Are you still bound by contract if you haven't signed it?

(27 Posts)
Ellypoo Wed 21-Oct-15 09:43:07

I was always under the impression that even if you haven't signed a contract of employment, if it has been issued to you (and the employer has evidence of issue) then you are bound by it if you have continued to work and accept a salary - is that correct?

We have a clause in our handbook and T&Cs to say that if someone leaves within a certain period after we have paid for a course (a degree, not just a one-day course) then they have to repay it if they leave within a certain period of time - someone has handed their notice in and has said that as they 'haven't ever seen the document', they aren't going to repay their fees.

Where do we stand on this? It is several thousand pounds, and we can't afford to not get the £ back if we aren't going to get the benefit of the training.

Thank you!

MinesAPintOfTea Wed 21-Oct-15 12:05:51

I think you would have had to make the fees an interest free loan to do that, with a separate agreement. Either way it would have to be perused via the courts if they deny agreeing

Ellypoo Wed 21-Oct-15 12:38:02

We only ask them to repay if they leave within a certain period of the end of the course - it's very standard, and we have a deduction clause too, so I don't have a problem from that perspective. It's just that this person is saying that they won't be repaying the fees as they haven't ever seen this clause - they have been issued with the contract in writing, and have said on their probation appraisal that they have returned them even though they haven't, but they have acknowledged the contract of employment. The information is also in the staff handbook which was issued to them on induction and is freely available on the intranet.

I just want to check where we stand on the fact that we don't have a signed copy of his contract of employment really.

flowery Wed 21-Oct-15 14:34:23

Well, yes employees are bound by a contract if they are issued it and continue to work under it.

However, there is definitely going to be a risk of this if you commit to paying thousands for training without making any terms and conditions of that funding specifically clear in writing at the time it starts and ensuring the person signs a letter/agreement at that point confirming that they understand there will be a requirement to repay etc etc

Relying on an old unsigned contract you may not be able to absolutely prove they have received, and a handbook they may not have read is risky and I would advise against it.

Ellypoo Wed 21-Oct-15 16:55:18

Oh that's really frustrating Flowery - we chased them for their signed copy, and have all their other signed documents. They have been given 2 printed copies of the staff handbook, and it is also available to everyone electronically - I accept that not reminding of the requirement to repay at the time of agreeing to pay their fees was a huge mistake and we will ensure that it doesn't happen again.

Any advice on how I can proceed? On their probation appraisal form (which they signed) there is a note to say that their signed T&C's had been returned to us but I can't find them.

flowery Wed 21-Oct-15 18:10:46

Well, presumably all their final pay and any holiday pay have been deducted, so it's a case of trying to recover the rest?

I would hold your line, so write formally quoting the contract and handbook and requiring repayment of whatever the amount is.

But if they refuse, it is unfortunately likely that pursuing it further won't probably be worth it and you may need to write it off.

stevemLS1 Wed 21-Oct-15 19:56:57

flowery, as always, gives excellent advice.

For the cost of a degree, though, and given the evidence you have of their being provided with documentation containing the repayment provisions, I would be inclined to pursue it with some vigour.

flowery Wed 21-Oct-15 20:07:41

Oh goodness, yes that's right a degree is v expensive these days.

daisychain01 Thu 22-Oct-15 04:14:51

How much was the total outlay for the course? A part time degree is a fraction of the cost of F/t. If it's a total amount of say £6k then you'd have to say to yourself that legal costs to pursue thru the courts would take away most of that gain so is it worth it.

Of course benefit of hindsight is a wonderful thing but I'd put in a process in the organisation to formalise this as a separate document both parties have to sign rather than relying on an employment contract. It needs to be standalone so there is an audit trail. Plus if someone applies for funding they should be charged with the action of creating a business case of why they want to do the course. This could also be held on their file.

hebihebi Thu 22-Oct-15 04:44:04

I think given that it's such a huge amount you would be better seeking proper legal advice.

prh47bridge Thu 22-Oct-15 08:00:32

If it's a total amount of say £6k then you'd have to say to yourself that legal costs to pursue thru the courts would take away most of that gain so is it worth it

No they wouldn't even if it was that low. For that amount of money the business should represent itself. They do not have to use a solicitor. Legal costs will therefore be limited to court fees - a few hundred pounds at most. And if they won they would be able to reclaim these costs from the ex-employee.

MinesAPintOfTea Thu 22-Oct-15 09:05:04

Businesses have cost rates and reputations too though. 6k wouldn't be worth a week of director time in my company, plus its publicity that breeds ill will.

