Labour law Technology- & IT-Law

Effectiveness of repayment clauses in the training contract

The Federal Labor Court (9 AZR 187/22 and 9 AZR 260/21) once again dealt with an agreement between employee and employer on training costs. The problem regularly lies in the fact that an employer finances further training for an employee, but the employee then quits and uses the qualification acquired at the employer’s expense for another job.

Against this background, repayment clauses have developed in the event of termination, but these are regularly subject to legal review. And here, too, it is possible for courts to review the content – so that the written word alone is not decisive. In the present case, the employer had no claim against the employee for repayment of the training costs under the relevant clause of the training contract. This was because the provision did not stand up to a review of its content and was therefore invalid.

Content control of contracts

It is always a surprise for employers – especially for foreign employers: Even if something has been expressly and (supposedly) clearly regulated, it is by no means a mandatory agreement under German law.

In particular, when so-called general terms and conditions (GTC) are involved, they are subject to judicial review as to how they are to be understood from an objective perspective and whether they are actually effective. The law governing general terms and conditions has become very complex over the decades and is regulated in a very differentiated manner both in German law and throughout the EU.

In the present case, the agreements made in the training contract were general terms and conditions governed by Section 305 (1) sentence 1 BGB. In this case, it was to be assumed that the contractual conditions were pre-formulated; apart from the employee’s personal data and the specification of the specific training period, no individual specifics could be identified in the contract. This and the external appearance justify the factual presumption that these are general terms and conditions.

If there are general terms and conditions, their validity is to be judged according to § 305c para. 2, §§ 306, 307 to 309 BGB. According to the contract, the employer only wanted the training costs to be understood as a loan: In a “Clarification of the Training Agreement” it was expressly stated that the parties agreed that the funds provided by the employer were a non-interest-bearing loan.

However, as explained, this is interpreted by the courts! And since in this agreement reference was made to the repayment obligation according to the training contract, it was clear that actually no loan in the legal sense was intended, but an obligation to repay the subsidy regulated in the training contract. This shows how, even contrary to the express wording, German courts are capable of understanding and interpreting contracts completely differently. So it makes no sense to try to twist something linguistically with particularly clever tricks – it simply doesn’t work!

The repayment of training costs is a legitimate concern of the employer – but: It is tricky and demanding to formulate this. The simple use of forms from the Internet without the involvement of a lawyer will, as in the present case, certainly end in disaster on a regular basis.

Ineffectiveness of a repayment clause

In the view of the court, the provision at issue here regarding the repayment of training costs leads to an unreasonable disadvantage and is invalid. This is because the provision is linked to the repeated failure to pass the examination, without differentiating to the necessary extent according to the reasons for which participation in the examination did not take place.

When considering unreasonable disadvantage, provisions in general terms and conditions are invalid if they unreasonably disadvantage the contractual partner of the user contrary to the requirements of good faith (cf. Section 307 (1) sentence 1 BGB ).

According to German case law, unreasonable is any impairment of a legally recognized interest of the employee that is not justified by reasonable and equitable interests of the employer or compensated by equivalent advantages. The determination of an unreasonable disadvantage requires a mutual consideration and evaluation of the legally recognized interests of the contracting parties. In doing so, a comprehensive assessment of the positions of both parties must be carried out, taking into account the principle of good faith. In assessing the inappropriateness, a general, typifying standard is to be applied which is detached from the individual case. The interests of the user must be weighed against the interests of the contracting parties typically involved. In the context of the content review, the nature and subject matter, purpose and peculiarity of the respective transaction must be taken into account.

Individual contractual agreements according to which an employee must contribute to the costs of further training financed by the employer if the employee does not complete the further training are generally permissible. They do not generally disadvantage the employee unreasonably and are therefore not inadmissible in principle.

However, repayment obligations that are linked to the repeated failure to pass the desired examination may, depending on their form, unreasonably disadvantage the employee. This is because they are likely to exert pressure on the employee to remain in the existing employment relationship and thus restrict the fundamental right to choose one’s job freely. Therefore, the repayment obligation must, on the one hand, correspond to a justified and reasonable interest of the employer and, on the other hand, the possible disadvantages for the employee must be adequately compensated. Overall, the repayment obligation – including its scope – must be reasonable for the employee in good faith. Overall, the repayment obligation – also in terms of its scope – must be reasonable for the employee in good faith. If this is not the case, it remains the case that losses incurred as a result of investments in the employee’s training and further education subsequently becoming worthless are in principle to be borne by the employer as operating expenses.

unreasonable disadvantage to the employee

According to the case law of the Federal Labor Court, an unreasonable disadvantage to the employee is not only to be assumed in cases in which the employee does not have it in his or her power to escape the repayment obligation through his or her own loyalty to the company because he or she is induced or contributed to the termination by reasons in the sphere of the employer – for example, by conduct in breach of the contract.

A repayment clause is also unreasonably disadvantageous within the meaning of Section 307 (1) sentence 1 BGB. § A repayment clause is also unreasonably disadvantageous within the meaning of Section 307 (1) sentence 1 BGB if it also obligates the employee to repay the training costs who terminates the employment relationship before the end of the commitment period because he is permanently unable to perform the work owed through no fault of his own. Even under this condition, the employee’s commitment to the employment relationship through the obligation to repay the training costs is not justified by the employer’s equitable interests or by equivalent advantages of the employee.

If the employee is permanently no longer able to perform the contractually owed work through no fault of his own, the exchange of services under the employment contract is no longer possible. The employer can therefore not use the employee’s qualifications until the end of the commitment period, irrespective of the employee’s notice of termination. As a rule, there is no reasonable interest in the continuation of an employment relationship that can no longer be fulfilled and is therefore “meaningless”. It is an entrepreneurial risk if the investment in the training of an employee is not amortized due to the employee’s permanent inability to perform through no fault of his own.

Finally, it is also inadmissible to link the repayment obligation to the repeated failure to pass the intended examination without regard to the reasons. In accordance with the case law of the Federal Labor Court on repayment clauses because of the employee’s own termination, the practically relevant case constellations in which the reasons for the failure to pass the examination do not lie in the employee’s sphere of responsibility must at any rate be excluded from the repayment obligation.

German Lawyer at Law Firm Ferner Alsdorf
I am a specialist lawyer for criminal law + specialist lawyer for IT law and dedicate myself professionally entirely to criminal defence and IT law, especially software law. Before becoming a lawyer, I was a software developer. I am an author in a renowned commentary on the German Code of Criminal Procedure (StPO) as well as in professional journals.

Our law firm specialises in criminal defence, white-collar crime and IT law / technology law. Note our activity in digital evidence in IT security and software law.
German Lawyer Jens Ferner (Criminal Defense & IT-Law)