Vietnam: Who has the right to conclude employment contracts? Can a director conclude an employment contract with herself/himself?
Who has the right to conclude employment contracts in Vietnam?
According to Article 18 of the Labor Code 2019 on competence to conclude employment contracts in Vietnam as follows:
Competence to conclude employment contracts
1. Employees may directly conclude their employment contracts, except for the cases specified in Clause 2 of this Article.
2. In respect of seasonal works or certain jobs which have a duration of less than 12 months, a group of employees aged 18 or older may authorized the representative of the group to conclude the employment contract, in which case such employment contract shall be effective as if it was separately concluded by each of the employees.
The employment contract concluded by the said representative must be enclosed with a list clearly stating the full names, ages, genders, residences and signatures of all employees concerned.
3. The person who concludes the employment contract on the employer’s side shall be:
a) The legal representative of the enterprise or an authorized person as prescribed by law;
b) The head of the organization that is a juridical person, or an authorized person as prescribed by law;
c) The representative of the household, artels or an organization that is not a juridical person, or an authorized person as prescribed by law;
d) The individual who directly hires the employee.
4. The person who concludes the employment contract on the employee’s side shall be:
a) The employee himself/herself if he/she is 18 or older;
b) The employee aged 15 to under 18 with a written consensus by his/her legal representative;
c) The employee aged under 15 and his/her legal representative;
d) The employee lawfully authorized by the group of employees to conclude the employment contract.
5. The person who is authorized to conclude the employment contract must not authorize another person to conclude the employment contract.
Based on the above provisions, employers in Vietnam has the competence to conclude employment contracts, including the legal representative, the direct employer, and the person authorized to conclude an employment contract. The employee can either himself/herself or authorize the employee in the same group to conclude an employment contract.
Can a director in Vietnam conclude an employment contract with herself/himself?
Pursuant to Clause 3, Article 141 of the Civil Code 2015 on the scope of representation as follows:
Scope of Representation
1. Each representative may only enter into and/or perform civil transactions within his/her scope of representation according to any of the following bases:
a) The decision of the competent authority;
b) The charter of the juridical person;
c) Contents of authorization;
d) Other regulations as prescribed by law.
2. If it fails to determine the specific scope authorization prescribed in Clause 1 of this Article, the legal representative has the right to enter into and perform all civil transactions in the interests of the principal, unless otherwise prescribed by law.
3. A natural or juridical person may represent multiple natural or juridical persons but he/she/it may not, on behalf of the principal, enter into and perform a civil transaction with him/her/it or with a third party that he/she/it also acts as a representative therefor, unless otherwise prescribed by law.
4. The representative must inform the parties of the scope of his/her representation.
Thus, according to the above provisions, a person cannot be the representative of 2 entities in the same employment contract. Therefore, the director cannot conclude an employment contract with herself/himself.
Is it possible to authorize the deputy director to conclude an employment contract with the director in Vietnam?
According to the provisions of Clause 3, Article 18 of the Labor Code 2019, an authorized person at law can represent the employer to conclude an employment contract.
Competence to conclude employment contracts
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3. The person who concludes the employment contract on the employer’s side shall be:
a) The legal representative of the enterprise or an authorized person as prescribed by law;
b) The head of the organization that is a juridical person, or an authorized person as prescribed by law;
c) The representative of the household, artels or an organization that is not a juridical person, or an authorized person as prescribed by law;
d) The individual who directly hires the employee.
At the same time, in Clause 3, Article 141 of the Civil Code 2015, a natural or juridical person may represent multiple natural or juridical persons but he/she/it may not, on behalf of the principal, enter into and perform a civil transaction with him /her/it or with a third party that he/she/it also acts as a representative therefor, unless otherwise prescribed by law.
From the above grounds, in order to conclude an employment contract with the director in this case, it is necessary to authorize the deputy director in accordance with the law.
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