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If an organization offers an online education policy as a perquisite (after being employed for a certain period) and the policy states that it's free for the employees if they opt-in and they'll have to pay 50% of the fee if they decide to leave the organization before completion of the course.

So if an employee opts-in to this policy, and after a while decides to leave the organization, can the organization change the policy right before that claiming that someone leaving (before completion of the course) will have to pay the complete amount (instead of the 50%).

Is this legal? If not, what are the possible ways to raise this without jeopardizing the whole thing and without it seeming like a legal threat?

Perquisite: a benefit (in lieu of salary) which one enjoys or is entitled to on account of one's job or position, which is taxable

Note: In the original policy it is stated that this policy can be changed without notice. But I'd think this would mean that it can be changed going forward, without explicitly having to inform anyone. Does that mean in anyway that it can also be enforced for agreements in the past?

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Is this legal? Does that mean in anyway that it can also be enforced for agreements in the past?

This is hard to answer because your description is somewhat confusing. The first paragraph is unclear as to whether the benefit at no-cost is contingent only on the employee's completion of the course prior to leaving the organization, or also on the employee being employed for at least a certain period (regardless of the duration or completion of the course). For simplicity, I'll assume the former scenario. Also I'll assume that the benefit the organization provides is a course, not a policy.

A party cannot unilaterally alter a contract or agreement, at least where the change is detrimental to the counterparty. However, the disclaimer "this policy can be changed without notice" complicates the assessment. The issue depends on whether the employee's notice of resignation preceded the employer's change of terms.

On the one hand, the disclaimer is tantamount to what the Restatement (Second) of Contracts at § 154(b) labels as [employee] bearing the risk of mistake: The employee had limited knowledge of whether, when, or how the organization might change the policy, and yet the employee accepted the disclaimer.

On the other hand, the reliability of contracts is severely weakened if either (or both) party(-ies) is entitled to unilaterally modify conditions. The disclaimer as portrayed does not even clarify that only the organization may change the policy. Thus, the disclaimer seemingly entitles the employee to change the policy to the organization's detriment just as it entitles the organization to do so.

The disclaimer (again, as portrayed) is sloppy enough to render itself meaningless: Each time a party changes the policy, immediately thereafter the counterparty may change the new policy to the effect of restoring it to the original.

The analysis ought to focus on what conditions the employee reasonably could have pondered by the time he gave his notice of resignation. Otherwise, the disclaimer would give the organization carte blanche to even require full reimbursement of the course, regardless of duration of employment and regardless of how long ago the employee completed it.

Given that the employee agreed to the disclaimer, the conclusion that the organization's change of policy cannot be retroactive to the employee's notice of resignation is most consistent with the tenets of contract law.

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  • Thanks, this is super helpful. I'm also adding the details in case you'd want to add anything. The policy allows employees to take up an online course without having to pay for it if they've spend x amount of years at the organization. Once they enroll, they can do it for free unless they want to leave the organization before completion of the course. In that case they're liable to pay 50% of the course fee. According to the new policy, they have changed the returnable amount to 100% and are trying to enforce it on the people who enrolled under the last policy.
    – Yankee
    Aug 15 '20 at 13:09
  • Also, this change was made after the start of employee's notice period (and before the end of the notice period).
    – Yankee
    Aug 15 '20 at 13:10
  • It is contingent on employee being at the org for x amount of years. Once they've spent that many years at the org, they are eligible to opt for a course under this policy. Also, only the employer has the right to change the policy, I realize that my wordings could've given possibly an alternate meaning as well. Sorry about that
    – Yankee
    Aug 15 '20 at 13:13
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    @Yankee "this change was made after the start of employee's notice period". Then, for the reasons explained in the last two paragraphs of the answer, it would be unlawful to apply on that employee the change. Aug 15 '20 at 13:33

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