Introduction

Since the introduction of the law on transparent and predictable employment conditions in the summer of 2022, new rules apply to study cost clauses in employment contracts. For instance, compulsory training must be offered free of charge, taken during working hours and study cost clauses are not allowed for this type of training. However, there are different opinions on what exactly constitutes 'compulsory' training and what does not. Fortunately, this year has already seen a few cases on this topic. You can read more here:

Explanation of the new legislation

From 1 August 2022, the law on transparent and predictable employment conditions entered into force. Since then, the law provides in Section 7:611a paragraph 2 of the Dutch Civil Code: “"Where the employer is obliged under applicable Union law, applicable national law, a collective bargaining agreement, or a regulation by or on behalf of a competent administrative body to provide training to its employees in order to perform the work for which they have been hired, the training referred to in paragraph 1 shall be offered to the employees free of charge, shall be considered as working time and, if possible, shall take place during the times when work is to be performed."

Earlier, we already wrote that this law has implications for (existing and future) study cost clauses.

When the law was introduced, however, it was not yet entirely clear which courses were now 'compulsory' and which were 'non-compulsory'. As we expected, it did not take long for the first court cases on this issue to emerge. We discuss one such ruling in this contribution.

Overijssel District Court ruling 24 January 2023

What were the facts of the case?

Employee started working as a doctor for Argon, a health and safety service, on 1 February 2020. The employment contract contained a study cost clause for training as a registered occupational physician, necessary for the performance of the job. Since the costs of the training were €47,000 excluding VAT, Argon included a study cost clause in the employment contract. Hence, if the employment was terminated within four years of completing the training, the employee was obliged to repay a certain percentage of the training costs (based on a sliding scale with phase-out).

The employee terminated his employment contract from 1 February 2022 and had not completed his training at that time. He then joined another health and safety service and asked Argon for an overview of the training costs he would have to pay. Argon then sent an invoice of €79,969.44 but this remained unpaid. Argon also offered as an alternative that the employee would return to his job.

However, the parties do not come to an agreement and Argon set off a few thousand euros of study costs in the final settlement and then levied a prejudgment attachment. Thereafter, Argon starts proceedings to collect the amount of €72,966.32. Argon's claim also includes the hours the employee spent on the training during working hours as well as a substantial component of supervision costs (namely € 40,367.60).

The Employee's main defence was that the study costs clause was contrary to Section 7:611a (2) of the Dutch Civil Code and therefore null and void: he argues that the training was compulsory and that Argon could therefore not reclaim the study costs. He further argued that the amount of supervision costs was far too high.

Study costs clause admissible, training not ‘compulsory’

The Subdistrict Court disagreed with the employee; referring to the applicable EU Directive and the legislative history, the court ruled that training in article 7:611a paragraph 2 of the Civil Code does not mean professional training or training that employees are obliged to attend in order to obtain, maintain or renew a professional qualification as referred to in the Professional Qualifications Directive (Directive 2005/36/EC on the recognition of professional qualifications). These are the so-called regulated professions, which are set out in the annex to the Regulation establishing the list of regulated professions. That annex also lists this employee's profession. In short: in this case is no compulsory training as referred to in Section 7:611a (2) of the Civil Code.

Reimbursement is not unlimited

For training other than the compulsory training referred to in the law, an employer may therefore make agreements with an employee on possible repayment of the costs. But according to the court, this is limited by the good employment practice of Section 7:611 and the reasonableness and fairness of Section 6:248 of the BW.

The court also referred to an old Supreme Court judgment of 10 June 1983, NJ 1983 / 796 (Muller/Van Opzeeland), from which it appears that the system of the law does not automatically preclude a repayment arrangement in respect of wages and study costs (in the narrow sense), if the arrangement:

1. defines the period of time during which the employer is deemed to benefit from the knowledge and skills acquired by the employee during his study work;
2. provides that, if the employment relationship ends, the employee would be required to repay the salary for that period to the employer; and
3. reduces this repayment obligation in proportion to the continuation of the employment during the period of time referred to in a. above.

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In addition to these conditions, the Supreme Court mentioned in this judgment a number of circumstances that could prevent reliance on a study costs clause, including the situation where the employer did not clearly set out the (serious) consequences of the repayment obligation to the employee.

There is no dispute in this case as to whether the study expenses clause complies with this ruling. But the employee is of the opinion that the study expenses clause was not sufficiently clear and, therefore, the (severe) consequences of the repayment arrangement were not clear to him either. Indeed, when the employment contracts were signed, employee had no insight into the costs involved in the training, as the amount of the costs for supervision was not mentioned therein and Argon did not inform him of the actual amount of those costs until after the termination of his employment contract. Therefore, the employee finds that Argon cannot hold him to the study costs clause as far as the costs of supervision are concerned.

In brief, the court ruled on this point that although the study costs clause makes it clear that the supervision costs would be added to the €47,000 in training costs, the clause does not offer any concrete point of departure to be able to estimate the amount of those supervision costs in advance. The subdistrict court held that Argon could and should have provided more clarity in this respect. Ultimately, the employee had to repay €10,000 in supervision costs, separate from the actual training costs.

No conflict with good employment practices or reasonableness and fairness

Furthermore, the subdistrict court ruled that the employee's repayment obligation was not contrary to reasonableness and fairness or good employment practices. It was taken into account that a medical specialist has good career prospects, that Argon was willing to make a payment arrangement and that the new employer might also pay part of the costs. It also counts that the employee left Argon himself and that Argon even offered to continue the employment relatioship. The employee must therefore ultimately repay €45,581 to Argon.

You can read the judgment itself here.

Conclusion

This judgment provides a rather clear overview of the standards applicable to study cost clauses and offers a little more clarity on the question of what constitutes (non-)compulsory training. Nevertheless, we expect this to remain a recurrent subject in Dutch case law. Do you have questions about study cost clauses or other employment law topics? Please seek advice on time. The experienced employment lawyers of SPEE advocaten & mediation are happy to help you.