When Training Costs Become an Unlawful Barrier to Leaving

If Internal training repayment clauses are increasingly common in employment contracts, but when do they become unenforceable by the courts?

In Geeks Ltd v Watts [2026], it was held that such a clause becomes unenforceable if, in practice, it operates as a significant financial barrier to an employee changing jobs.

What happened?

• Mr Watts was a quality assurance engineer on a salary of £18,000. He signed a separate training agreement which valued his internal training, mentoring and study support at £8,108.
• Under the agreement, the full amount was repayable if he left during his first 12 months. The debt would then reduce gradually over the following 18 months.
• After eight months, Mr Watts resigned to take a better-paid job. Geeks sought to recover the full £8,108.
• Although the company succeeded at earlier stages of the proceedings, the Court of Appeal found the repayment provision unenforceable.
• It was held that the clause could operate as a restraint on Watt’s ability to change jobs and this was deemed unfair.
• The courts deemed it especially substantial compared with Mr Watts’ relatively low salary.
• Further, the repayment obligation was not limited to circumstances where the employee voluntarily resigned.
• Taken together, these factors meant the provision went beyond genuine cost recovery and operated more like a restriction on employee mobility.

What does this matter for employers?

The decision does not mean that employers cannot recover training costs.

Instead, it reinforces the need for training repayment arrangements to be reasonable, proportionate and supported by evidence.

Further, employers should differentiate between their treatment of internal and external training costs. The courts are far less likely to enforce repayment terms for internal training as internal training is often notional and refers to a repayment of time.

What can HR do to prepare for this?

• Link repayment to genuine costs, the amount should reflect the employer’s actual expenditure on training rather than an arbitrary figure.
• Include exemptions to ensure that repayment is not enforced when employment ends through circumstances outside the employee’s control, such as redundancy.
• Draft less restrictive terms for internal training costs.
• Review existing training agreements!

Need help?

At PJH Law we specialise in Employment Law, feel free to call our office on 01780 757589.

The post Geeks Ltd v Watts – HR Alert: Training Repayment Clauses Face Fresh Scrutiny – Can You Really Charge Employees For Internal Training? appeared first on PJH Law Solicitors LLP.

It’s not just about the feedback — it’s about the results we achieve for our clients.

The majority of our clients secure an increase in their redundancy settlement because we don’t simply review the agreement — we negotiate better deals on their behalf.

But getting a better financial outcome is only part of what we do. We also provide clear, professional advice and support throughout what can be a difficult and uncertain time.

So it’s great to receive feedback like this about Joe.

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From a ChatGPT search to a successful settlement…

We loved receiving this feedback from a client who first discovered PJH Law through ChatGPT.

What followed was months of support from Joe while her settlement agreement was being processed. Knowing that his approachable, responsive and considerate manner helped our client feel valued during such a difficult period is something we are particularly proud of.

A huge well done to Joe, and thank you to Nafeesa for trusting PJH Law to support you when it mattered.

Feedback like this is a great reminder that excellent legal advice is about more than the outcome — it’s also about how you support people along the way.

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With major changes to employment law on the horizon, we are inviting you to join us for a seminar to explore how the Employment Rights Act 2025 will affect employers.

Our team will guide you through the key reforms, highlight the potential risks for employers, and answer your questions. We aim for you to leave with a clear understanding of the changes and practical steps you can take to prepare.

We hope you can join us for what promises to be an informative and enjoyable morning.

Places are limited, so please RSVP by 30 September 2026 via the QR code or by email to beatrice@pjhlaw.co.uk.

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Stronger Protection for Employees Taking Industrial Action

One of the most notable changes arrives on 30 October 2026, when new regulations are expected to come into force prohibiting employers from subjecting workers to detriment because they have taken part in lawful industrial action. This follows concerns that existing legislation did not adequately protect employees from sanctions short of dismissal when participating in strike action.

In practical terms, employers will need to think carefully before taking disciplinary or other adverse action against workers involved in industrial action. The new rules are designed to ensure employees can exercise their rights without fear of being penalised.

A New Duty to Inform Employees of Their Trade Union Rights

From October 2026, employers will be required to provide workers with a written statement explaining their right to join a trade union. This information must be issued alongside the written statement of employment particulars given to new starters.

