Pre-resignation training costs not recoverable

November 18, 2012 - by: Jennifer Shepherd 0 COMMENTS

by Jennifer Shepherd

Can Canadian employers who require employees to undergo training to upgrade their skills as part of their employment then seek reimbursement from the employee if the employee subsequently resigns?

As seen in the Alberta arbitration First Truck Centre Edmonton Inc. v. Christian Labour Association of Canada, Local 56, the answer to this issue will depend on whether the employer clearly communicated to the employee that he or she would have to repay the employer if he or she resigned.

Background to the dispute

The dispute involved First Truck Center Edmonton Inc. and Christian Labour Association of Canada, Local 56 on behalf of union members Bill Thomson and Marco Roy. The dispute was over deductions First Truck made to the employees’ final paychecks to reimburse itself for costs it had expended to upgrade the employees’ training.

The arbitrator was asked to determine whether First Truck was (1) permitted to make those deductions and (2) whether the training costs it was claiming for reimbursement were owed by the employees. The arbitrator quickly disposed of the first issue as it determined that First Truck was not permitted under the Employment Standards Code to make such deductions. The second issue was dealt with more thoroughly, as follows:

Evidence regarding the training program

In order for First Truck to maintain its status as a dealer and distributor of freightliner warranty work, it was required to employ certified technicians who had a basic heavy equipment technician journeyman certificate. In addition, its technicians were required to maintain current and topical training in the service and repair of these vehicles.

To meet this requirement, training was made available to employees as new equipment and techniques emerged, often in-house. Thomson and Roy both participated in these training programs.

The employees knew they might be asked to reimburse First Truck if they left the organization within one year of training. But they both thought that this only applied to external training programs. For external training, First Truck required that its employees pay for the cost of the course and would then reimburse them based on their grades. Both employees believed that this policy did not apply to the in-house training programs.

Arbitrator’s decision

The arbitrator determined in these circumstances that the training costs were not recoverable by First Truck because it could not demonstrate that it had communicated that the in-house training costs would need to be repaid if the employees resigned within a certain period of time.

First Truck was able to point to express language in respect to training costs for its external training programs; however, the arbitrator decided that this did not transfer to all training programs. In addition, while First Truck’s employee handbook also contained some language relating to training costs, there was no evidence that the employees had read or agreed to its terms.

Takeaway for employers

This case reminds employers across Canada of the importance of using express language in policies about training and education. This express language should set out the specific training employees are to receive, the approximate cost of the course, and the terms of repayment if employees leave within the specified time period.

Further, it is equally important that employers review those policies and forms with employees, particularly in circumstances where the employer wishes to be reimbursed for training costs if the employee leaves within a certain period of time. Better yet, obtain employees’ express agreement to the repayment terms.

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