Conversion of an indefinite-term labor contract into a definite-term labor contract in Vietnam
Our company signed an indefinite-term labor contract with an employee in April 2019. But in 2020, the company wants to re-sign a 1-year labor contract with this employee, is it possible? Is that a violation of the law? Please get back to me. Thank you.
Pursuant to Article 22 of the 2012 Labor Code regulating types of labor contract:
1. A labor contract must be entered into in one of the following types:
a/ Indefinite-term labor contract;
An indefinite-term labor contract is a contract in which the two parties do not determine the duration and the time of termination of the contract.
b/ Definite-term labor contract;
A definite-term labor contract is a contract in which the two parties determine the duration and the time of termination of the contract within a period of between 12 months and 36 months.
c/ A seasonal or work-specific labor contract that has a duration of under 12 months.
2. When a labor contract stipulated at Points b and c, Clause 1 of this Article expires and the employee continues working, within thirty (30) days from the date of expiration of the contract, the two parties shall sign a new labor contract; if no new labor contract is entered into, the contract entered into under Point b, Clause 1 of this Article will become an indefinite-term labor contract and the contract entered into under Point c, Clause 1 of this Article will become a definite-term labor contract with a duration of 24 months.
In case the two parties enter into a new labor contract with a definite term, only 1 additional definite-term labor contract may be signed; after that, if the employee continues working, an indefinite-term contract must be entered into.
3. It is prohibited to enter into a seasonal or work-specific labor contract of under 12 months for a regular job which has a duration of more than 12 months, except the case of temporary replacement of an employee who has taken leave for military duty, pregnancy and maternity, sickness, labor accident or other temporary leaves.
Thus, the law only has provisions for converting from a fixed-term labor contract to an indefinite-term labor contract. Therefore, if your company wants to sign a new fixed-term labor contract, it must terminate the signed indefinite-term labor contract. In this case, you can agree with the employee to terminate the signed labor contract. However, it should be noted that a fixed-term labor contract can only be signed a maximum of two times.
Best regards!
