How can employers claim training costs from their employees?

Date: 22 May 2021

Writer: BLawyers Vietnam

One of our corporate clients asked us about their dispute with an employee regarding training costs. Such employee received the company’s supports on training costs and then terminating his labor contract by one-side with the company. The client wants to recover fully the costs paid to the employee, but can the law of Vietnam allow like this? By this article, BLawyers Vietnam would bring some notes regrading training costs that employers should pay attention to.

How can employers claim training costs from their employees?

1. How to record the training costs from employers to employees?

Employers and employees should enter a vocational training contract if an employer provide an employee supports on skills development by its funds. Accordingly, the employee will commit to work for the employer within a certain period after the training course.

According to Labor Code 2019 (“LC”) and Law on Vocational Education (“LoVE”), a vocational training contract must have the following contents:

(a) training field or vocational skills;

(b) place, period of training and salary of trainee who makes products for the employer during the training period;

(c) training costs and responsibility for reimbursement thereof;

(d) period that the employee commit to work for the employer after the training course;

(e) responsibilities of the employee;

(f) responsibilities of the employer;

(g) commitment of the employer to employ the trainee after completion of training;

(h) responsibility for compensation in case of breaches of the contract committed by each party; and

(i) Termination of contract.

2. Which is training costs that employer can claim from their employees?

Not all costs incurred in connection with the training process are considerable as training costs. Per the LC, training costs include: valid documents on expenses paid for trainers, training documents, training locations, devices and materials for practices, other expenses supporting to employees and amounts of wages, social insurances, health insurances and unemployment insurance premiums paid for employees during the training period. In case employees attend a training abroad, the training costs also include travel and living expenses abroad.

The parties should record such costs in vocational training contracts and having full payment receipts or documents.

3. Which cases that employer can claim training costs from their employees?

The legal ground for that reimbursement is the labor contract, the vocational training contract and payment documents. An employee must reimburse the training cost to the employers in 02 below cases.

Firstly, the employee unilaterally terminates the labor contract illegally:

According to the LC, the employee who illegally unilaterally terminates his/her employment contract shall reimburse the employer with the training costs.

However, it is worth to note that the employee can terminate unilaterally the signed labor contract by some cases:

(i) Not being arranged in accordance with the job, workplace or not guaranteed the working conditions agreed in the labor contract;

(ii) Not being paid in full or on time except for a force majeure event;

(iii) Being maltreated, assaulted, physically or verbally insulted by the employer in a manner that affects the employee’s health, dignity or honor or forced to work against his/her will;

(iv) Being sexually harassed in the workplace; or

(v) Other cases pursuant to the LC.

In addition, depending on the type of labor contract, the employee must comply with the prior notice period as the LC requested. Moreover, according to Decree No. 145/2020/ND-CP, there are some case that an employee must notice the employer at least 120 days before the termination date.

Secondly, the employee breaches the vocational training contract

The term of training cost reimbursement is a compulsory content in the vocational training contract. Both parties should agree which cases that the employee must reimburse the training cost to the employer. Article 61.2 of LoVE provides that “the trainee graduated from training courses as scholarship or training fees provided by the employers must work for the employer according to the period as agreed in the training contract; in case they fail to fulfill their commitment, they must refund scholarship or training fees”. Commonly, the employer may claim the training cost if employees failed to complete the training or breached the commitment of working for the employer after training courses and other cases as agreed.

In fact, there are several disputes related to training costs due to employees violating their commitment to work for businesses to get new opportunities with higher salaries or they do not agree to refund training costs or only partially reimburse the expenses. To limit risks arising, employers should give specific terms in vocational training contracts as we mentioned above.

Should you have any questions about the above contents, please revert to BLawyers Vietnam at consult@blawyersvn.com.

Maybe you are interested in reading:

What is noteworthy about sexual harassment under the Labor Code 2019?

Notable changes to new Labour Laws

Legal notes before entering labor agreement (from 01 January 2021)

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