Is it mandatory for directors to conclude employment contracts in Vietnam? At least how many months must employment contracts be concluded in Vietnam?

Is it mandatory for directors to conclude employment contracts in Vietnam?

Question: According to regulations, who has right to represent the company in signing employment contracts with employees? Is it mandatory to be a company director? Hope to receive a response soon.

Reply:

In Clause 3, Article 18 of the 2019 Labor Code, there are regulations on competence to conclude employment contracts as follows:

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.

=> Thus, according to the above regulations in Vietnam, the person signing the employment contract on the employer's side is not required to be the company director.

Is it mandatory for directors to conclude employment contracts in Vietnam? At least how many months must employment contracts be concluded in Vietnam? (Image from the Internet)

At least how many months must employment contracts be concluded in Vietnam?

Question: According to current law, how many months is the minimum term of a fixed-term contract signed? Hope to receive a response from your consultants soon.

Reply:

In Clause 1, Article 20 of the 2019 Labor Code, there are regulations on types of employment contracts as follows:

1. An employment contract shall be concluded in one of the following types:

a) An indefinite-term employment contract is a contract in which the two parties neither fix the term nor the time of termination of the contract;

b) A fixed-term employment contract is a contract in which the two parties fix the term of the contract for a duration of up to 36 months from the date of its conclusion.

Thus, according to the above regulations in Vietnam, the law stipulates that the maximum term of an indefinite-term contract is 36 months without stipulating the minimum term of an employment contract.

After expiration of a fixed-term contract, if I do not sign a new employment contract, will the old employment contract automatically renew in Vietnam?

I joined the company with a one-year employment contract that expired on September 30. I'm still working today, but I haven't seen the company talk about signing a new contract. Yesterday I asked the human resources department and they said it was a good deal. My contract automatically renews for another year, no need to sign a new contract, is that correct?

Reply:

Article 20 of the 2019 Labor Code regulates types of employment contracts:

1. An employment contract shall be concluded in one of the following types:

a) An indefinite-term employment contract is a contract in which the two parties neither fix the term nor the time of termination of the contract;

b) A fixed-term employment contract is a contract in which the two parties fix the term of the contract for a duration of up to 36 months from the date of its conclusion.

2. If an employee keeps working when an employment contract mentioned in Point b Clause 1 of this Article expires:

a) Within 30 days from the expiration date of the employment contract, both parties shall conclude a new employment contract. Before such a new employment contract is concluded, the parties’ rights, obligations and interests specified in the old employment contract shall remain effective;

b) If a new employment contract is not concluded after the 30-day period, the existing employment contract mentioned in Point b Clause 1 of this Article shall become an employment contract of indefinite term;

c) The parties may enter into 01 more fixed-term employment contract. If the employee keeps working upon expiration of this second fixed-term employment contract, the third employment contract shall be of indefinite term, except for employment contracts with directors of state-invested enterprises and the cases specified in Clause 1 Article 149, Clause 2 Article 151 and Clause 4 Article 177 of this Labor Code.

Thus, according to regulations in Vietnam, if at the end of 30 days from the date of expiration of the employment contract, the two parties do not sign a new employment contract, the signed contract becomes an indefinite-term employment contract. 

Therefore, your company's human resources department said that the contract will automatically extend for another year and there is no need to re-sign a new contract, which is against the regulations in Vietnam.

If the company wants to sign a contract with you for another year, it must re-sign a new contract. If the deadline is not exceeded, the contract will be converted into an indefinite-term employment contract in Vietnam.

Best regards!