Employment contracts in Vietnam: 12 12 outstanding new points to know from 2021

Below is a summary of 12 new points that employees should know about employment contracts applied from January 01, 2021 in Vietnam in order to protect their legitimate interests.

Chỉ còn 02 loại hợp đồng lao động từ ngày 01/01/2021

1. 03 conditions to enter a labor relation

Specifically, according to Clause 1 Article 13 of the Labor Code 2019 of Vietnam, an employment contract is prescribed as follows:

- An employment contract is an agreement between an employee and an employer on a paid job, salary, working conditions, and the rights and obligations of each party in the labor relations.

- A document with a different name is also considered an employment contract if it contains the agreement on the paid job, salary, management and supervision of a party.

Thus, 03 conditions include: the employment on an agreement basis; paid salary; under the management, administration and supervision of one party shall be considered as an employment contract.

2. Recognizing new form of employment contract

Specifically, according to Clause 1 Article 14 of the Labor Code 2019 of Vietnam, forms of employment contract are as follows: An employment contract shall be concluded in writing and made into two copies, one of which will be kept by the employee, the other by the employer, except for the case specified in Clause 2 of this Article. An employment contract in the form of electronic data conformable with electronic transaction laws shall have the same value as that of a physical contract.

Thus, the Labor Code 2019 of Vietnam accepts employment contracts entered into via electronic means.

Moreover, according to Clause 2 Article 14 of the Labor Code 2019 of Vietnam, both parties may conclude an oral contract with a term of less than 01 month in some specific cases.

3. Supplementing prohibited acts by employers during conclusion and performance of employment contracts

Specifically, according to Clause 3 Article 17 of the Labor Code 2019 of Vietnam, forcing the employee to keep performing the employment contract to pay debt to the employer has been additionally recognized as a prohibited act by employers during conclusion and performance of employment contracts.

Thus, this is a regulation to protect employees from being exploited by the employer.

4. Competence to conclude employment contracts

Specifically, according to Article 18 of the Labor Code 2019 of Vietnam, competence to conclude employment contracts is as follows:

- Employees may directly conclude their employment contracts. In respect of seasonal works or certain jobs which have a duration of less than 12 months, a group of employees aged 18 or older may authorized the representative of the group to conclude the employment contract, in which case such employment contract shall be effective as if it was separately concluded by each of the employees.

- The person who concludes the employment contract on the employer’s side shall be:

+ The legal representative of the enterprise or an authorized person as prescribed by law;

+ The head of the organization that is a juridical person, or an authorized person as prescribed by law;

+ The representative of the household, artels or an organization that is not a juridical person, or an authorized person as prescribed by law;

+ The individual who directly hires the employee.

- The person who concludes the employment contract on the employee’s side shall be:

+ The employee himself/herself if he/she is 18 or older;

+ The employee aged 15 to under 18 with a written consensus by his/her legal representative;

+ The employee aged under 15 and his/her legal representative;

+ The employee is lawfully authorized by the group of employees to conclude the employment contract.

Moreover, according to Clause 5 of this Article, the person who is authorized to conclude the employment contract must not authorize another person to conclude the employment contract.

5. Types of employment contracts

Specifically, according to Clause 1 Article 20 of the Labor Code 2019 of Vietnam, an employment contract shall be concluded in one of the following types:

- 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;

- 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, from January 01, 2021, seasonal or work-specific labor contracts shall no longer be recognized as currently prescribed.

6. Probation is not allowed in case of an employment contract with a duration of less than 01 month

Specifically, according to Clause 3 Article 24 of the Labor Code 2019 of Vietnam, probation is not allowed if the employee works under an employment contract with a duration of less than 01 month.

This is a legacy regulation when the current regulations do not apply probation to seasonal labor contracts.

7. Supplementing regulation on probationary period

Specifically, according to Clause 1 Article 25 of the Labor Code 2019 of Vietnam, the probationary period shall be negotiated by the parties on the basis of the nature and complexity of the job. Only one probationary period is allowed for a job and the probation shall not exceed 180 days for the position of enterprise executive as prescribed by the Law on Enterprises, the Law on management and use of state investment in enterprises.

Thus, the Labor Code 2019 of Vietnam has stipulated that the probation shall be up to 180 days for the position of enterprise executive.

