In the Draft Report Summarizing and Evaluating 03 Years of Implementation of the Labor Code dated October 3, 2016, the Ministry of Labor - Invalids and Social Affairs of Vietnam pointed out some strengths and limitations in the process of implementing labor laws, and at the same time made several proposals to contribute to a more comprehensive labor policy for employees. Among these, several provisions related to employment contracts were notable.
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Employment contracts play an important role, serving as the basis and evidence that establish the labor relationship between the employee and the employer. Through employment contracts, parties in the labor relationship are aware of their rights, obligations, and responsibilities; adhering to the labor contract signifies respect for the law, whereas violating contract provisions equates to breaking the law.
According to the Draft Summary Report, the conclusion of employment contracts ensures benefits for employees, serves as a foundation for resolving individual labor disputes, and is an effective legal tool for the State to manage and regulate labor relations. However, many employees still do not fully understand the significance and necessity of concluding employment contracts, leading them not to exercise their rights to negotiate with the employer on the contents of the employment contracts. Conversely, some employers exploit the employees' lack of knowledge by entering into civil contracts instead of employment contracts to avoid paying Social Insurance and Unemployment Insurance for the employees.
When concluding an employment contracts, employees must provide certain information and necessary documents to the enterprise to ensure the contract is executed properly. However, there have been instances where employees deceive businesses by submitting counterfeit diplomas and certificates. Labor laws currently do not have sanctions to deal with such cases.
Regarding probationary contracts, the Labor Code stipulates agreements on trial work, the rights and obligations of the parties during the probation period; only one probationary period is allowed for a specific job; and the probationary salary has been increased from 70% to 85% of the job's salary. In practice, some companies and enterprises provide ambiguous reasons to extend the probation period for employees, and probationary salaries are not assured as per the agreed terms and legal regulations.
Despite achieving many advantages, the Labor Code still faces several limitations and shortcomings. Therefore, in the Draft Summary Report, the Ministry of Labor - Invalids and Social Affairs has made several proposals as follows:
- Supplement regulations prohibiting the signing of other types of contracts in place of employment contracts when a labor relationship arises.
- Stipulate that employment contracts with a term of one month or more must be concluded in writing because the Social Insurance Law mandates that employees working under employment contracts of one month or more are subject to social insurance starting from January 01, 2018. If work with a term of less than three months can be agreed upon verbally, it will pose difficulties in implementing this provision of the Social Insurance Law.
- Add a provision: "Employees must provide truthful and accurate information to employers...” to prevent situations where employees deceive businesses by presenting fake diplomas and certificates.
- Before concluding a labor contract, the employer can agree with the probationer on trial work, and both parties must sign a probationary contract; specifically outlining the content of the probationary contract. The current regulations are unclear about whether probation is part of an employment contracts and whether the parties must conclude a probationary contract when agreeing on trial work.
- Additionally, there should be specific regulations in cases where the probation period ends, and the employer does not sign an employment contracts with the employee, yet the employee continues to work, that the contract shall be considered a definite-term contract according to the law. Or the employer must inform the employee of the probation results before the probation period ends.
View detailed Draft Summary Report HERE.
