If an employee leaves employment early after completing training paid for by the employer, the employer often wants to recover the training costs from the employee. Is that allowed? Since the entry into force of the Dutch Act implementing the EU Directive on Transparent and Predictable Working Conditions on 1 August 2022, the answer depends on several factors. This article provides a clear overview of the ins and outs of study cost provision (in Dutch: studiekostenbeding).
Recovering training costs: the basics
Employers cannot always rely on a study cost provision. Article 7:611a of the Dutch Civil Code stipulates that training required by law or by a collective labour agreement (CAO) to perform the job must be free of charge for the employee. Any repayment obligation for such training is therefore void. The time spent on such training counts as working time. Only employees earning the statutory minimum wage must also be paid for the time spent studying.
Examples of mandatory training include courses within improvement plans or training necessary to work with new systems. If the employer itself makes certain training mandatory in the employment contract, this may also fall under this category. In such cases, training costs may not be recovered or offset upon the employee’s departure.
Professional qualifications
There is an important exception. Training aimed at obtaining, maintaining or renewing a professional qualification does not fall under the prohibition in Article 7:611a DCC. For this category, agreements on repayment upon early termination of employment may be made. However, there must be no legal or collective labour agreement obligation to offer such training. If such an obligation exists, the provision is still void and costs cannot be recovered. This is also referred to in case law and legal literature as “the exception to the exception”.
Whether a course qualifies as training for obtaining, maintaining or renewing a professional qualification can often be determined from lists such as those included in the Regulation Establishing the List of Regulated Professions. However, these lists are not always decisive. Courts assess all circumstances of the case, including the content of the training and the context in which it is followed. The role for which the training is undertaken is also a key factor.
What does case law show?
In an older Supreme Court judgment (Muller/Van Opzeeland, 1983), the Supreme Court formulated conditions for a valid study cost provision. Such a provision is generally valid if:
- the employer benefits from the acquired knowledge for a reasonable period of time,
- the repayment obligation decreases proportionally as the employment relationship continues (a sliding scale), and
- the employee has been clearly and in writing informed in advance about the (financial) consequences.
Since then, courts have strictly applied these requirements. In several recent judgments, study cost provision were declared invalid because the arrangements were too vague or insufficiently specified.
Entry qualifications or mandatory training?
A key distinction in practice is between entry qualifications and training that becomes mandatory during employment. Entry qualifications are courses required at the start of employment. For these, a study cost provision may be agreed upon, provided the above-mentioned requirements are met. For training that becomes mandatory during employment, the prohibition in Article 7:611a DCC applies, meaning that the costs may not be recovered.
Practical tips for employers
- Check the nature of the training: if it is mandatory under law or a collective labour agreement, no cost recovery is allowed.
- Be transparent and specific: record in writing and in advance which training is involved, what the costs are, and how the repayment schedule works.
- Use a sliding scale: let the repayment obligation decrease as the employment relationship continues.
- Avoid breaching the minimum wage: offsetting training costs may not result in the employee’s net pay falling below the statutory minimum.
Conclusion
Recovering training costs when the employment ends is possible, but not always. Mandatory training under Article 7:611a DCC must always be free of charge for the employee, unless it concerns training for obtaining, maintaining or renewing a professional qualification. If such a study cost provision is properly drafted, cost recovery is permissible. It therefore pays for employers to draw up these provisions carefully and transparently, to avoid disputes in the event of an (unexpected) departure.
If any uncertainties or disputes arise, do not hesitate to contact Workx.
