Currently, many employees sign fixed-term labor contracts, but when the contract expires, the company does not renew the contract. So, how will the case of employees continuing to work when the labor contract has expired be resolved under the Labor Code 2019?
Article table of contents
Employees continue working when labor contracts expire: How to handle? (illustration)
What is a labor contract?
According to labor law, a labor contract is an agreement between an employee and an employer regarding a paid job, salary, working conditions, and rights and obligations of each party in the labor relationship.
In cases where the parties agree under a different name but the content reflects a paid job and one party's management, operation, and supervision, it is considered a labor contract.
Labor Code 2019 (Labor Code) requires employers to enter into labor contracts with employees when they are hired.
Types of Contracts
The new Labor Code has eliminated the seasonal labor contract form and only provides for two (2) types of contracts:
- An indefinite-term labor contract is one in which the two parties do not determine the term, time, or termination of the contract's validity;- A definite-term labor contract is one in which the two parties determine the term, time, or termination of the contract's validity within a period not exceeding 36 months from the date the contract takes effect.
What rights do employees have when they continue working despite the contract's expiration?
There are many cases when the labor contract expires but the employer does not sign a new labor contract with the employee while letting the employee continue to perform their current job. Therefore, the law sets a specific period for the parties to negotiate a new contract, which is 30 days from the date the labor contract expires. Within this period, the parties must sign a new labor contract, and during the time the new contract has not been signed, the rights, obligations, and interests of both parties shall be performed according to the concluded contract. Within this time, the parties will negotiate whether to continue signing a new contract or terminate the contract.
- In cases where the parties sign a new labor contract defined as a definite-term contract, they can only sign it one more time. After that, if the employee continues to work, they must sign an indefinite-term labor contract. Note, this regulation does not apply to labor contracts with those hired as directors in state-owned enterprises and in cases specified in Clause 1, Article 149, Clause 2, Article 151, and Clause 4, Article 177 of the Labor Code 2019.- In cases where 30 days have elapsed since the labor contract expired and the parties have not signed a new labor contract, the definite-term labor contract becomes an indefinite-term labor contract.
The law protects employees as they are the weaker party with limited legal knowledge compared to employers. Therefore, when they continue working without being given a new contract, they are still protected by the law and enjoy benefits as if the contract were still in effect.
Legal basis:Labor Code 2019 effective from January 1, 2021.
Long Binh
