Can employer recover education fees?

rob w

https://www.boards.ie/discussion/comment/117988401#Comment_117988401

Jumping the gun there a bit, I am not looking for a solicitor to fight a case for me, and have no intention of dragging this through court. And I do understand my reputation has a value also!!

I simply asked the question in the OP so that I can quantify the risk of potentially having to pay back the full amount. Its a risk that needs to be factored into any decision to move on elsewhere. I'm not going to disclose the amount on here, but it determines how favourable the salary offered by a new employer is depending on how it plays out.

It is interesting to see other people's take on it, seems to have pretty much split people down the middle on whether it's a valid contract or not.

TaurenDruid

I don't think anyone is arguing it's a valid, watertight contract. It's a **** contract, in fact. A solicitor will definitely make the case that it's void and unenforceable, and that if it was enforceable, it still literally means you only have to pay back the fees if you fail the course and leave the job, etc.

The question is whether or not it's a gamble worth taking, because a court could rule against you, in which case you're liable for both your solicitor's fees, and your employer's, and you've the reputational damage either way, too.

As to quantifying the risk - your employer would not have gotten you to sign the contract if they'd no intention of enforcing it, so assume they will enforce it, by stopping what's owed from your pay.

GM228

The question is whether or not it's a gamble worth taking, because a court could rule against you, in which case you're liable for both your solicitor's fees, and your employer's, and you've the reputational damage either way, too.

Asides from the question of rendering the entire contract void ab initio, let's assume that is not the case.

A court will not enforce it because the terms are clear, the court will not consider any verbal or implied terms or previous negotiations (if there were any) which are contrary to the ordinary meaning of clear express written terms, nor will they entertain any "well what we actually meant was...." type of arguments, this is well settled in case law.

A court will construe the meaning of a contract objectively when there is ambiguous words used, it is true that the contract may be poorly written, but the wording of the terms is clear.

It can be extremely difficult to enforce verbal terms where the terms are in dispute at the best of times, even more so when written terns differ with what is claimed was a verbal term.

so assume they will enforce it, by stopping what's owed from your pay

Without permission from an employee that would be unlawful.

PhilOssophy

https://www.boards.ie/discussion/comment/117988657#Comment_117988657

"I simply asked the question in the OP so that I can quantify the risk of potentially having to pay back the full amount" - quantify the risk of what exactly? If you are saying you aren't going down the legal route, what other risk is there?

Wild speculation here but I'm fairly sure this whole thread is all about up to €5-6k. Given an MBA for example costs 30k, and I doubt there's many courses more expensive, 20% of that would be 6k.

You got your qualification OP, and presumably a pay rise when you leave - suck it up and move on with your career. Either that, or wait the 7 months or whatever until you can walk away scot free.

Peregrinus

https://www.boards.ie/discussion/comment/117988645#Comment_117988645

I think Part 1 is readily severable. Part 2/3 is fairly obviously an alternative or fallback - "I won't leave within three years but, if I do [and if I have not successfully completed the course] then I will repay the fees". You can red-pencil part 1 and parts 2/3 still make sense.

Peregrinus

https://www.boards.ie/discussion/comment/117990267#Comment_117990267

The amount at stake here is not 20% of the cost of the course; it's the full amount of the cost of the course. If the contract is valid and enforceable and if, on the facts which have happened, it requires repayment, it requires full repayment, not a proportionate repayment.

TaurenDruid

https://www.boards.ie/discussion/comment/117989134#Comment_117989134

...so assume they will enforce it, by stopping what's owed from your pay

Without permission from an employee that would be unlawful.

Yes. Except the employer is under the impression that the OP has given permission- after all, they signed the contract that... kinda implies repayment, if you squint. They would almost certainly take as much as they can; and can argue in court they did so in good faith.

GM228

https://www.boards.ie/discussion/comment/117991905#Comment_117991905

A contractual agreement for repayment of fees, and an agreement for a deduction via wages is not the same.

That aside, the provision of a course would be considered "goods or services supplied to or provided for" the employee under the Payment of Wages Act 1991, it is unlawful to recover any fees paid for goods or services supplied to or provided for an employer via their wages unless such deduction via wages is a term in their contract of employment, a court will not entertain the employer claiming they had the impression that payment was implied because the contract agreed to is not a contract of employment, rather it's a simple contract, and if the term is not covered in the contract of employment than it is statutorily unenforceable.

