The case for staff training
01 November 2019
This article was featured in the November 2019 issue of the magazine.
Jade Linton, senior associate at Thursfields Solicitors, outlines the legal obligations and the ways businesses can utilise training to retain staff whilst protecting their interests
They’ve accepted the job offer, are qualified for the role and can hit the ground running, but what happens later down the line? Are you expected to take sole responsibility for their development, and what if the employee’s choice of training is not key to the fulfilment of their duties?
Compulsory training
An employer requiring its employees to attend training directly related to their role must at least pay the national minimum wage for the time spent training. For example, the training may be aimed at enabling employees who use computers to do their jobs more effectively, such as teaching them to use the company’s internal system.
This requirement extends to part-time employees, agency workers and those on zero-hour contracts. If the training is outside working hours, not directly related to the role or is voluntary, an employer will not have to pay for the time spent training.
Additional training
An employee with 26 weeks of continuous service in an organisation employing 250 or more people is entitled to request time off to undertake study and/or training. Provided the study and/or training is to improve effectiveness at work and is for the performance of the business, the employer is under a duty to consider the request under sections 63D–63K of the Employment Rights Act 1996.
Upon receiving the employee’s formal application, the employer must invite the employee to a meeting to discuss the proposal. The employer can refuse the application on permissible grounds which include (but are not limited to):
the training would not improve either the employee’s effectiveness at work or the performance of the business, and
if there would be a detrimental effect on the employer’s ability to meet customer demand.
If an application is refused, an employee does have the right to appeal the decision. An employee who is dismissed for making an application for additional training may also have grounds to bring an employment tribunal claim.
...employer can refuse the application on permissible grounds...
Why it’s good for business
There are many reasons why education and development is good for business, some of which are explored below.
Efficiency – Employees who are developed and kept up to date with procedures and processes aimed at enhancing performance, in theory will be more efficient in their role. In turn, this should help with the smooth operation of the business.
Capability and performance management – If you dismiss an employee on the grounds of capability and the employee subsequently brings a claim for unfair dismissal, one thing an employment tribunal will consider is whether you followed a fair procedure e.g. by providing training, supervision and targets aimed at improving poor performance. The employee only has to establish that they were dismissed and once they have done that, the burden of proof will shift to the employer to show it acted fairly in treating the poor performance as a fair reason to dismiss. Therefore, it is essential employers can show they took reasonable steps to help the employee improve; providing additional training is one of the ways employers can demonstrate such efforts.
Compliance – In certain industries, keeping employees up to date with developments and sending them on courses is essential to remaining compliant with health and safety laws. For example, employees who operate machinery in a manufacturing business will be required to undertake prescribed training relating to health and safety.
Reputation/retention – A recent survey commissioned by PwC, found less than 49% of workers felt their employer gave them the chance to improve their digital skills outside of their normal duties. Further, it was said that this was leading to mistrust and a lack of confidence amongst workers; such ill feeling is likely to cause good employees to leave roles where they feel undervalued and under resourced. Having a reputation for providing employees with the best support and career progression through training and development is one way in which high staff turnover can be reduced.
Profit – Upskilling employees should help improve the efficiency of the staff and in some industries can help a business to extend its customer reach and therefore boost productivity. Increased productivity and an extended client base is good for the bottom line profit as a highly skilled workforce is essential for appealing to new clients and retaining existing clients.
The employee leaves
It can be seen as a bit of a raw deal for an employer to foot the bill for training and then find shortly afterwards that the employee leaves the employment and uses elsewhere the skills gained.
Let’s say, for example, John was sent on a university course by his employer. The university course took John one year to complete and cost Payroll Limited £5,000. One month after completing the course, John hands in his notice to work for NI Plc using the skills he had developed during the course. What can Payroll Limited do in this scenario?
Payroll Limited may be able to recover the costs if John’s contract allows them to do so. It is often the case, for example, that employers will fund a course but require an employee to pay back a percentage if they leave after a certain period of time. This is fine, provided that the period of time is reasonable which will often depend on the nature of the role. The percentage of what they are required to pay back can also be varied, so for example 100% of fees to be paid back if they leave after three months and then 50% of fees after six months.
If there was nothing in John’s contract to that effect, Payroll Limited could consider whether any restrictive covenants could protect the business interests in another way e.g. by ensuring John cannot work for a competitor within a defined period.
If such clauses are not in the contract, before enrolling John on the course payroll could arrange for an agreement to be drafted which has the same effect; provided John agreed to the terms, Payroll Limited could enforce the agreement in the event of John leaving the business.
Conclusion
Although investing in training can seem like a financial burden, particularly where an employee has the necessary qualifications to do the job, it can be good for business. Training can help improve efficiency of the business, ensure that employees are highly competent in providing a quality service, and can boost profit.
In terms of protection for employers, it will not necessarily be the case that you will receive no return for your investment if the employee leaves, provided that the terms of the funding are expressly stated in the contract of employment or other agreement.