obliged to reimburse the training costs before you decide to terminate your employment or if you are already facing a repayment request. Arrange a free initial consultation now at your preferred time.
