Study cost clauses: are they still allowed?

Before the TPWC Act came into force, we had already written an article about study cost clauses. That article can be read here.

Now, nearly two years after the enactment, it is a good time to reflect. Several rulings have been made regarding the (in)validity of study cost clauses. In this article, we will inform you about the latest developments regarding study cost clauses and mandatory training.

Free Mandatory Training

Since August 1, 2022, you can no longer charge employees for training that is legally or CLA-mandated as necessary for their position. If such training must be provided free of charge, any agreed study cost clause is invalid.

For vocational training or training that employees are required to undergo to obtain, maintain, or renew a professional qualification, a study cost clause may still be agreed upon. The professions listed in the Regulation Establishing the List of Regulated Professions  fall under this category. Additionally, you may agree on a study cost clause with your employees in the following situations:

• For training necessary to obtain a diploma or certificate that an employee must already possess at the start to perform the job.
• For a non-essential course or training that an employee follows out of personal interest.

Developments in Case Law

Since the enactment of the TPWC Act, various rulings on study cost clauses have been published. The subdistrict court judges vary in their decisions, sometimes ruling in favor of the employee and sometimes in favor of the employer. For instance, the subdistrict court in Rotterdam found that the training to become a tram driver was necessary for the job. The employee in this case was hired specifically to undergo the training before being allowed to drive the tram independently. A starting qualification to drive a tram was explicitly not required. Therefore, the employee did not have to repay the costs. 

In another case, also at the subdistrict court in Rotterdam, training to become an MOT inspector was deemed unnecessary, as the employee was hired as a first mechanic and could perform his job without the MOT inspector training. The study cost clause was valid, and the training costs must be repaid when the employee leaves the company.

The published rulings show that various relevant circumstances are considered when determining whether training is necessary:

1. The purpose of hiring the employee;
2. To what extent the training improves the employee's employability, both in the current role and for future roles or promotions;
3. Who initiated the training;
4. The employee's actual choice to participate in the training;
5. The comparability of the role with colleagues who have not undergone the training;
6. Whether the employee can perform the role only under the supervision of a manager until the training is completed.

If the provisions in the law or CLA do not provide clarity, you can use the above points to determine whether the training your employee will undertake is necessary.

Free Training Despite Vocational Training?

As previously mentioned, vocational training does not typically have to be offered free of charge to the employee. However, the subdistrict court in Rotterdam ruled that this type of training is seen as necessary training. This means that the employee does not have to repay the training costs, despite it being vocational training. This exception to an exception was honored, among other things, in the vocational training for lawyers. A lawyer must complete his vocational training within three years. If the employee does not pass his training, he is generally not allowed to practice as a lawyer. Therefore, to practice as a lawyer, completing the vocational training is necessary. It remains important to assess on a case-by-case basis whether vocational training constitutes necessary training and whether failure to complete the vocational training hinders the practice of the relevant profession.

Conclusion

Although the TPWC Act has been in force for some time, it is still not always clear which training the employer must offer free of charge. For training where a study cost clause may in principle be agreed upon, employees still have the opportunity to have an agreed study cost clause declared invalid. This is evident in the number of lawsuits on this issue. Is your employee going to follow a training at your expense? Make sure to check whether the training is necessary for the job. In this way, you can avoid discussions with your employee about repaying study costs afterwards.

Do you have questions about which training in your organization must be offered free of charge, or do you need help drafting a study agreement? Contact our labor lawyers. They will be happy to advise you on this matter.

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