I.T. CONSULTANCY TEN10 CLAIMS HE OWES NEARLY £7,000 FOR HIS TRAINING
*GRADUATE FOG EXCLUSIVE*
A graduate whose former employer claims he owes them nearly £7,000 for his training while employed by them is challenging the practice of charging so-called ‘exit fees’ by refusing to pay and telling them he’s prepared to go to court to prove the bill is unfair. Taking a stand on behalf of thousands of graduates thought to have signed heavy-handed contracts created by various employers seeking to claw back funds from graduates who leave their schemes in less than a stated period (typically two years), the graduate says he is looking forward to fighting his bill for what he describes as “basic” training which he says lasted only six weeks.
The graduate’s former employer is the IT and engineering consultancy Ten10, whose clients include the Home Office, Dyson, Capgemini, MoneySuperMarket and Center Parcs, according to their website. Other companies that have previously been challenged for using ‘exit fee’ contracts include IT consultancies Capita (who have since dropped the policy), FDM Group and Sparta Global, who also have big-name clients including government departments and large banks. It is unclear whether the clients of these firms are aware of the terms on which the graduates lent out to them for on-site work are employed.
Responding to questions around their scheme, Ten10 told Graduate Fog their fees were “considerably less” than the industry standard and that they provide welfare support throughout the two years, and high quality accommodation during training and often beyond. They also added that they were proud of their diversity and gender work in the UK and the US.
Graduate Fog has also challenged Frontline (the UK’s government-backed social care scheme for graduates) for operating a similar policy, having spoken to numerous distressed young people who say they feel unable to quit high-stress roles working with families with serious abuse and neglect issues, for fear of being billed for up to £10,000 to cover the training they have received.
Returning to Ten10, Graduate Fog has learned that those who quit the so-called ‘Ten10 Academy’ earlier than this particular graduate did – in less than a year – risk being charged up to £9,000. It is unclear how such a short period of training can be worth almost the same as a year of tuition at Oxford University.
The business management graduate – who we’ll call Rob – is one of a large and growing number of young people who have contacted Graduate Fog in recent months to say they feel ‘locked in’ to a graduate scheme they are desperate to leave, because they didn’t realise their employer had included a so-called ‘exit fees’ clause in their employment contract, or they didn’t understand its implications.
Some who spotted the clause have told us they assumed it was standard, especially when presented by a seemingly reputable employer. Some admit they were so optimistic about their new job that they never expected they’d want to quit so soon. Many who have signed these contracts felt there was no opportunity to challenge or remove the clause, without risking being seen as a troublemaker before they’d even started. Those who did question it say they were assured that so few graduates leave early that it was unnecessary to worry.
We have also heard from graduates who say they were so unhappy in their job that they quit anyway. Some have not been chased for the funds, but others are being hounded by lawyers for thousands of pounds they don’t have, which their former employer claims they must pay, or face legal action. Of the dozens of graduates we have spoken to, all have suffered extreme anxiety and stress, and fear the legal and financial implications, particularly how the debt may impact their credit score.
So, for them and many others, this case is significant. Rob gained a place on IT consultancy Ten10’s graduate scheme in October 2018, as a junior consultant. Offered an annual salary of £20,000, Rob happily signed the contract and started work. In an exclusive interview with Graduate Fog, he said:
“I admit that I did not look at the contract as carefully as I should have, before signing. I felt lucky to have landed what I thought was a good graduate job with a reputable firm as I’d struggled to find graduate level work since finishing uni a few years earlier. When Ten10 told me I was in the 3% of applicants who had been successful, I was really pleased — and even more eager to complete and return the documents and start work as soon as possible.”
Almost immediately, Rob’s excitement turned to disappointment. Although Ten10 insist they offer “first class technical training”, Rob says the reality is far from that. The six-week “training academy” in Leeds was — in Rob’s words – “basic” as graduates with technical backgrounds are taught alongside those with non-technical backgrounds, with very little one-to-one learning. Rob says there were often more than 20 people in the class.
During this time Rob says he lived with four other graduates in a shared house which appears to be used by Ten10 for temporary accommodation for the Ten10 Academy’s rotation of participants. Had Rob not needed this accommodation, he does not believe he would have been offered a discount on his exit fees, although the details of this remain unclear.
Once the job started properly, Rob says he found himself travelling over 100 miles per day — a three-hour commute — four days a week, to work at what he was told was the nearest available client location. This continued for months, with Rob spending an average of £25 per day on fuel and parking, from his own pocket. It was during this period that Rob checked his contract and realised he had no good options available. He remembers:
“It was a nightmare. I hated the role and the commute, but I realised I’d signed a contract which meant Ten10 could send me to any location they liked and there was nothing I could do. I knew that if I quit, I risked being served with a bill for up to £9,000 — which obviously I didn’t have. I felt trapped — and that it was all my fault.”
A year after accepting the job at Ten10, Rob was offered a better, permanent job much closer to his home. Checking his contract again, he realised that although he wouldn’t need to pay the top charge of £9,000 (the bill sent to graduates who quit in less than a year), he could expect still to be charged £6,750 as he had not yet served 18 months. (For graduates who quit after 18-24 months, the bill reduces further, to £4,500).