TaurenDruid

https://www.boards.ie/discussion/comment/117992324#Comment_117992324

Yet as several people pointed out in the thread, this is exactly what's done in practice by many employers.

ohnonotgmail

https://www.boards.ie/discussion/comment/117992339#Comment_117992339

They can do so if the contract allows for it.

GM228

https://www.boards.ie/discussion/comment/117992339#Comment_117992339

Indeed, but it is lawful only if it is a term in the contract of employment, not a term in a simple contract.

One issue which can arise however is that such terms of a contract of employment can be implied, however they simply can't be read into the contract of employment via another type of contract, they still must be specific to the contract of employment.

Peregrinus

It is possible that the OP signed an employment contract when he first started which included a term that said that, if he participated at any point in the employer's education funding scheme and he became obliged under the terms of that scheme to refund the employer then he was authorising the employer to deduct the amount due from his wages.

I emphasis "possible" because I think it's pretty theoretical. Judging from the way the education loan scheme itself was documented, this isn't an employer who devotes too much thought to what it should put into its contracts.

And, in this case, it's irrelevant. Based on what's in the OP the employee will not owe the employer any money, so the question of whether the employer is entitled to deduct what is owed to it from wages won't arise.

Mellor

https://www.boards.ie/discussion/comment/117988645#Comment_117988645

Just because part 1 isn't enforceable doesn't mean the penalty in parts 2 and 3 are not enforceable as the benefit that is being penalized is not a legal requirement. By removing it they haven't created a illegal employment situation.

If the employer had of drafted this properly. Or even had a half clue in person in management read the contract, they could have corrected the wording so that they were due 100% of the fees now. As it was written, they are due zero.

OP's offer to pay 20% might be easiest solution if it is less that the cost to defend his position.

However that said, the fact the the third part says fullt reimburse and refund in the same sentence is especially odd. And does make we wonder about the transcription

to fully reimburse the fees to X if I (i) do not complete the full course of studies or (ii) fail to pass the overall course of studies to refund X all costs (other than costs of time off) incurred by X in permitting me to pursue the course of studies

Peregrinus

It's not grammatically coherent and that could be a transcription error by the OP (the word "and" could have been omitted before "to refund", for example) but, given that the whole thing is so badly written in every other respect, I see no need to hypothesise a transcription error by the OP. The employer could be responsible for this error just as he is responsible for all the other errors in the text.

Atlantic Dawn

With me on this the deal is the deal, I'm going to stay with the spirit of it and not argue if there's a double space or lack of a comma in the wording.

Peregrinus

https://www.boards.ie/discussion/comment/118002992#Comment_118002992

Sure. The deal's the deal. And the deal is, the employer advanced the money on terms that it would be repaid if the worker left service without successfully completing the course of study.

The worker did successfully completing the course of study so, per the deal, if he leaves he will not have to repay.

GM228

https://www.boards.ie/discussion/comment/117991249#Comment_117991249

https://www.boards.ie/discussion/comment/118002967#Comment_118002967

My thinking was more along the lines of he equitable remedy of recission, the entire contract being declared void ab initio due to the mistake made in Part 1 of the contract.

Peregrinus

If the entire contract is rescinded, can the employer seek to recover the sum advanced under the now-rescinded contract? Can he argue that the worker would be unjustly enriched if allowed to retain the advance?

If we see being required to repay the education costs as a penalty for breaching the (void, illegal) clause which prohibits leaving then, yeah, the penalty for breaching the prohibition on leaving must fall along with the prohibition on leaving.

But there's no doubt that (if properly worded) a requirement to repay the education costs if you leave within a specified period would, on its own, be perfectly valid, and indeed is common in these arrangements. Would it be hopelessly tainted as a penalty by the ill-considered inclusion of clause 1?

Mellor

https://www.boards.ie/discussion/comment/118003215#Comment_118003215

If the entire contract is rescinded; then they should returned to the position they would been in had the contract never existed. Which still means repaying the money, is the award of the money was a part of the contract as much as the repayment.

If a mortgage is rescinded, you don't owe any repayments, but you don't get to keep the principal.

