Posted on: Jul 14, 2014

An employer successfully sought recovery of training costs incurred by it in respect of a Diploma in Advanced Automation undertaken by an employee, who denied liability for the training costs.

Early in 2011, the employee put a proposal to the employer that it fund the Diploma at a cost of $8,144.15. The employer agreed to the request and paid for the diploma courses. In 2012, the employee asked for a pay increase. In July 2012, the employer had developed a training and development policy (the policy). The policy stated (inter alia):

If for any reason the Employee decides to terminate the employment relationship or the decision is made by the Employer to terminate the employment relationship for disciplinary reasons only within a given period of completing a training course, the Employee will be required to reimburse the Company for training costs as set out below:

 a. Within 12 months full reimbursement of training costs.

 b. Within 2 years 60% of training costs.

A new salary package for the employee was agreed, and the employer made it clear that the new package was dependent on the employee signing the policy and that the policy would apply to the training being currently undertaken for the Diploma. After taking time to consider the matter, the employee signed the agreement and the policy.

The new salary package and the policy took effect from 16 July 2012. On 22 February 2013, the employee resigned. On the employee’s final day of work (28 March 2013) the employer issued the employee an invoice for $8,144.15. The employee did not pay the sum and claimed the policy could not apply retrospectively to his diploma.

The Authority held that the policy was binding on the employee and was enforceable. It ordered the employee to pay the sums owed plus interest at 5%.

 See Athenry Electrical Ltd v Wolmarans [2014] NZERA Auckland 210


This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.