Payback clause

Name of the instrument - Local language: Mokymo išlaidų atlyginimas
Name of the instrument - English translation: Payback clause
Country: Lithuania
Type of instrument: Payback clause
Type of entry: Single instrument

Short description: The Lithuanian Labour Code includes a general clause on reimbursement of training costs incurred by the employer in case the trained employee resigns from employment without a valid reason and before the end of the agreed binding period. Other reasons for applying payback clauses are: dismissal due to a serious contract break and non-termination of the training. The timeframe for reimbursement and the amount/share to be reimbursed depend on the cost of the training and the time elapsed between the training and the termination of the contract. Employees can be required to reimburse not only the fees and payments for training courses but also direct and indirect labour costs.
Short description of the related instruments: nap

Level of operation

National

Name of a part of the country

nap

Name of the region (for regional instruments)

nap

Name of the sector (for sectoral instruments)

nap

Relevance

Key scheme

Legal basis

Lithuanian Labour Code (of 4 June 2002) , 95th paragraph, part 5

Objective(s) and target(s)

To protect the employers from the potential losses of investments in training of employees, when the latter decide to change employer.

Year of implementation

1992

Year of latest amendment

2005

Operation/Management

National regulation; possible further agreements at company level.

Ministry of Social Affairs and Labour together with the national labour inspection is responsible for the supervision of the implementation of the norms and stipulations foreseen in the Lithuanian Labour Code.

Eligible group(s)

All employees and employers

Group(s) with preferential treatment

None

Education and training eligible

Internal and external continuing
vocational training.

Source of financing and collection mechanism

Employer, employee

Financing formula and allocation mechanisms

Labour code includes a general clause on the reimbursement of training costs incurred by the employer in the last year in the event that the employee resigns without a valid reason (according to the law or contract terms); detailed conditions may be agreed upon in employment contract.

The law does not specify the exact (share of) costs to be reimbursed or the type of training that payback clauses may apply to.

The timeframe for reimbursement and the share of the training costs depend on the cost of the training; the amount to be reimbursed depends on the time between the training and the termination of the contract.

The costs for internal and external continuing vocational training can be covered by payback clauses; employees can be required to reimburse not only the fees and payments for training courses but also direct and indirect labour costs.

Reasons for payback clause to become efectve: voluntary resignation within binding period; dismissal due to a serious contract break; non-termination of the training.

Volumes of funding

Beneficiaries/take up

Organisation responsible for monitoring/evaluation

Ministry of Social Affairs and Labour of the Republic of Lithuania.

Most relevant webpage - in English

Most relevant webpage - local language

Sources

Ministry of Social Affairs and Labour, http://www.socmin.lt