Home - Question from Karen Karakaya ([email protected])
November 24, 2020

Question from Karen Karakaya ([email protected])

I am just reviewing our Professional Development Policy which states: Any financial assistance provided to an Employee must be repaid to the Company if the Employee resigns within 12 months of receiving the benefit and may be deducted from the employee’s final pay.
There is nothing in our employment contract so just wanted to check if we are legally able to withhold monies that we have paid for someone’s professional development if they left within 12 months?
Thanks.

Dear Karen,

To claim reimbursement costs from an employee who has resigned, you will need a signed written authority from the employee. This will need to specify the amounts that will be refunded and the conditions under which that will occur. These requirements arise under section 324 of the Fair Work Act.

Here, where authority to deduct from final pay is not a term of the employment contract, mere agreement to be bound by the company’s Professional Development Policy is unlikely to satisfy the tests for permitted deductions provided by this section of the Act.

Kind regards,

Benjamin Mann

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