I think the OPs best angle to pay zero is to play it exactly as written. However as above, 20% maybe less than that.

GM228

If the entire contract is rescinded; then they should returned to the position they would been in had the contract never existed. Which still means repaying the money

If a contract is rescinded they do indeed return to the pre contract state, but, in that case there is no contractual or otherwise obligation to repay the money, there are no terms determining if/when any money would need to be repaid, there is no qualifying criteria - unless of course as already mentioned there was some sort of related provisions in the contract of employment, but we don't know if that's the case or not.

Mellor

https://www.boards.ie/discussion/comment/118003867#Comment_118003867

I wasn't referring to contractual terms of repayment. But the actual money originally received. Which was itself a contractual payment. If that is rescinded, it should be returned. I think think that path has any merit.

ohnonotgmail

https://www.boards.ie/discussion/comment/118004561#Comment_118004561

If that was the case there would be no need for an addendum to the contract specific to the repayment of the money paid. What you are saying is that, in the absence of any specific provision in relation to the repayment of money spent for education, that employees must always repay any money that their employer pays towards education fees when they leave that employment.

Peregrinus

https://www.boards.ie/discussion/comment/118003867#Comment_118003867

Rescission of a contract generally involves unwinding it — if it's a contract of sale, the goods sold are returned and the purchase price is refunded; if a loan, the principal advanced is returned, etc. In fact, if I recall my Intro to Contract Law classes from the late middle ages correctly, if the circumstances are such that it's not practical to restore the status quo ante in this way, the remedy of rescission isn't available.

But we may be falling into a category error with the talk of rescission. It has been suggested that:

• Term 1 of the contract ("Thou shalt not quit within three years") is unlawful; and
• Term 2/3 is essentially a penalty for breach of term 1 and must fall along with it,

and therefore the entire contract is illegal. I'm not convinced that this is correct, but let's run with it. If the contract illegal, it's void; there is in truth no contract and therefore nothing to rescind. So we are not looking at the remedy of rescission here.

I don't think money paid, property transferred, under an illegal contract can generally be recovered. The employer could possibly seek through an action for unjust enrichment, but I think this would fail; the employee did receive a large amount of money under what turned out to be a void contract, but he has altered his position to his disadvantage by spending that money on college fees, so he no longer has it, and so cannot be compelled to return it.

Whatever way you look, I think the employer is cactus here.

The employer's strongest argument is probably common mistake, though I don't think it's strong enough to succeed. He will say that both parties intended that, if the worker left within three years, he would refund the education costs and the written document is simply wrong in not recording this common agreement; the court should correct it, and enforce it as the parties intended that it should have been written. But I don't think he can succeed in that argument. He has to overcome the presumption that the written contract is a true and accurate record of what was agreed. I don't see that he has any evidence that the worker intended that he would have to repay the money if he left early; from what we see in this thread the worker didn't really think about this at the time the contract was formed; he didn't direct his mind to the question until well afterwards, when he was actually thinking of leaving.

Beside, if the worker was mistaken the employee is at least partly responsible for the employee's misunderstanding, since he gave the worker the impression - in term 1 - that the employee could be and was put under an obligation to remain in the employer's service for three years. So, arguably, the employer's error contributed to the situation in which the common mistake, if there is a common mistake, arose. And you can't get a remedy for common mistake if the mistake is your fault, and not the fault of the other party.

TaurenDruid

https://www.boards.ie/discussion/comment/118007292#Comment_118007292

And you can't get a remedy for common mistake if the mistake is your fault, and not the fault of the other party.

E&OE.

ohnonotgmail

https://www.boards.ie/discussion/comment/118007872#Comment_118007872

E&OE applies to documents like invoices or those purporting to be a transcript of a conversation. It doesn't apply to contracts as a whole

Mellor

https://www.boards.ie/discussion/comment/118004721#Comment_118004721

Not sure why you think there would be no need for a clause about repaying. Don't follow you logic at all. And I've no idea how you've arrived at the conclusion that money always has to be repaid. I think you are confusing voided contract with a rescinded contract. You specifically referred to the latter. I keep using the mortgage example, as I feel its really year.

