Termination Essentials

NZPPA Certificate in Payroll Termination Essentials (Level 4)

Bonding Agreement

Many employers will support their employees financially by allowing them to undertake ongoing professional development and training from an external provider. This financial support can be seen as part of the employee's role, and the business will treat this funding as an expense that it fully covers or as part of the business's culture to develop its employees. Some businesses that make this type of investment will want some reassurance that they will get a return on investment, so they create a formal agreement, typically known as a bonding agreement, to set the conditions of the financial support. Supporting an employee to do training may not just include the actual cost of the course but time out of the workplace (on an ongoing basis), for example, exam preparation. • Repayment of the fees paid for the training if the employee does not complete or was not successful in achieving the training requirements that were agreed to be undertaken (employee pulls out of the training). Usually, it is based on all fees paid or pro rata, and its value is based on the time the employee stays in the training. • The employee agreed to stay in business for a time after the training has been completed. If the employee wants to leave prior to the agreed time period, then they have to repay the total cost of the training funded or pro rata its value based on the time worked since their training was completed. There are two main areas that this type of agreement will cover, being:

© New Zealand Payroll Practitioners Association, Mar 2026, Ver 9

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