Who should pay for job-related training? (Toughest HR Question)

Are employers or employees responsible when it comes to safety, skills training?
By Brian Johnston
|Canadian HR Reporter|Last Updated: 12/16/2013

Question: If certain training, whether technical or safety, is required for an employee’s job, is the employer required to pay for the training or can it tell the employee to pay for it out of her own pocket?

Answer: There are two prongs to this question:

Whether an employee must receive pay when engaged in required training. The answer to this question turns on whether the employee is a job candidate or already hired. Most employment standards legislation in Canada is silent when it comes to training.

Generally, tribunals agree that once an employee is given specific duties that benefit the employer, she becomes an employee and any training required for the job is compensable. This is in contrast to pre-employment testing or training of a short duration, where hiring is contingent on successful completion of the testing or training.

For example, in Wajid Trading Corp. v. Mohamadu, the dispute was related to whether the person was compensated for training. The board concluded time expended by an employee for training purposes is generally considered employment under the Canada Labour Code, to which the minimum wage guarantee applies. Employees must receive at least minimum wage for their time spent training.

Training time required by law — for example, Workplace Hazardous Materials Information System (WHMIS) training — would also qualify as work to which, at a minimum, employment standards apply, as it is a necessary condition of the workplace. Thus, an employer is required to pay at least the minimum wage for time spent on required training, whether technical or safety-driven.

Who pays the cost of actual training? This, again, is an issue where employment standards legislation is silent. But practically, if a job requires training, most employers pay for it. Given that some training can be costly, employers may be tempted to recover expensive training costs by including a repayment clause in employment policies or agreements.

Such was the case in K.N. Umlah Insurance Agency Ltd. v. Christie, where the Nova Scotia Small Claims Court considered whether an employee was contractually bound when, after starting work for the employer that required $25,000 in training, he signed a contract that included the following:

"The employee agrees that upon termination of the employee’s employment within 60 months of the commencement date, either by the employee in order to be employed by any other general insurance provider operating within the province of Nova Scotia of the commencement date or by the company for cause, then, forthwith upon written request by the company, the employee shall repay to the company the training costs as losses suffered by the company as a result of the employee’s actions."

Because the contract was given to the employee after he had actually started working, it was found inoperable for lack of consideration. Furthermore, the clause was found to be an unreasonable and unenforceable restraint of trade:

"The basic intent of clause six is to bar an employee from working for ‘any other general insurance provider operating within the province of Nova Scotia’ for the first five years following his or her employment with Umlah Insurance on pain of having to pay a substantial amount of money to the claimant," said the court. "The practical effect is the same in either event: The employee cannot work for a competitor anywhere in Nova Scotia within that five-year time frame."

If an employer plans to seek re-payment for certain training costs, it should ensure the employee is aware of this before an offer letter or employment agreement is signed, and ensure the repayment agreement is one that will be enforced by the court.

For more information see:

Wajid Trading Corp. v. Mohamadu, 2009 CarswellNat 2238 (Can. Adj.(CLC Part III)).

K.N. Umlah Insurance Agency Ltd. v. Christie, 2009 CarswellNS 110 (N.S. Small Cl. Ct.).

Brian Johnston is a partner at Stewart McKelvey in Halifax. He can be reached at (902) 420-3374.

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