Cases where employees must repay training costs when unilaterally terminating the contract

Is there a contradiction in the legal provisions regarding the reimbursement of training costs?

Article 62 of the LC 2019 regulates “training costs and the responsibility for reimbursing training costs” in cases of commitment violation.

In another provision, paragraph 3 of Article 40 of the LC 2019 regulates the obligation of employees when unilaterally terminating the Employment Contract (EC) unlawfully “Must reimburse the employer the training costs stipulated in Article 62 of this Code.” This content only limits when employees unilaterally terminate the EC against regulations; they must reimburse training costs, without mentioning reimbursement of training costs when employees unilaterally terminate the EC in accordance with legal regulations.

So, is this a contradiction in the provisions regarding the reimbursement of training costs?

In the viewpoint of A&D Law Firm, this is not a contradiction because these are provisions regulating the responsibility for reimbursing training costs for different cases, depending on whether employees have or have not signed the VTC, the commitment period, and whether employees violate the labor relationship. The following content will clarify this issue.

Differentiating cases of training cost reimbursement

What is unilateral termination of the EC?

Unilateral termination of the EC is the act of one party in the labor relationship actively terminating the EC regardless of the will of the other party.

The LC 2019 regulates the right to unilaterally terminate the EC of employees in Article 35 and employers in Article 36. Accordingly, termination, apart from the conditions for termination, must comply with the notice period regulations (except for cases exempt from the notice period regulations stated in the aforementioned articles). It should be noted that not all termination cases fall under these conditions; determining whether termination is lawful or not also depends on many factors, especially the termination basis (refer to related articles of A&D Law Firm).

Responsibility for reimbursing training costs in cases where employees unilaterally terminate the EC lawfully

Although after reviewing the provisions of the LC 2019, there is no provision showing that employees must reimburse training costs to employers when unilaterally terminating the EC lawfully, in practice, during trial activities, there are still cases where employees must reimburse training costs to employers if they do not fulfill their commitments, even if terminating the EC is lawful. Specifically:

• In cases where employees sign the VTC, and the VTC specifies the responsibility for reimbursing training costs according to Article 62 of the LC 2019: here it must be understood that the VTC is an independent agreement, separate from the EC, so this is a separate provision binding employees participating in the training, regardless of whether employees terminate the EC lawfully or unlawfully. Therefore, although employees do not violate the EC, in reality, they still breach the training commitment between the two parties, so they still have to reimburse training costs.
• In cases where employees sign the VTC but there is no specific content regarding the responsibility for reimbursing training costs: In this case, employers have no basis to request employees to reimburse training costs because the agreement between the parties does not bind them to this responsibility.
• In cases where there is no VTC signed between employees and employers: There is no binding relationship between employees and employers regarding training, so in this case, employees are not responsible for reimbursing training costs to employers.

Responsibility for reimbursing training costs in cases where employees unilaterally terminate the EC unlawfully

The law regulates provisions to ensure the rights of employers when employees do not comply with labor laws and/or agreements under the EC; in this case, it is adjusted according to paragraph 3 of Article 40 of the LC 2019 – that is: employees must reimburse training costs to employers, even if there is a signed or unsigned VTC or if the VTC does not specify the commitment period, training costs, or responsibility for reimbursing training costs.

Key points to note regarding reimbursement costs

Reimbursement amount for training costs:

• For cases where there is a signed VTC and the VTC specifies the “training costs” clearly: in the spirit of respecting the agreements of the contracting parties, the reimbursement will be made according to the specified items in the VTC. However, these expenses must be reasonable and fall within the list of expenses listed in paragraph 3 of Article 62 of the LC 2019: “Training costs include expenses with valid documents for payments to instructors, study materials, schools, classes, machinery, equipment, practice materials, other expenses supporting learners, and salaries, social insurance premiums, health insurance, and unemployment insurance for learners during their study period. In case the employee is sent for training abroad, training costs also include travel expenses, living expenses during training.”
• For cases where there is no signed VTC or the VTC does not specify/unclearly specify the training cost amount: if it falls under the category where employees must reimburse training costs (as analyzed above), the reimbursement amount will be calculated based on the actual expenses incurred by employers for that training and falls within the list of expenses mentioned in paragraph 3 of Article 62 of the LC 2019.

Additionally, it should be noted that if businesses want to be reimbursed for these expenses, they must provide documents, evidence proving reasonable expenses according to the provisions of paragraph 3 of Article 62 of the LC 2019.

The above is the advice content of A&D Law Firm regarding some issues related to the reimbursement of training costs. Contact us immediately for consulting and resolving specific cases. [The content is for reference only; readers should not use it as legal documents or bases for litigation].