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I'm 8 months into a position and I've decided to move on. HR informs me that there is a relocation expense clawback clause in my contract. I had no knowledge of such a clause. I checked my contract and there is no such clause.

HR then said it was in my offer letter. I checked my offer letter and there is no such clause. HR then said the information is in a policy document referenced in the offer letter.

I checked the policy document and the clawback details are there. It seems rather underhanded that they hid such important information in an unsigned reference document.

I don't know much about contract law, but I would think that the clawback information in a referenced document does not constitute a legally binding contract clause. Do I have a leg to stand on to fight this?

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    IANAL but if it's there it's there, it is your job to read such details. They don't have to verbally disclose such information as long as it's in some form of legal contract document
    – Twyxz
    Commented May 9, 2019 at 9:24
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    IANAL You may want to check out if you had access to that policy when you were given the offer letter, because if you could not read it at the time then it may not be valid... BUT you need to talk to a lawyer... And you might find they will just avoid it as too "noisy" and not do the clawback - you never know.
    – Solar Mike
    Commented May 9, 2019 at 10:30
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    You may get better legal advice if you add your jurisdiction and repost at law.stackexchange.com . Chances are that if the information was availabel to you at signing, it's binding. Otherwise it's not. Since it's murky, you could try to settle: if the clawback holds for a year and you have serve 8 month, you could agree on re-paying on third. That's still cheaper than a lawyer or legal action
    – Hilmar
    Commented May 9, 2019 at 12:19
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    @Ister "read all complimentary documents" One should also read documents even if they're insulting.
    – Acccumulation
    Commented May 9, 2019 at 16:02
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    "the information is in a policy document referenced in the offer letter" The word "referenced" is rather vague. What was the wording?
    – Acccumulation
    Commented May 9, 2019 at 16:03

4 Answers 4

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If it's not in the contract, it's not in the contract.

An "offer letter", as has been stated elsewhere on this site, is not a contract and does not form part of one (in the UK at least; check your own jurisdiction).

In any case, when did you first see the policy document? If it was not supplied with the contract for you to look at prior to signing, it does not form any part of the contract. [I had actual, real world experience of this about 4 years ago, when a good friend had a similar issue over the employee handbook, and we were advised the above by his solicitor (UK)]. Many contracts do stipulate that the employee 'abide by the terms in the {company document}', but unless it has been seen prior to signing...

HR are on the backfoot on this one, as clearly evidenced by changing their story.

Be polite, but firm with them and make sure you have all of this documented, taking personal copies of everything, including the aforementioned policy document. Depending on the amount involved, either a) pay it back, or b) continue arguing with them (and do everything in writing), or c) See a lawyer.

I'd start with c), as here (UK) as the first hour or letter is free if you start with the Citizens Advice Bureau.

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    +1 for Citizens' Advice Bureau. They offer excellent (and free) employment advice from qualified lawyers. Take along all your documentation for review.
    – Laconic Droid
    Commented May 9, 2019 at 11:43
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    An "offer letter", as has been stated elsewhere on this forum, is not a contract and does not form part of one. Is that a clear fact, everywhere? In my experience, "offer letter" is slang that can mean different things in different parts of the world. In the US, it is common for the offer letter to essentially be the contract, in the sense that it is a letter that describes the terms of employment, both parties are required to sign it, and there is no actual separate work contract.
    – dwizum
    Commented May 9, 2019 at 12:32
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    Thanks @dwizum. I don't know about elsewhere, and have updated my answer to reflect this.
    – Justin
    Commented May 9, 2019 at 13:01
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    Particularly, if the offer letter is the place where the relocation expenses are promised, it may be the contract for relocation (as opposed to ongoing employment).
    – Sean Houlihane
    Commented May 9, 2019 at 15:29
  • Whatever the meaning of terms like "offer letter" might be in your jurisdiction, if makes no sense that you are required to accept the offer before you have read the actual final contract documentation.
    – alephzero
    Commented May 9, 2019 at 17:32
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It will depend on jurisdiction.

Just because something appears in a policy doesn't make it enforceable, especially because generally policies are able to be changed at any time. This makes them conceptually different from contracts which is an agreement between two parties.

In some jurisdictions, not following policy means they can fire you, but it does not mean they can withhold pay.

My gut feel is that such detail should have been in the contract. You may want to ask in law.stackexchange.com

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    In most jurisdictions, they can never withhold pay, whatever the reason. They can take you to court and ask for money, but they cannot withhold pay for hours that you worked.
    – gnasher729
    Commented May 9, 2019 at 12:12
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Here’s the good news: they can’t just take your money. If they want it, they would have to go to court. Which costs them time and money (and worst case, once they had all their cost, you just pay).

Anyway, it’s hard to see how you could be ordered to pay, when there are three documents you signed not mentioning it, and only one that you couldn’t read before signing the contract.

PS. They are not allowed to deduct this from your last salary.

PS. They are not allowed to deduct this from his last pay check. Doing so is such a slum dunk losing case that any employment lawyer will be happy to take your case and make them pay. In addition, if they then wish to go to court for the relocation expenses and the judge hears what they have done, he will go down on them like a house of bricks.

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    Sure they can keep his last paycheck(s). It might not be legal, but they can do it. It then forces the OP to go to court to recover the money. The OP then has to make a decision, is it worth the time and money to recover the withheld paycheck(s).
    – MaxW
    Commented May 9, 2019 at 14:59
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    It also costs the OP time and money. And if they win, they very well could ask for their legal fees to be added to amount owed.
    – Acccumulation
    Commented May 9, 2019 at 15:55
  • "They are not allowed to deduct this from your last salary." Could you please provide a source and specify a location for this? I am guessing this is not applicable everywhere.
    – David K
    Commented May 9, 2019 at 17:18
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    U.K., USA, Germany, probably all of the EU.
    – gnasher729
    Commented May 9, 2019 at 17:20
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Disclaimer, i am not a lawyer and have no knowledge of your location.

IMHO, if they didn`t make an effort for you to find this clause, its not part of the contract.

In one of my work places its was stated in the contract that during the first week new hires have to go over the policy binder and sign their acknowledgement of abiding by the policies related to them for each policy separately.

If financial clause was not part of your contract or policies you read and agreed upon employment, HR have no right to enforce it.

Nevertheless, if its not the amount you care to pay, schedule some time to see the lawyer that specialize in these kinds of matters

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