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Trang ChủSharing of expertiseLabourQuestion 20: When definite-term Employees are sent abroad for long-term training, some...

Question 20: When definite-term Employees are sent abroad for long-term training, some enterprises request Employees to sign training contracts, including the period that Employees undertake to spend working for the enterprises following the training course and the compensation obligation in case of their violations. So, can the period that Employees undertake to spend working for Employers be longer than the term of the signed LCs? If yes, is it all right for Employees not to renew LCs when LCs expire? Is it correct that the compensation amount must be diminished according to the time that Employees have spent working after the training course or just a violation will force them to pay the whole compensation amount? Can Employers specify a compensation amount larger than the amount that they have spent on the training course?

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Can the period that Employees undertake to spend working for Employers be longer than the term of the signed LCs?

Pursuant to Article 62.2 of the Labor Code, training contracts must include the following main contents: a) job to train; b) training location, training period; c) training costs; d) the period for which Employees undertake to work for Employers after being trained; đ) the responsibility to re-pay training costs and Employers’ responsibilities. However, the Labor Code and its guiding documents do not provide guidelines on the period that Employees undertake to work as compared to the term of the signed LCs.

As such, the applicable labour law allows Employers and Employees to freely agree on the matters in training contracts, including the provision on the period that Employees undertake to work for Employers after being trained. In other words, the parties may agree on a working period in training contracts longer than the term of the signed LCs.

If yes, is it all right for Employees not to renew LCs when their LCs expire?

Pursuant to Article 36.1 of the Labor Code, when LCs expire but Employers and Employees cannot reach an agreement on renewing LCs, the two parties may terminate LCs (except for the case the Employee is a non-dedicated trade union member in his current office term while the LC expires, the LC shall be extended to the end of the office term). However, the labour law does not provide particularly for whether Employees may terminate LCs on the basis that LCs have expired and they do not wish to renew LCs while the period for which they undertake to work for Employers under training contracts has not expired. Regarding this matter, there are now two points of view defending Employers and Employees as follows:

First point of view – defending Employees on the perspective that LCs have been signed between Employers and Employees. [MRK1] In particular, Article 36.1 of the Labor Code allows the parties to terminate LCs if they cannot reach an agreement on signing new LCs when existing LCs have expired (except for the case the Employee is a non-dedicated trade union member as aforesaid). So, if Employers and Employees cannot reach an agreement on the regimes for Employees to renew LCs (e.g. properly raising salaries and

On the other hand, the second point of view – defending Employers – contends that the two parties have established a civil relationship through training contracts, so they are obliged to discharge the obligations in training contracts, including the obligation on the period for which Employees undertake to work for Employers. Accordingly, when LCs have expired, Employees are obliged to renew LCs with Employers to discharge the obligation on the period for which they have undertaken to work for Employers in training contracts, instead of unilaterally requesting pay raises or benefits.

In consideration of the two points of view and to minimise the risks as well as strengthen the evidence before the court in case of a dispute with Employees, Employers should expressly set forth in training contracts a provision that Employees are obliged to renew LCs when LCs expire to ensure compliance with the provision on the period for which Employees undertake to work as prescribed in training contracts. In addition, Employers should also specify the obligation to repay training costs in case Employees fail to comply with the provision on the committed working period (including the case where Employees request to terminate LCs and training contracts for the reason that LCs have expired). Employers will thereby have solid grounds to defend their rights and interests before the court in case of a dispute with Employees.

Is it correct that the compensation amount must be diminished according to the time that Employees have spent working after the training course or just a violation will force them to pay the whole compensation amount? Can Employers specify a compensation amount larger than the amount that they have spent on the training course?

Pursuant to Article 62.2 of the Labor Code, one of the contents that must be included in training contracts is the Employee’s liability to repay the training costs that Employers have spent for Employees. So, there is no regulation on other amounts that Employers may request Employees to pay besides the training costs. Since labour law always protects the Employee’s rights and interests, if Employers specify a provision that Employees must pay another amount, besides the training costs, for the Employee’s breach of training contracts (even larger than the total training costs that Employers have spent on the training course), this may be considered as not in line with the Labor Code. Then, if Employees initiate lawsuits at competent courts, it is possible that the courts will not accept the Employer’s request for compensation in this case. In addition, in a talk with a labour officer of the DOLISA of Ho Chi Minh City, they also maintained the same point of view as aforesaid. As such, Employers should only specify the obligation of repaying training costs in case Employees breach training contracts.

Concerning the repayment of training costs, the applicable labour law does not particularly provide for how much Employees must repay to Employers when they breach training contracts. Therefore, this amount will depend on the agreement between the parties in training contracts and the relevant valid invoices or source documents as prescribed by the law on CIT. However, in practice, some enterprises often apply the principle of diminishing the training costs according to the time that Employees have spent working for Employers following the training course. For example, the period for which Employees undertake to work for Employers is 24 months. If Employees resign between the first month and the twelfth month from the time the training course ends, they must repay 75% the training costs to Employers. If Employees resign between the thirteenth month and the twenty-fourth month from the time the training course ends, they must repay 50% the training costs to Employers. The calculation method based on percentage is fair for Employees and also a way to prevent possible disputes from Employees.

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