Do employees have to refund training costs when terminating labor contracts in accordance with the law of Vietnam?

First, it is necessary to determine whether the employee and the employer have signed a training contract?

The Labor Code 2019 of Vietnam has the following provisions:

"Article 62. Occupational training contract between an employer and an employee, and occupational training costs

1. Both parties must enter into an occupational training contract in case the employee is provided with advanced training or retraining at home or abroad funded by the employer or sponsorship from the employer’s partner.

The occupational training contract shall be made into 02 copies, each of which shall be kept by a party.

2. A vocational training contract shall have the following major contents:

a) The occupation in which training is provided;

b) Location, time of training and salary for the training period;

c) The work commitment period after training;

d) The training costs and responsibility for reimbursement thereof;

dd) Responsibilities of the employer;

e) Responsibilities of the employee.

3. Training costs include those specified in valid documents on payments for trainers, training materials, training locations, equipment, practice materials, other supportive expenses for the learner, the salary, social insurance, health insurance, and unemployment insurance premiums paid for the learner during the training period. In case the employee receives the training overseas, the training costs also include the traveling and living expenses during the training period."

In addition, Article 40 of the Labor Code 2019 of Vietnam also provides:

"The employee who illegally unilaterally terminates his/her employment contract shall:

1. Not receive the severance allowance.

2. Pay the employer a compensation that is worth his/her half a month’s salary plus (+) an amount equal to his/her salary for the remaining notice period from the termination date.

3. The employee shall reimburse the employer with the training costs in accordance with Article 62 of this Code."

According to that, the employee who illegally terminates the labor contract is obliged to refund training costs to the enterprise. So, in case the employee terminates the labor contract in accordance with the law, does the training cost have to be refunded?

A specific situation in the Judgment on disputes over labor contracts, training contracts, wage claims, social insurance, health insurance, unemployment insurance and compensation for damage No. 01/2019/LD-ST between the plaintiff, Ms. Nguyen Thi Ngoc D and the defendant is Company Y adjudicated by the People's Court of Thu Dau Mot city, Binh Duong province, Vietnam with the following contents:

“Ms. D worked at Company Y from September 1, 2015 to August 31, 2017 with her specialty as a Medical Doctor. She has signed two contracts with the company: The first contract is valid from September 1, 2015 to August 31, 2016, and the second contract is from September 1, 2016 to August 31. 2017 , according to Training Contract No. 150/HDĐT, Ms. D went to radiation safety training for staff operating medical equipment for a period of 3 days with the agreement "After training, she must work for Y Tam Giao Limited Company - Hospital for Obstetrics and Gynecology B for at least 3 years. If you do not work for the hospital or do not work for the full time committed under the training contract, you must compensate 300% of the entire training cost."

On July 28, 2017, Ms. D sent a notice to the Company about not continuing to work at the Company when the labor contract ended on August 31, 2017 and Ms. D did not work at the Company since  September 1, 2017. Ms. D asked the company to terminate the labor contract with her, forcing the company to pay her salary and insurance when she attended the training. Company Y has a counterclaim requesting her to refund training costs and compensate for unilaterally terminating the labor contract.”

According to the provisions of Article 43 of the Labor Code of Vietnam, the employee is only obliged to pay compensation for training expenses when unilaterally terminating the labor contract illegally, the court said. According to the law, Ms. D terminated the labor contract with the Company in accordance with the regulations, so she was not obliged to compensate the Company the amount of VND 19,140,000. During the working process, Ms. D did not violate the rules, was not disciplined, and Ms. D quit her job in accordance with the law, so there is no connection between Ms. D's resignation and the Company's damage. Ms. D's resignation is a violation of the commitment of working time under the contract signed between the two parties. Therefore, Ms. D must compensate the company for training costs.

It can be seen that, although the Labor Code 2019 does not have any provisions forcing employees to refund training costs when terminating the labor contract in accordance with the law. However, in practice, even if the employee terminates the labor contract in accordance with the law, the employee still has to refund the training costs to the employer if he fails to keep the commitments in the training contract.

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