Training Bond Agreements

Training Bond Agreements

Employers often wish to fund the further training and development of their employees for the benefit of both parties. Our team are often asked about the legal aspect of bonding a staff member to the business in these cases, is it legal and what time periods are acceptable

Unfortunately the answer isn't always as straight forward as we might like. Businesses can of course get a staff member to sign off on a bonding agreement and feel quite protected by that, but the test is really whether that agreement will be enforceable if tested by the Courts, and it's always a case-by-case decision.

A Bonding Agreement generally binds an employee to the Employer for a certain length of time at which point the parties agree the debt is paid and the Company has had sufficient benefit from the Employee's extended education.

Where the Employee is simply being trained for the job this is often viewed as only benefiting the Company and not the Employee. In this instance it could be deemed unfair and thus unlawful to bond them. However, if the Employee gains a formal qualification or equivalent industry recognised skill through the training which is clearly a benefit to themselves then the Business has a valid case to bond the Employee in order to gain value from the expense and investment they have incurred.

As with any agreement both parties must agree on the terms and conditions in the bond. This will vary on a number of variables with the particular course or training in question. The cost of the training, direct and indirect, length in time of the training, time off required, are weighed up against what is a reasonable length of time to bond the Employee to the Business in return.

Common practice is that it's generally accepted that bonding periods are usually less than 2 years in duration. However, longer periods do exist and can be agreed to by both parties. The trouble really begins when bonds get broken and the Employer seeks enforcement. If Courts deem the terms and conditions harsh and oppressive in relation to the training offered a bonding agreement isn't worth the paper it's written on.

We supply 2 bonding agreements in the Employers Toolbox Library section free to members. These can also be purchased separately on our website to non-members.

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