Penalty clause for termination or resignation during a probation period

[HR Solutions]

If staff get trained internally or externally it is time and cost money.

[HR Solutions]

If staff get trained internally or externally it is time and cost money.

And if Dep of labour have agreed with it then it's legal

[Citizen X]

Hi Mike,

This is my opinion on your matter.

The law of contract is largely regulated by the common law. One of the requirements for a valid contract is that the conclusion, object and purpose of the contract must be lawful. An unlawful contract cannot be enforced.

1. Firstly, the only way for this company to claim this money whatsoever is to sue out summons for breach of contract;
2. Secondly, unlawfulness is not just the dictionary meaning of unlawfulness, in this case, if it were me, upon receipt of the summons, I would enter a notice of intention to defend, and in my plea cite as my defence that those clauses are contrary to ‘Public Policy,’ and therefore unenforceable. The Constitution is the face of public policy,
3. You can also cite as a defence that the bargaining power between you and the employer was not the same, as you really needed the job and signed it without fully understanding it, therefore there was no consensus and no meeting of the minds. (consensus is one of the requirements for a valid contract); the implication is this, They will then still deduct from your provident fund and leave pay(this will naturally not cover the full amount). There is case law to support this.
4.The onus of proving that you have breached the contract is on the employer(the party claiming breach of contract);
5.You can also cite ‘misrepresentation,’ as a defence, which is a very strong defence. You can base this on the fact that you were not evaluated whatsoever during this period, and that the employer represented to you that you would be evaluated;
6.You can also state that those terms and conditions are completely unreasonable and therefore also contrary to public policy.
So, if I was in your position I would take the other job offer. I would also accept that whatever little amount of my provident fund and leave pay will be deducted. I will accept that they will sue out summons for breach of contract, but also that I will have several defences.
7. You say that the courses are 'college accredited,' are you sure??? Find out from the National Qualifications Framework, if not, You can also state as a defence that the 'training courses,' are not accredited by the NQF and therefore not recognized as official, formal training and argue that an employee has a right to be trained and not charged for what is an induction program. All qualifications and courses must be registered with the NQF. I doubt very much that these in-house programs even stand a chance of been registered with the NQF. Not even a University charges that much.

Many years ago, I was in a similar position, I accepted a position of branch manager for a business college. It had similar provisions about costs of training etc. Upon commencing employment, I found that I was doing largely administrative work and not the work of a manager. I left after one week. I received a summons, at that time I knew nothing whatsoever about the law. I was scared, I went to the Johannesburg magistrates court library and began researching what I should do, I entered a notice of intention to defend and a very poorly drafted plea. My defence was simple ‘exceptio non adimpleti contractus.’(if you don’t perform , I don’t have to perform). I also cited ‘misrepresentation,’ my explanation was simple but effective. I used this illustration in my very poorly drafted plea: if one is offered a position as a truck driver and arrives at work only to find that he is required to be a forklift driver, that is misrepresentation. Even though my plea was very poorly drafted and contrary to every court rule there is, they withdrew the matter completely.

So there are valid defences that you will have at your disposal.

I hope this helps.

[AndyD]

Thanks Vanash.

If staff get trained internally or externally it is time and cost money.

And if Dep of labour have agreed with it then it's legal

Yes, there's always a cost involved to the employer even with in-house training but the thing I'd take issue with is whether or not this even constitutes 'training' in the first place and secondly placing a value of a third of a million Rand on it and effectively holding an employee to ransom with it which given some of the terms in that contract, to me at least, reeks of malice and abuse of power. As for being legal, I'm not qualified to say but I have serious doubts in this particular case.

[HR Solutions]

Im a bit confused .... so are you saying that the Department of Labour might be operating illegally by giving this advise ?


PS ... Just by the way when I first implemented it on the contract and sat down with the employee and highlighted it - their answer to me was "Yes that is normal" !

[sterne.law@gmail.com]

I have just read quickly.
The contract is one of slavery.

[CLIVE-TRIANGLE]

I have just read quickly.
The contract is one of slavery.

An ill disguised one at that.

HR, if there were one less zero I might agree with you.

[sterne.law@gmail.com]

I think we should clarify some aspects of a training claw back clause.
If a company pays for a course of study, then there is no doubt that they may claw it back via payment or time worked.
That is only fair. The employee has gained a benefit at the employers cost.

What we have is purported training, that in essence is very much part and parcel of every business.
If such terms were legal then every company could essentially charge for the day to day training and mentoring, clearly an untenable situation.
In fact the employer could profit, because even if the company terminated you are still liable to pay back the money, which in many cases will be more than the salary earned.

[AndyD]

An ill disguised one at that.

HR, if there were one less zero I might agree with you.

If there were two less zeros I'd probably agree as well with the penalty clause reflecting the actual cost to the company but I'd still disagree about the morality (and probably the legality) of invoking a financial penalty against an employee for what sounds like in-house orientation of their internal systems and procedures.

[MikeM]

Hi all

Thanks for all your responses.

The law of contract is largely regulated by the common law. One of the requirements for a valid contract is that the conclusion, object and purpose of the contract must be lawful. An unlawful contract cannot be enforced.

I have been researching this topic and have found a few court transcripts. It seems in the cases I've been over where the employer claims an exorbitant amount for training, that far exceeds the employees remuneration, the court throws the case out as the clause is seen as In terrorem which is not lawful in terms of employment contracts. Well that was my understanding of proceedings, I'm not very knowledgeable about law.

Firstly, the only way for this company to claim this money whatsoever is to sue out summons for breach of contract

Thanks Vanash I believe you have given me some good defense ideas if the company does choose to sue if I am terminated or resign.

What we have is purported training, that in essence is very much part and parcel of every business.
If such terms were legal then every company could essentially charge for the day to day training and mentoring, clearly an untenable situation.
In fact the employer could profit, because even if the company terminated you are still liable to pay back the money, which in many cases will be more than the salary earned.

This is what I thought as well Anthony, however that clause in the contract isn't worded very well. It seems like it could apply in a case where I am terminated or resign and I'm not even permanent.
Like I stated previously I do understand the company's need for this clause as they do send permanent staff on courses, some are even international and the company covers all the travel and course costs.
But since I'm on probation, I have just had their in-house training.
I'm still not so sure that the costs are anywhere near the amounts in the clause, but it does seem they are just using this to inflict fear.

Anyway, I'm close to the end of this probation term, I will let everyone know the outcome of this, thanks for all the input and advice.