This change reflects the Government’s wider focus on increasing awareness of workplace rights and ensuring employees are informed from day one of their employment.

More Time to Bring Tribunal Claims

Employees will soon have longer to bring certain employment tribunal claims. From 1 October 2026, time limits for many claims are expected to increase from three months to six months.

For employers, this means potential claims may arise much later than before, making robust record-keeping and document retention even more important.

Existing Trade Union Rights Employers Should Remember

Alongside these upcoming changes, workers already benefit from extensive statutory protections relating to trade union membership and activities. These include:

• The right not to be refused employment because they are, or are not, a trade union member.
• The right not to be pressured into joining or leaving a trade union.
• Protection from unlawful inducements designed to encourage workers to give up union membership, avoid union activities or bypass collective bargaining arrangements.
• The right not to suffer detriment for joining a union, seeking to join a union, participating in union activities at an appropriate time, or making use of union services.
• Protection from automatic unfair dismissal where the reason for dismissal relates to trade union membership, non-membership, activities, or refusal to accept an unlawful inducement.
• Rights relating to recognised trade unions and collective bargaining, including protection against employers seeking to circumvent agreed bargaining processes.
• Protection against discrimination by employment agencies on the grounds of trade union membership or non-membership.
• The right to bring claims before an Employment Tribunal where these protections are breached, with compensation and other remedies available.

What Should Employers Be Doing Now?

With these changes on the horizon, employers should consider:

• Reviewing industrial relations and disciplinary policies.
• Training managers on the new protections relating to industrial action.
• Updating onboarding processes to include trade union rights information.
• Ensuring employment records are retained for longer periods to reflect the extended tribunal time limits.
• Reviewing recruitment practices to ensure there is no direct or indirect discrimination relating to trade union membership.
• Checking collective bargaining procedures are properly followed before making direct offers to employees.
• Monitoring further guidance as the legislation is finalised.

The Bottom Line

The message from the Government is clear: trade union rights are being strengthened, and employers will be expected to take a more proactive approach to compliance. Preparing now will help organisations avoid legal risks and foster positive workplace relations in the years ahead.

Did you know?

Employers who fail to follow the Acas Code of Practice in relevant cases could see tribunal compensation awards increased by up to 25% under the forthcoming industrial action regulations.

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Does the reason for less favourable treatment of part-time workers need to be the sole cause for a claim to succeed?

This update to our previous blog considers the Supreme Court’s decision and clarifies when less favourable treatment of part-time workers will be unlawful under the Part-Time Workers Regulations 2000.

In Augustine v Data Cars Ltd, the issue of less favourable treatment for part-time workers was put through the pinball machine of the civil courts appeal system.

For the uninitiated, part-time workers have a right not to be subjected to detriment under Regulation 5 of the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000. Regulation 5(2) elaborates that the treatment will be unlawful if:

1. The treatment is on the grounds of working part time.
2. The treatment is not objectively justified.

This case considers whether working part-time must be the sole reason, or merely the operative reason, for the treatment in question.

What happened?

1. Augustine was a part-time taxi driver for Data Cars. Taxi drivers are typically not employees but can be workers.
2. Data Cars operated a fixed weekly radio fee for all drivers; this fee was to give driver’s access to the dispatch of new fares.
3. The fee was the same regardless of hour many hours the driver worked or fares the driver picked up.
4. Augustine complained that the flat radio fee put him at a disadvantage as the hourly cost of this was higher for him as a part-time worker than it was for a full-time driver.

The Employment Tribunal dismissed the claim. It held the flat fee was not charged because the Claimant worked part time. It was just a blanket policy. Therefore, the treatment was not on the grounds of working part time.

The Claimant appealed through the Employment Appeals Tribunal, Court of Appeal and finally the Supreme Court. The Supreme Court held that the unfavourable did not need be the sole cause, just the effective one. Therefore, the blanket fee was less favourable treatment and unlawful.

This case can have quite a few universal applications beyond radio fees for taxi drivers. Part-time workers often receive different rules for bonuses, benefits, holiday entitlement (particularly bank holidays), and shift patterns.

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