Say you had a mortgage contract that included a right of rescission. After a period of time you invoke that right, the contract is rescinded. No penalties or exit clauses apply, no repayments are owed, and obviously you return the lump sum principle. I don't think that's a path to be going down.

https://www.boards.ie/discussion/comment/118007292#Comment_118007292

I agree that term 1 is unlawful. But I don't think that makes terms 2/3 unlawful, simply because it would be possible to constructed terms 2/3, as intended, without term 1. It only needed to refer to a period of 3 years and not an agreement to stay for 3 years.

And in looking back on it, terms 2 doesn't refer term 1 (other than "the said")

I hereby undertake:

(1)...

(2) in the event of my leaving the employment of X, within the said three years

(3) to fully reimburse the fees to X if I (i) do not complete the full course of studies or (ii) fail to pass the overall course of studies to refund X all costs (other than costs of time off) incurred by X in permitting me to pursue the course of studies

I think the request to see the original formatting was important.

If the above is accurate, the employer* really had to suck up the mistake. But if he wants to fight it, might be easier and cheaper for the OP to agree something

Peregrinus

1. I agree with you about illegality. I think term 1 is illegal and can be severed, but term 2/3 can stand.
2. I think you mean that the employer really has to suck up the mistake?
3. As for settling a claim, yeah, that's always a pragmatic decision. But a lot depends on how this dispute plays out. If, as others have suggested, the employer withholds what it thinks is due to it from payments to the employee, then the dispute takes the form of the employee suing for wages due to him, and the employer probably counterclaiming for the amount that it thinks is due to it that his hasn't recovered by withholding. (The fees for a 3-year MBA are likely to be much higher than the employee's wages over the notice period.) It's likely to be only when the employer lawyers up and gets advice about its position that it will realise how weak its case is — look at all the people in this thread whose instinct was that the employer was obviously in the right; we can be reasonably confident that that will be the employer's opening position too — and an offer to settle before that point might be premature. After that point, the employer might be happy to walk away without an order for costs against it.

twowheelsonly

https://www.boards.ie/discussion/comment/117987399#Comment_117987399

The bit that I find hard to believe is that there was no in-person discussion at all beforehand. Surely anyone looking for this sort of grant would have a conversation with somebody in the company beforehand, whether that be a manager, boss, workmate or HR.

IMO plenty of Judges would rule against the OP if he tried to claim that he honestly didn't know what he was signing up for.

I'd also love to know how much is involved and what is the nature of the business.

OP, just as an indicator, if I was a potential employer looking to hire you and I got wind of this I wouldn't touch you with a barge pole.

Pretty sure I wouldn't be alone in thinking like this.

Peregrinus

https://www.boards.ie/discussion/comment/118012108#Comment_118012108

The onus isn't on the employee to prove that he didn't agree to repay the fees if he left after completing the course but within three years. The onus is on the employer to show that he did agree to that. And, right now, not only is there no evidence that the employee agreed to pay back in these circumstances; there is good evidence that the employer agreed that he wouldn't have to.

It's a heavy onus, because the presumption is that the written agreement is a correct statement of what was agreed; that's the whole point of putting it in writing.

And it's a still heavier onus in this case because the written text was produced by the employer; courts don't like the party who dictated the terms of the contract saying that the terms they dictated are wrong and should be set aside.

rob w

https://www.boards.ie/discussion/comment/118012108#Comment_118012108

OP here again.

I haven't posted back on the thread as I have my answer now, (through professional advice)

Just to clarify a few points.

The text I posted in the OP is the EXACT wording and layout of the agreement I signed. The only other text is a preamble naming the parties to the agreement (Employer and I)

There was never a discussion about repayment of fees beforehand. I was sent the agreement by email and asked to sign and return. I still have this email thread saved. (Also, my employers detailed education policy has no conditions regarding repayment of fees either, the agreement is the only place it is mentioned - but only in the event of failing/dropping out of course)

Regarding the comment(s) about future employers not touching me with a bargepole - that's is your own opinion. My new employer has always been fully aware of the situation and are fine with it, but they wanted to know exactly what would be owed before they might agree to contributing, and I was reluctant to ask the question prior to handing in my notice incase I decided not to take the new role. I was stuck in a Catch-22 really.

I have since decided to hand in my notice and accepted the new job, so I will find out what happens next soon enough!