8. Supplementing provision on reassignment of an employee against the employment contract

Specifically, according to Clause 4 Article 29 of the Labor Code 2019 of Vietnam, in case the employee refuses to be reassigned for more than 60 working days in 01 year and has to suspend the employment, he/she shall receive the suspension pay from the employer in accordance with this Labor Code.

Thus, this provision helps to protect the interests of employees more in case they are forced to change jobs other than the signed labor contracts.

9. Supplementing cases of suspension of an employment contract

Specifically, according to Clause 1 Article 30 of the Labor Code 2019 of Vietnam, cases of suspension of an employment contract include:

- The employee is conscripted into the army or militia;

- The employee is held in custody or detention in accordance with the criminal procedure law;

- The employee is sent to a reformatory school, drug rehabilitation center or correctional facility;

- The female employee is pregnant as specified in Article 138 of this Code;

- The employee is designated as the executive of a wholly state-owned single-member limited liability company;

- The employee is authorized to representative the state investment in another enterprise;

- The employee is authorized to represent the enterprise’s investment in another enterprise;

- Other circumstances as agreed by both parties.

Moreover, according to Clause 2 of this Article, during the suspension of the employment contract, the employee shall not receive the salary and benefits specified in the employment contract, unless otherwise agreed by both parties or prescribed by law.

10. The right of an employee to unilaterally terminates the employment contract

Specifically, according to Clause 1 Article 35 of the Labor Code 2019 of Vietnam, an employee shall have the right to unilaterally terminate the employment contract, provided he/she notices the employer in advance:

a) at least 45 days in case of an indefinite-term employment contract;

b) at least 30 days in case of an employment contract with a fixed term of 12 – 36 months;

c) at least 03 working days in case of an employment contract with a fixed term of under 12 months;

d) The notice period in certain fields and jobs shall be specified by the government.

Thus, employees only need to ensure the notice period to the employer without stating reason as prescribed in the current Labor Code.

11. The right of the employee to unilaterally terminate the employment contract without prior notice

Specifically, according to Clause 2 Article 35 of the Labor Code 2019 of Vietnam, an employee is shall have the right to unilaterally terminate the employment contract without prior notice if he/she:

- is not assigned to the work or workplace or not provided with the working conditions as agreed in the employment contract, except for the cases specified in Article 29 of this Labor Code;

- is not paid adequately or on schedule, except for the case specified in Clause 4 Article 97 of this Code.

- is maltreated, assaulted, physically or verbally insulted by the employer in a manner that affects the employee’s health, dignity or honor; is forced to work against his/her will;

- is sexually harassed in the workplace;

- is pregnant and has to stop working in accordance with Clause 1 Article 138 of this Labor Code.

- reaches the retirement age specified in Article 169 of this Labor Code, unless otherwise agreed by the parties; or

- finds that the employer fails to provide truthful information in accordance with Clause 1 Article 16 of this Labor Code in a manner that affects the performance of the employment contract.

Thus, the Labor Code 2019 of Vietnam has specified all cases that the employee is allowed to unilaterally terminate the employment contract without prior notice.

12. Supplementing cases that the employer has the right to unilaterally terminate an employment contract

Specifically, in addition to cases inherited from the Labor Code 2012, there are 02 more cases specified in Points d and e Clause 1 Article 36 of the Labor Code 2019 of Vietnam that the employer has the right to unilaterally terminate an employment contract:

- The employee is not present at the workplace after 5 days from the expiration of the period of suspension of the performance of the employment contract;

- The employee is not present at work without acceptable excuses for at least 05 consecutive working days.

Thus, this is a provision to protect the employer in case the employee is no longer willing to continue to perform the signed employment contract.

13. Amending provisions on settlement time and responsibilities of both parties upon termination of an employment contract

Specifically, according to Clause 1 Article 48 of the Labor Code 2019 of Vietnam, within 14 working days following the termination of an employment contract, both parties shall settle all payments in respect of the rights and interests of each party. In the following cases, such period may be extended, but shall not exceed 30 days:

- Shutdown of business operation of the employer that is not a natural person;

- Changes in the organizational structure, technology or changes due to economic reasons;

- Full division, partial division, consolidation, merger of the enterprise; sale, lease, conversion of the enterprise; transfer of the right to ownership or right to enjoyment of assets of the enterprise or cooperative;

- Natural disasters, fire, hostility or major epidemics.

Thus, the settlement time is extended by 7 days compared to the current regulations, which is a reasonable change to facilitate the two parties to perform their obligations to complete the termination of the employment contract.

Le Vy

 

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