Detailed Regulations on Handling Entirely Nullified Labor Contracts (Draft)

Detailed Regulations on Handling of Completely Invalid Labor Contracts (Expected Draft)

This Decree stipulates that within 03 working days from the effective date of the decision declaring the labor contract completely invalid, the employer and the employee must enter into a new labor contract in accordance with the law.

Currently, according to Decree 44/2013/ND-CP, this time period depends on the reason for declaring the labor contract completely invalid, specifically:

1. Within 15 days from the date of receiving the decision declaring the labor contract completely invalid due to unauthorized personnel signing the labor contract, the state labor management agency where the enterprise is headquartered shall guide the parties to re-sign the labor contract.

2. A labor contract with completely illegal content shall be voided upon the decision declaring the labor contract completely invalid.

3. Within 03 working days from the date of receiving the decision declaring the labor contract completely invalid due to contract content regulating employee benefits lower than labor law, labor regulations, and collective labor agreements, the employer and the employee must enter into a new labor contract in accordance with labor law.

During the period from the declaration of the labor contract invalid to the re-signing of the new labor contract, the rights and benefits of the employee will be settled according to Clause 2, Article 10 of this Decree.

4. Within 03 working days from the date of receiving the decision declaring the labor contract completely invalid due to the contracted job being prohibited by law, the employer and the employee must enter into a new labor contract in accordance with labor law.

If a new labor contract cannot be agreed upon, the employer must pay the employee an amount agreed upon by both parties but at least one month's regional minimum wage per year of work announced by the Government of Vietnam at the time the labor contract is declared invalid.

5. Within 03 working days from the date of receiving the decision declaring the labor contract completely invalid due to content restricting or preventing the employee's rights to form, join, and operate a union, the employer and the employee must enter into a new labor contract in accordance with labor law.

According to this Draft, the rights, obligations, and benefits of both parties from the time the labor contract is declared completely invalid to the signing of a new labor contract are as follows:

- For labor contracts declared completely invalid due to the entire contract content violating the law, the rights, obligations, and benefits of both parties are settled according to Clause 1, Article 9 of this Decree.

- For labor contracts declared completely invalid due to unauthorized personnel signing, violation of contract signing principles, or prohibited jobs, the rights, obligations, and benefits of both parties are settled as agreed upon in the invalidated labor contract.

Additionally, the Draft also stipulates that if a new labor contract is not signed, the employer must:

- Resolve employee benefits as stipulated in Clause 2 of this Article;

- Pay the employee an amount agreed upon by both parties, at least one month's regional minimum wage per year of work announced by the Government of Vietnam, determined according to the location where the employee works for the employer at the time the labor contract is declared completely invalid. The duration of employment under the invalidated contract is determined according to Clause 3, Article 8 of this Decree;

- Pay severance allowance to the employee as stipulated in Article 8 of this Decree for the duration of employment under previous labor contracts not covered by severance or job loss allowance (if any).

Note: The time the employee starts working under the invalidated labor contract until a new contract is entered into is counted as employment time with the employer as the basis for implementing policies according to labor law.

It can be seen that the current regulations on handling completely invalid labor contracts have been mentioned in Decree 43/2014/ND-CP. This Draft inherits the contents of Decree 44 and adds more detailed and specific regulations to address this issue.

See also: Draft Decree detailing the implementation of several articles of the Labor Code on labor management, labor contracts, wages, labor discipline, and material responsibility effective from January 1, 2021.

Nguyen Trinh

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