Are employers entitled to invalidate employment contracts in Vietnam?

Are employers entitled to invalidate employment contracts in Vietnam?

Pursuant to Article 50 of the Labor Code 2019, competence to invalidate employment contracts is as follows:

People’s Courts shall be entitled to invalidate employment contracts.

In addition, Article 39 of the Labor Code 2019 also provides for illegal unilateral termination of employment contracts as follows:

The unilateral termination of an employment contract will be illegal if it does not comply with regulations of Article 35, 36 and 37 of this Labor Code.

According to Article 36 of the Labor Code 2019 also stipulates the right of an employer to unilaterally terminates the employment contract as follows:

1. An employer shall have the right to unilaterally terminate an employment contract in one of the following circumstances:

a) The employee repeatedly fails to perform his/her work according to the criteria for assessment of employees’ fulfillment of duties established by the employer. The criteria for assessment of employees’ fulfillment of duties shall be established by the employer with consideration taken of opinions offered by the representative organization of employees (if any);

b) The employee is sick or has an accident and remains unable to work after having received treatment for a period of 12 consecutive months in the case of an indefinite-term employment contract, for 06 consecutive months in the case of an employment contract with a fixed term of 12 – 36 months, or more than half the duration of the contract in case of an employment contract with a fixed term of less than 12 months.

Upon recovery, the employer may consider concluding another employment contract with the employee;

c) In the event of a natural disaster, fire, major epidemic, hostility, relocation or downsizing requested by a competent authority, the employer has to lay off employees after all possibilities have been exhausted;

d) The employee is not present at the workplace after the time limit specified in Article 31 of this Labor Code;

dd) The employee reaches the retirement age specified in Article 169 of this Labor Code, unless otherwise agreed by the parties;

e) The employee is not present at work without acceptable excuses for at least 05 consecutive working days;

g) The employee fails to provide truthful information during the conclusion of the employment contract in accordance with Clause 2 Article 16 of this Labor Code in a manner that affects the recruitment.

Thus, according to the law in Vietnam, the labor contract is declared invalid by the People's Court, so the employer can only terminate the labor contract by himself. In this case, if the employer declares the contract invalid, it will have no value.

In what cases can employment contracts be declared invalid by the Court in Vietnam?

Pursuant to Article 49 of the Labor Code 2019 stipulating invalid employment contracts:

1. An employment contract shall be completely invalid in the following cases:

a) The entire contents of the employment contract are illegal;

b) A person concludes the employment contract ultra vires or against the rules for employment contract conclusion specified in Clause 1 Article 15 of this Labor Code;

c) The work described in the employment contract is prohibited by law;

2. An employment contract shall be partially invalid when part of its contents is illegal but does not affect its remaining contents.

Best Regards!