Agreement for employee to repay relocation expenses

Author: Claire Birkinshaw

Consultant editor: Paul Tew

When to use this model relocation expenses agreement

Use this model agreement to obtain an employee's permission to reclaim relocation expenses in the event that their employment is terminated within a certain period.

Agreement wording

This document records my agreement with [name of employer].

In consideration of [name of employer] agreeing to [pay/contribute towards] my relocation costs in accordance with its relocation assistance policy, I undertake to reimburse to [name of employer] the whole or part of the relocation expenses if:

  • my employment is terminated for any reason [other than [voluntary or] compulsory redundancy, ill health or disability] within two years from the date that the [first/last] relocation expenses payment is made to me; or
  • I resign from my position within two years from the date that the [first/last] relocation expenses payment is made to me.

For these purposes, I understand that the assessment of the two-year period relates to the effective date of the termination of my employment and not to the date of my notice of dismissal or resignation.

I accept that the amount that I will be required to repay will be reduced on a sliding scale as follows:

Period of service (from the date of the [first/last] expenses payment made to me) Amount to be repaid (as % of total expenses)
0-6 months 100%
7-12 months 50%
13-18 months 25%
19-24 months Reducing from 25% by one-sixth of 25% for each completed month from 19 months to 24 months

In consideration of [name of employer] agreeing to [pay/contribute towards] my relocation costs in accordance with its relocation assistance policy, I undertake to reimburse to [name of employer] the whole or part of the relocation expenses if:

If my final salary payment and/or other sums otherwise owed to me by [name of employer] are not sufficient to meet the debt, I agree to repay the outstanding balance of the relocation expenses to [name of employer] within one month of the date of the termination of my employment.

After two years have elapsed from the date of payment of the relocation expenses, I acknowledge that I will not be required to repay any part of those expenses if I am still employed by [name of employer] on that date.

In the event that I do not relocate but remain employed by [name of employer], I agree that I will repay the relocation expenses in full (or such part of the relocation expenses as [name of employer] may in its discretion request) and I agree that the [name of employer] may deduct a sum equal to the relocation expenses from my ongoing net salary payments in accordance with a deductions schedule to be provided to me by [name of employer] at the relevant time.

I accept that the amount due to [name of employer] under the terms of this agreement represents a genuine attempt by [name of employer] to assess its loss as a result of the termination of my employment. I acknowledge that this agreement is not intended to act as a penalty on me upon the termination of my employment.

Signed:

[ ]

Date:

[ ]

How to use this document

This is an example document and should be adapted to suit your circumstances.

Supporting guidance for this document

Key resources

Notes

Unlawful deduction from wages: An employer that wishes to retain the right to recover relocation expenses directly from an employee's salary, should ensure that there is relevant provision in the contract of employment or that they obtain the employee's express consent in writing for this. Otherwise, any such deduction from the employee's wages is likely to be unlawful.

Drafting repayment clause: It is advisable to draft any repayment clause on a sliding scale so that the longer an employee remains with an employer, the less they are due to repay on leaving. If not, it is likely to be considered to be a penalty clause and therefore unenforceable.

Future developments

None.