DoreenLethal Thu 22-Oct-15 09:13:29

I accept that not reminding of the requirement to repay at the time of agreeing to pay their fees was a huge mistake and we will ensure that it doesn't happen again.

I believe that if you require them to pay back fees, it has to be done separately to the general employment contract, not just rely on the contract itself. So, before anyone embarks on any training that you require to be paid back if they leave, the form spells out the cost, and the terms upon which the payment needs to be paid eg 100% of costs until the course is finished, 75% within the first year of completion, 50% within the next year etc etc.

DoreenLethal Thu 22-Oct-15 09:15:42

It's just that this person is saying that they won't be repaying the fees as they haven't ever seen this clause

Also, did you notify them of the actual cost involved before the course was agreed? If not, then how would they know how much would be needed to be paid back? If you did, then you would have a paper trail saying that you told them how much it cost and the terms of payback wouldn't you? So get that out as proof.

Ellypoo Thu 22-Oct-15 09:17:49

Great advice as always, thank you very much.

The employee has requested to see a signed copy of his T&Cs - he already has the unsigned copy.

I will reinforce the fact that he doesn't need to have returned his signed copy to be bound by the terms, that we will be deducting as much as we can from his final salary payment, and that the remainder will be due to be repaid to us by x date, and stand my ground.

It's really annoying as he wanted to do this, and made a business case, it was supposed to be a 5 year course and reflected a great investment in him both in terms of time and money - 18 months in, he now wants to move to a different employer and thinks that we'll just write everything off that we have forked out so far. If he thought about it, he could discuss the possibility of his new employer paying us - that has happened in the past (and we have done it for new staff that we have really wanted), so it wouldn't necessarily cost him personally anyway.

It is leaving a bitter taste, on both sides - but we have definitely learnt a lesson from this.

DoreenLethal Thu 22-Oct-15 09:29:47

I will reinforce the fact that he doesn't need to have returned his signed copy to be bound by the terms, that we will be deducting as much as we can from his final salary payment, and that the remainder will be due to be repaid to us by x date, and stand my ground.

Unless you have a signed document stating the terms, you have no ground.

hebihebi Thu 22-Oct-15 09:48:35

You need to be careful though because if he is right then he may end up taking you to court for unpaid wages. You need to be very careful here. Please get proper legal advice. Just getting proper advice on how to proceed will only cost a few hundred pounds. You need to put your personal feelings about the situation aside and act correctly. If a solicitor agrees with you can then have them write him/his new employer a letter and suggest how to resolve the situation.

Ellypoo Thu 22-Oct-15 10:18:02

I will check with ACAS and see what they say.

flowery Thu 22-Oct-15 11:36:04

An employment contract doesn't have to be physically signed to be enforceable. Obviously signed is preferable, but if both parties are aware of the terms and continue the relationship knowing those terms, and without protesting them, then those are the terms that apply.

Ellypoo Thu 22-Oct-15 12:25:32

Thanks Flowery - as always, you are a great help flowers

DoreenLethal Thu 22-Oct-15 12:53:27

It doesn't matter if it is in the contract or not - to get the fees paid back it needs to be a separate document, signed by the individual before the training happened.

www.peninsulagrouplimited.com/blog/how-to-secure-your-training-costs-against-employees-who-leave/

I agree that without that the employee is highly likely to go to court for non-payment of wages.

DoreenLethal Thu 22-Oct-15 12:54:07

As it would be an unlawful deduction.

Ellypoo Thu 22-Oct-15 13:04:42

It doesn't say there that it needs to be in a separate document - we have the Training clause and a deductions clause within the T&Cs.

flowery Thu 22-Oct-15 13:09:27

Nothing in that article addresses the question of enforceability of unsigned contracts or training clauses included in contracts. Not that I'd advise taking an article by Peninsula as being gospel anyway - if an employment law advisory service is being successfully brought to a tribunal by one of their own staff as they were recently, you've got to apply a grain of salt to their credibility imvho.

atticusclaw2 Thu 22-Oct-15 13:11:47

Doreen that isn't correct, it doesn't have to be in a separate document to be legally enforceable (I'm an employment lawyer).

Best practice would be for the employee to have signed a specific training costs document or at least for them to have signed the contract but the contract is still potentially enforceable.

I would agree that you could do with a lawyer having a quick look at this for you. ACAS are fine for some things but they will not generally analyse the legal enforceability of documents (and any off the peg "advisory" service such as that linked to above is generally best avoided)

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