What are regulations on compensation in Vietnam when a person unilaterally resigns before the commitment period ends?

What are regulations on compensation in Vietnam when a person unilaterally resigns before the commitment period ends?​ (Illustrative image)

1. When does an employee in Vietnam need to commit to a working period?

Firstly, a commitment to a working period arises in the following cases:

- First: Between the employee and the employer, an apprenticeship contract is signed according to the provisions of Article 62 of Labor Code 2012.

Article 62. Apprenticeship contract between employer, employee, and training cost reimbursement

1. The two parties must sign an apprenticeship contract if the employee is trained, improves his/her professional skills, undergoes retraining domestically or abroad at the expense of the employer, including expenses paid by partners for the employer.

The apprenticeship contract must be made in 02 copies, each party keeps 01 copy.

2. The apprenticeship contract must include the following principal contents:

a) Training profession;

b) Training location, training duration;

c) Training cost;

d) The duration the employee commits to work for the employer after training;

dd) The responsibility for reimbursing training costs;

e) Responsibilities of the employer.

- Second: Officials and public employees sent for training from intermediate level upwards using state budget or the budget of the management and utilizing agencies. According to Clause 3 Article 7 of Decree 101/2017/ND-CP on training and retraining officials and public employees, if violations occur under the circumstances below, the training costs must be reimbursed:

Article 7. Reimbursement of training costs

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3. Having completed and been awarded a graduation certificate but quitting the job or unilaterally terminating the employment contract before fulfilling the committed service time as prescribed in Article 5 or Article 6 of this Decree

Thus, employees who do not fulfill the agreed working period are required to compensate. The compensation costs are specified as follows.

2. Compensation costs for not fulfilling the committed working period in Vietnam

For the first case: The employee must reimburse all training costs and other compensation (if any). Training costs include all expenses with valid receipts paid for trainers, study materials, school, class, machines, equipment, practice materials, other support costs for learners, and wages, social insurance, health insurance contributions for learners during the training period. If the employee is sent for training abroad, training costs also include travel and living expenses during the overseas training period (according to Clause 3 Article 62 of the Labor Code 2012).

For the second case: The reimbursement cost includes tuition fees and all other expenses serving the course, excluding wages and allowances (if any) (according to Clause 1 Article 8 of Decree 101/2017/ND-CP on training and retraining officials and public employees).

The method of calculating the reimbursement cost is specified in Clause 2 Article 8 of this Decree.

Article 8. Reimbursement costs and calculation methods

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2. Calculation method of reimbursement costs:

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b) For cases specified in Clause 3 Article 7 of this Decree, the reimbursement cost is calculated as follows:

S = F ÷ T1 x (T1 - T2)

Where:

- S is the reimbursement cost;

- F is the total actual cost paid by the agency or unit for one participant in the course;

- T1 is the required service time after completing the course(s), calculated in full months;

- T2 is the service time after training, calculated in full months.

Example: Mr. A was sent by the agency to pursue a master's degree for 2 years (= 24 months), costing 30 million VND. According to the agreement, Mr. A must serve at least 48 months after returning from training. Upon graduation, Mr. A served the agency for 24 months and then voluntarily quit. The training cost Mr. A must reimburse is:

S = 30 million VND ÷ 48 months x (48 months - 24 months) = 15 million VND

For further details, see: Labor Code 2012, Decree 101/2017/ND-CP.

Nguyen Phu

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