Vietnam: Distinguishing employment contract and collaborator contract

Hello Ms. Minh Anh, for your question, LAWNET would like to answer as follows:

1. Legal nature of employment contract and collaborator contract

- According to Clause 1 Article 13 of the Labor Code 2019 of Vietnam, an employment contract is an agreement between an employee and an employer on a paid job, salary, working conditions, and the rights and obligations of each party in the labor relations.

A document with a different name is also considered an employment contract if it contains the agreement on the paid job, salary, management and supervision of a party.

- According to Article 513 of the Civil Code 2015 of Vietnam, collaborator contract means an agreement between parties whereby a service provider performs an act for a client which pays a fee for that act.

If the collaborator contract meets the following conditions, it will be considered as an employment contract:

+ Contains the agreement on the paid job, salary.

+ Contains the agreement on the management and supervision of a party.

If the collaborator contract is determined as an employment contract, the employer and employee must comply with the provisions of the Labor Code of Vietnam (such as paying social insurance, health insurance, unemployment insurance etc.). This is the fundamental difference between an employment contract and a service contract.

Thus, depending on each case, a collaborator contract can be considered an employment contract or a service contract.

2. Forms of employment contract and collaborator contract

- Forms of employment contract: according to Article 14 of the Labor Code 2019 of Vietnam, an employment contract shall be concluded in writing and made into two copies, one of which will be kept by the employee, the other by the employer, except otherwise specified by law. An employment contract in the form of electronic data conformable with electronic transaction laws shall have the same value as that of a physical contract. Both parties may conclude an oral contract with a term of less than 01 month.

- Forms of collaborator contract considered service contract: current regulations of Vietnam do not stipulate mandatory forms of a collaborator contract, thus, it shall be applied similarly to an ordinary civil contract. Therefore, a collaborator contract may be entered into orally or in writing or a specific act.

3. Major contents of employment contract and collaborator contract

- According to Clause 1 Article 21 of the Labor Code 2019 of Vietnam, an employment contract shall have the following major contents:

+ The employer’s name, address; full name and position of the person who concludes the contract on the employer’s side;

+ Full name, date of birth, gender, residence, identity card number or passport number of the person who concludes the contract on the employee’s side;

+ The job and workplace;

+ Duration of the employment contract;

+ Job- or position-based salary, form of salary payment, due date for payment of salary, allowances and other additional payments;

+ Regimes for promotion and pay rise;

+ Working hours, rest periods;

+ Personal protective equipment for the employee;

+ Social insurance, health insurance and unemployment insurance;

+ Basic training and advanced training, occupational skill development.

- For the collaborator contract, in the case of a service contract, it is not required to ensure any specific content. Therefore, the parties have the right to freely agree on the content of the contract but must ensure that it is not contrary to the provisions of law.

4. Term of employment contract and collaborator contract

- Regarding employment contract: Depending on each case, the term of performance of the employment contract may be different, but it will normally be determined on the following grounds:

+ A fixed-term employment contract: from full 12 months to 36 months;

+ An indefinite-term employment contract: two parties neither fix the term nor the time of termination of the contract;

- Regarding collaborator contract: depending on the nature of the work, the term of the collaborator's contract will be determined according to the agreement.

5. Unilaterally terminate the employment contract and collaborator contract

- Regarding employment contract: Both employees and employers who enter an employment relationship in an employment contract have the right to unilaterally terminate the contract. However, it is necessary to fully satisfy the conditions specified in Article 35 and Article 36 of the Labor Code 2019 of Vietnam.

- Regarding collaborator contract:

+ In case the collaborator contract is a service contract: When the performance of the work recorded in the contract is not beneficial to one of the parties to the contract, it has the right to unilaterally terminate the contract. However, when terminating, it must ensure the correct contents signed in the contract.

+ In case a collaborator contract is an employment contract: The employee who is a collaborator and the employer who establishes an employment relationship in the contract have the right to unilaterally terminate the contract. However, it is necessary to fully satisfy the conditions specified in Article 35 and Article 36 of the Labor Code 2019 of Vietnam.

Regards!

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Key word: employment contract | collaborator contract | contract | labor contract | Labor Code 2019 of Vietnam | Civil Code 2015 of Vietnam | service contract |

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