Rob decided to quit the Ten10 scheme, after agreeing to pay his former employer the £6,750 in monthly Instalments of £562.50. However, after paying the first month’s instalment, Rob found Graduate Fog’s articles about exit fees, and learned that a similar case to his is soon to be challenged in court.
So, Rob stopped his payments to Ten10, and decided to see what happened.
Like many graduates who have found themselves in his position after signing a contract including an ‘exit fees’ clause, Rob says the communication he has received since quitting Ten10 has left him feeling anxious and afraid.
Even against the backdrop of the coronavirus pandemic, Rob’s former employer has not let up. In fact, the latest letter Rob has received from Ten10’s law firm Black’s was dated 8 April, one of the days when the UK’s Covid-19 death rate was at its peak. Rob says:
“During the height of lockdown I was shocked to receive a letter from Ten10’s lawyers, demanding full payment of my remaining fees — £6,187.50 – in 12 days’ time. The fear of the unknown consequences of not paying the amount by that date has caused me overwhelming stress and anxiety.”
Unable to pay the bill, Rob decided to turn the tables, and find a lawyer — one of the best employment law barristers in the country, to be specific. Simon Cheetham QC told Graduate Fog:
“I think young graduates, who have left university with large loans to repay, are in a difficult position when their first job involves training costs, which effectively tie them to that job for a fixed period. It’s not about how good the training is, but the constraints those contracts place on these graduate employees, especially when there are then further restraints when they leave that job. If they have to repay the training costs, their total net pay may even amount to less than the minimum wage.”
Graduate Fog’s founder Tanya de Grunwald presented an outline of the above concerns to Ten10, and asked the firm to clarify how they justified charging such large exit fees to their departing graduates like Rob. Initially, CEO Chris Shaw said there were “factual inaccuracies” in the statements we presented – but he would not expand on what these were, seemingly because he had not been given enough time. When Tanya granted an extension, he replied:
“We are happy to enter a dialogue with you if you are willing to invest the time in visiting the Academy to develop an informed view. It is disappointing that you have not accepted my offers to find out more about the Academy first-hand. If you are not prepared to carry out your research diligently, I will politely decline your invitation to answer a few specific questions. However, I do take the opportunity to make the following comments.
“You know that there is a wide range of employer graduate schemes across the legal and accounting, as well as technology, markets in the UK which utilise ‘exit-fee’ contracts. At one extreme are those technology schemes you are right to criticise which combine such contracts with allegedly ‘cursory’ training and demands for (disproportionately high) training repayments. Furthermore, in many cases, the graduates are neither employed nor salaried during the training or for a subsequent period of up to 90 days whilst the training provider seeks to allocate the graduate to a client engagement. Ten10 views this practice as unethical and unfair to the individual.
“The Ten10 Academy is much more akin to the arrangements offered by the legal and accounting firms — a permanent contract of employment, salary and extensive benefits package from the start of training; full-time classroom based training provided by highly experienced industry experts for an initial period of up to 14 weeks followed by an on-going programme until graduation after two years; acquisition of industry recognised accreditations; a dedicated Welfare Team and provision of high quality accommodation (at no cost) throughout training and often for an extended period thereafter. The ‘exit-fees’ imposed by the legal and accounting firms are generally considerably more than £20,000; at Ten10 they are considerably less, taper down over time and are demonstrably much lower than the investment made in the individual. In addition, the starting ‘exit-fee’ (before taper) compares very favourably with the fees that would be charged by independent providers in the market place.
“Before publishing your article, we believe it would be prudent to be informed about the full range of ‘exit-fee’ schemes available in the market and where the Ten10 Academy sits within this range. I have extended an invitation to you to visit (either in person or virtually) the Ten10 Academy at our training centre in Leeds. This would provide you with the opportunity to experience the Academy in action — see the facilities and accommodation; meet the trainers, management and other team members and, of course, some of our graduates. This invitation remains open to you at your convenience and at which time our team would happily answer all your questions. In the meantime, I hope I have successfully outlined how it would be incorrect to say that Ten10 employs ‘exit-fee’ contracts in combination with ‘cursory’ or ‘crummy’ training. I would therefore be very concerned about the publication of any article which suggests this is the case.
“At Ten10, we have worked very hard to build a market-leading and award winning graduate Academy. We are proud of the role we play in driving the gender and ethnic diversity agenda in the UK and US technology markets as well as our unique ability to give graduates without a STEM background the opportunity to start and develop a career in this rewarding industry.”
In November 2019, Graduate Fog brought readers news that another graduate is challenging his former employer — Geeks Limited — over exit fees, in legal action that was scheduled for April 2020, but which has been delayed until November due to the coronavirus outbreak.
In that case, the graduate says he was initially told he would owe Geeks Limited nearly £16,000 if he quit straight after the six-week training period. The legal costs for that graduate’s case are being covered by the Good Law Project, run by campaigning barrister (and friend of Graduate Fog) Jolyon Maugham QC. Another case – also backed by the Good Law Project, involving a Sparta Global graduate – is also likely to go ahead in November.
We will keep our readers informed, as these cases continue…
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