Vocational Training Agreements And The Responsibility To Refund Training Fees

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Vocational Training Agreements And The Responsibility To Refund Training Fees

On 1st January 2021, the Labor Code 2019 with various amendments and innovations to minimize the burden of administrative procedures on employers as well as better ensure the rights and benefits of employees, came into effect. Correspondingly, provisions on apprenticeship, practical training and vocational training agreements are more specific and detailed than in the former Labor Code. However, some contentious issues regarding training agreements and the responsibility to refund training fees are still not resolved. Therefore, within the scope of this article, the author will discuss the issues concerning training agreements as well as the duty to refund training fees that enterprises should take into consideration when entering into this type of agreement.

1. General provisions related to Vocational Training Agreements

A training agreement is a contract of rights and obligations between an employer and an employee in case the employer provides training in order to enhance the qualifications and skills of the employee currently working for them (“employee”), or between an employer and an apprentice or trainee in case the employer recruits people for training to work for them. 

Training activities shall be carried out by an enterprise with its budget or sponsorships for the purpose of training its own workforce, not generating benefits from these training activities.

  • Case 1: Signing vocational training agreements with employees

If an enterprise provides training to enhance the qualifications, professional skills or re-training for its employees, the enterprise and the employees shall sign a vocational training agreement as prescribed in the Labor Code 2019 with the following main contents:

  • The training occupation;
  • The location and duration of the training and the wages to be paid during the training period;
  • Time committed to compulsorily work after being trained; 
  • The training fees and the responsibility to refund the training fees;
  • The responsibilities of the employer;
  • The responsibilities of the employee.

  • Case 2: Signing vocational training agreements with apprentices and trainees

Enterprises can recruit the workers for vocational training in their workplace (also known as “apprenticeship”) or recruit the trainees to guide them in job training, practical training according to work positions in the workplace for a period of time not exceed 03 months (also known as “practical training”), in order to train their human resources. 

Apprentices, trainees recruited by an enterprise must be aged a full fourteen (14) years or more and have health being adequate for the requirements of the apprenticeship or practical training. As to enterprises that recruit apprentices, trainees for jobs on the list of heavy, hazardous, toxic or dangerous jobs or extremely heavy, toxic or dangerous jobs, the apprentices, trainees must be aged a full eighteen (18) years old or more, except in the sectors of the arts, physical training and sports.

When an enterprise recruits people for an apprenticeship or practical training, it is not required to register vocational training activities, must not collect tuition fees, must remunerate the apprentices, trainees if the apprentices, trainees directly work for the enterprise during the period of apprenticeship, practical training and must sign a training agreement as prescribed by the Law on Vocational Education with the following contents:

  • The name of the job being trained or the professional skills acquired;
  • The training location;
  • The completion time of the course;
  • The tuition fees and the method of paying the tuition fees;
  • The responsibility of each party to compensate for loss and damage when violating the agreement;
  • The liquidation of the agreement;
  • The learner’s commitment to work for the enterprise;
  • The enterprise’s commitment to employing the learner after completing the course;
  • Agreements about the time and wage rate for learners who directly or participate in making products for the enterprise during the period of training.
  • Other agreements were not contrary to the law and social morality.

After completing the apprenticeship or practical training, the enterprise must enter into a labor contract with the learner if the learner satisfies the conditions required by the enterprise and prescribed by the law.

2. The responsibility to refund training fees

With respect to refunding training fees, pursuant to the provision of Clause 2, Article 61 of the Law on Vocational Education, people who graduate from training courses with scholarships granted by or training fees covered by an employer but do not work for that employer for a period as committed in the training agreement, have to refund the scholarships and training fees. 

Meanwhile, according to the Labor Code 2019, the refunding of training fees will be conducted in accordance with the agreements between the enterprise and the employees specified in vocational training agreements or when the employee unilaterally terminates the labor contract illegally. 

 So, according to the Law on Vocational Education, apprentices, trainees have the responsibility to refund training fees when they violate the working term committed under the training agreement regardless of whether the termination of the contract was legal or not. However, provisions on the refunding duty in the Labor Code 2019 pose some problems. In particular, currently, the Labor Code 2019 only regulates that employees must refund training fees in case they unilaterally terminate the labor contract illegally, whereas there are no provisions on refunding training fees when they unilaterally terminate the labor contract legally. Therefore there are many cases in which although the enterprise and the employee had entered into a labor contract, there were no explicit provisions on the refunding duty, and the employee terminated the labor contract legally and exploited this loophole to avoid the responsibility to refund training fees, causing frustration for many enterprises.

Moreover, the rates of training fees that employees have to refund to their employers are also a conundrum to enterprises. Currently, according to the Labor Code 2019, training fees comprise fees with valid source vouchers for fees paid to trainers, training materials, school classes, machinery, equipment and practical materials, other fees paid to support the trainee, wages, social insurance, health insurance and unemployment insurance paid for the trainee during the training period. In case an employee is sent overseas for training, the training fees also include traveling and living fees for the employee’s training period. When a dispute over the refunding of training fees arises, the courts will determine the rates of training fees which the employee has to refund to the employer based on the above provision about training fees and request the employer to provide legitimate receipts and source vouchers as evidence. However, many enterprises cannot sufficiently provide valid source vouchers as proof of the expenses they covered to train the employees, leading to not receiving the full training fees they paid for the employees. 

Therefore, when drafting and signing training agreements with employees, apprentices or trainees, enterprises need to stipulate the committed working term and the refunding duty with a detailed table listing all the training fees the employees, apprentices, trainees are expected to refund in case of violation of the committed working term. At the same time, enterprises shall sufficiently collect and archive the source vouchers on the expenses that they have covered to train the employees so that they can be used as evidence if any dispute arises.

If you have any questions or require any additional information, please contact Apolat Legal – An International Law Firm in Viet Nam.

This article is for general information only and is not a substitute for legal advice.