Overview of training relationships in labor

A challenging labor issue for employers is managing training cost reimbursement when employees fail to meet their commitments to the enterprises. To handle this issue effectively, employers must make decisions based on labor contracts, vocational training contracts and relevant legal regulations. TNTP will publish a series of articles about “Reimbursement of Training Costs for Employers” to provide our readers with a clear understanding of this matter. The following article is the first one with the topic: “Overview of Training Relationships in Labor”.

1.Training relationship between employers and employees

1.1 Training and Vocational training contract

Training activities in this article refer to enterprises using their own funds (including partner-sponsored funds) to organize training for individuals including: current employees or future employees. These activities focus on developing the enterprise’s human resources rather than generating profit from the training itself.

Accordingly, a vocational training contract or training contract is an agreement between an employee and employer in which the employer provides training to enhance the employee’s professional skills using either company funds or partner-sponsored funding (training costs). In some cases, employees may be required to cover a portion of these training costs.

The vocational training contract must include the basic requirements specified in Article 62 of the Labor Code 2019 and Article 39 of the Law on Vocational Education 2014. After the training period ends, both parties must sign a labor contract if they meet each other’s conditions.

1.2 Labor relations and Training relations

A labor relationship begins when an employer hires an employee and continues throughout the employment period. The establishment and maintenance of labor relations are formally documented in a labor contract. As defined in Article 13 of the Labor Code 2019, a labor contract is an agreement between employee and employer that specifies the paid job, salary, working conditions and both parties’ rights and obligations in the labor relations.

Legal regulations on vocational training distinguish between two types of training: (i) pre-employment vocational training and (ii) training or upskilling employees during their employment. Therefore, vocational training relationships can be established either before or after the labor relationship arises.

Although there are differences in purpose and content, labor and training relationships are closely connected:

• Training relationship is a part of the employment relationship: When an enterprise needs to enhance employees’ skills to meet job requirements, a training contract is signed after the labor contract. In some cases, both contracts may be established at the same time when enterprises need to train new employees from the beginning of their employment.
• Work commitment after training: When employers cover training costs, the training contract typically requires employees to work at the enterprise for a minimum period after completing the program. If employees violate this commitment (such as resigning early), they may be required to reimburse the training costs according to the agreement or legal regulations.
• Rights and obligations of both parties: The training contract does not replace the labor contract but serves as an additional agreement outlining the employee’s obligations, especially regarding the reimbursement of training costs if they do not comply with their commitments.

Employees are legally obligated to reimburse their employer for training costs if they do not complete their agreed-upon work period after training. This obligation is specifically outlined in Article 62 of the Labor Code 2019 and is enforced based on the terms set in the training contract between both parties.

2.Basic obligations of employees after training

After completing a training program funded partially or entirely by the employer, employees have several key obligations under Article 62 of the Labor Code 2019 and the terms in the training contract. These obligations ensure that the enterprise’s investment in training is protected. The main obligations include:

• Work commitment obligation: Employees must work for their employer for the minimum duration specified in the training contract. The length of this commitment is typically based on the cost and extent of the training provided. If employees leave before completing their committed period, they may be required to reimburse part or all of the training costs as outlined in their agreement.
• Confidentiality and protection of company interests: If the training program involves technology, production processes or trade secrets, employees may be required to comply with confidentiality obligations. Some training contracts include non-compete agreement that prevents employees from working for competitors within a certain period after leaving the company.
• Obligation to reimburse training costs if commitments are violated: Employees must reimburse training costs to employers if they fail to fulfill their agreed-upon work period after training. This requirement is specifically outlined in Article 62 of the 2019 Labor Code and must be executed based on the training contract’s terms.

We appreciate your interest in TNTP’s article “Overview of Training Relationships in Labor”. Please stay tuned for our next article on “Reimbursement of Training Costs for Employers” to understand the conditions and legitimate training expenses that can be reimbursed to employers.

For any questions, please reach out to TNTP directly for prompt assistance.

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