Vietnam: Settlement of partially invalidated employment contracts in accordance with Decree No. 145/2020/NĐ-CP

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 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 the effective collective bargaining agreement or, if such a collective bargaining agreement is not available, in accordance with law.

In case the salary under the invalidated employment contract is lower than the minimum salary prescribed by labor laws or the effective collective bargaining agreement, both parties shall negotiate the salary to ensure conformity with regulations. The employer shall pay the difference between the initial salary and the re-negotiated salary for the actual work period under the invalidated employment contract.

3. In case both parties cannot reach a consensus on revision of the invalidated content:

- 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;

- Severance allowance shall be provided in accordance with Article 8 of this Decree.

- The work period under the invalidated employment contract shall be included in the actual work period as the basis for provision of benefits as prescribed by law.

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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