This was recently considered in a case in which we defended the employee.
In Sydney International Students Consulting Pty Ltd t/as Australia Online v Castro (NSW Local Court, Atkinson LCM, 23 September 2024), an employer sued a former employee seeking repayment of migration-law course fees. Mr Castro worked for the business from late 2016 until resigning effective 18 June 2021. The employer had supported (and paid fees for) his migration law studies in 2020. After Mr Castro resigned, he offered to discuss paying the business back by instalments and made small voluntary payments totalling $735.72, but later stopped. Proceedings commenced in November 2022.
The employer’s case was that a term should be implied into the employment arrangement requiring Mr Castro to reimburse the course fees if he resigned within three years of completing the course. The Court confined the dispute to that pleaded issue, and applied the well-known BP Refinery criteria for implied terms (including that the term must be reasonable and equitable, necessary for business efficacy, and so obvious it “goes without saying”).
The Court preferred contemporaneous documents over recollection, found the employer’s key witness unreliable, and accepted Mr Castro’s evidence. The alleged repayment term was not proven and was not necessary or obvious. The claim was dismissed and costs were awarded to the Defendant.
Conclusion – lessons to be learned
This decision is a reminder that employers should not rely on assumptions about “paying training back”. If training costs are to be recoverable, the obligation should be clearly documented in a signed agreement (including triggers, timeframes, amounts, and any sliding scale), and aligned with the employment conditions the employer is offering.
Good record-keeping matters: courts will generally prefer contemporaneous emails and documents to memory. For employees, informal “goodwill” repayment offers should be carefully framed to avoid unintended admissions.
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