Vietnam: Settlement of employment contracts that are invalidated because of involvement of works banned by law

According to Article 9 of the Decree No. 145/2020/NĐ-CP of Vietnam’s Government, a partially invalidated employment contract prescribed in Clause 1 Article 51 of the Labor Code of Vietnam shall be settled as follows:

1. When part of the employment contract is invalidated, the employer and the employee shall revise the invalidated content to ensure its conformity with the collective bargaining agreement and the law.

2. Rights, obligations and interests of both parties during the period from the first day on which the employee works under the partially invalidated employment contract to the day on which the contract is revised shall be settled in accordance with provisions of Clause 2 Article 10 of the Decree No. 145/2020/NĐ-CP.

3. In case the fully invalidated employment contract is not re-concluded:

- The employment contract will be terminated;

- Rights, obligations and interests of both parties during the period from first day on which the employee works under the partially invalidated employment contract to the day on which the contract is terminated shall be settled in accordance with provisions in section 2;

- The employer shall pay the employee an amount of money that is equal to at least a monthly region-based minimum wage for each year of work. The period of work under the invalidated employment contract as the basis for calculation of this amount shall be determined in accordance with Point a Clause 3 Article 8 of this Decree;

- Provide severance allowance for employment contracts concluded before the invalidated employment contract in accordance with Article 8 of this Decree, if any.

4. Other issues relevant to partially invalidated employment contracts shall be settled by court in accordance with the Civil Procedure Code of Vietnam.

View more details at the Decree No. 145/2020/NĐ-CP of Vietnam’s Government, effective from February 01, 2021.

Thuy Tram

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