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Annie Hayes



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HR Tip: Recovering relocation expenses


These questions are being answered by Learn HR, a market leader in the provision of HR and payroll training and nationally-recognised professional qualifications.

Q: We paid a major part of the removal and allied expenses of an employee whom we recruited from another part of the country. After just over a year with us he has handed in his notice and is going to work for a local competitor who we know does not pay removal expenses. Can we recover those expenses, for example from final salary? It seems that he got us to pay to move to a competitor, which seems totally wrong.

A: You certainly may not deduct anything from salary unless you have the employee's written permission to do so. You could address his better nature, but I think we both suspect what the reply would be, so I think you need to write off this expense to experience. However you may take time to consider why he has gone to a competitor. Are they so much better than you? Could you have made things better for the employee?

And the lesson for the future:

  • Set out clearly in the offer letter or contract of employment what expenses you will pay and against what receipts
  • State that these will have to be repaid in full if the employee leaves within 12 months of relocating or of joining you
  • Add that, in the second year of employment, the total amount will be reduced by one twelfth for each complete month of service in that year
  • Make clear that, if necessary, the outstanding debt will be deducted from final salary
  • Have the employee sign his or her acceptance of this arrangement.

This is a suggestion, which you may wish to vary to meet your specific circumstances.

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Annie Hayes


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