Vietnam: 10 notable points on employment contracts

What are the regulations on employment contracts in Vietnam? - Tuyet Nhu (Tien Giang, Vietnam)

Vietnam: 10 notable points on employment contracts (Internet image)

1. What is employment contract?

Pursuant to Article 13 of the Labor Code 2019, the employment contract is 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.

- Before recruiting an employee, the employer shall enter into an employment contract with such employee.

2. Forms of employment contract in Vietnam

According to Article 14 of the Labor Code 2019, forms of a 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 Article 14 of the Labor Code 2019.

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.

- Both parties may conclude an oral contract with a term of less than 01 month, except for the cases specified in Clause 2 Article 18, Point a Clause 1 Article 145 and Clause 1 Article 162 of Article 14 of the Labor Code 2019.

3. Principles for conclusion of an employment contract in Vietnam

Principles for conclusion of an employment contract are specified in Article 15 of the Labor Code 2019 as follows:

- Voluntariness, equality, good faith, cooperation and honesty.

- Freedom to enter into an employment contract which is not contrary to the law, the collective bargaining agreement and social ethics.

4. Obligations to provide information before conclusion of an employment contract in Vietnam

Article 16 of the Labor Code 2019 stipulates the obligations to provide information before conclusion of an employment contract in Vietnam as follows:

- The employer shall provide the employee with truthful information about the job, workplace, working conditions, working hours, rest periods, occupational safety and health, wage, forms of wage payment, social insurance, health insurance, unemployment insurance, regulations on business secret, technological know-how, and other issues directly related to the conclusion of the employment contract if requested by the employee.

- The employee shall provide the employer with truthful information about his/her full name, date of birth, gender, residence, educational level, occupational skills and qualifications, health conditions and other issues directly related to the conclusion of the employment contract which are requested by the employer.

5. Competence to conclude employment contracts in Vietnam

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

- Employees may directly conclude their employment contracts, except for the cases specified in Clause 2 of this Article.

- 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 employment contract concluded by the said representative must be enclosed with a list clearly stating the full names, ages, genders, residences and signatures of all employees concerned.

- 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 lawfully authorized by the group of employees to conclude the employment contract.

- The person who is authorized to conclude the employment contract must not authorize another person to conclude the employment contract.

6. Entering into multiple employment contracts in Vietnam

Article 19 of the Labor Code 2019 provides for entering into multiple employment contracts as follows:

- An employee may enter into employment contracts with more than one employer, provided that he/she fully performs all terms and conditions contained in the concluded contracts.

- Where an employee enters into employment contracts with more than one employer, his/her participation in social insurance, health insurance and unemployment insurance schemes shall comply with regulations of law on social insurance, health insurance, unemployment insurance, occupational safety and health.

7. Types of employment contracts in Vietnam

Pursuant to Article 20 of the Labor Code 2019, 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.

8. Contents of employment contracts

Article 21 of the Labor Code 2019 provides for the content of a employment contract as follows:

- An employment contract shall have the following major contents:

+ The employer’s name, address; full name and position of the person who concludes the contract on the employer’s side;

+ Full name, date of birth, gender, residence, identity card number or passport number of the person who concludes the contract on the employee’s side;

+ The job and workplace;

+ Duration of the employment contract;

+ Job- or position-based salary, form of salary payment, due date for payment of salary, allowances and other additional payments;

+ Regimes for promotion and pay rise;

+ Working hours, rest periods;

+ Personal protective equipment for the employee;

+ Social insurance, health insurance and unemployment insurance;

+ Basic training and advanced training, occupational skill development.

- If the employees’ job is directly related to the business secret, technological know-how as prescribed by law, the employer has the rights to sign a written agreement with the employee on the content and duration of the protection of the business secret, technology know-how, and on the benefit and the compensation obligation in case of violation by the employee.

- If the employee works in agriculture, forestry, fishery, or salt production, both parties may exclude some of the aforementioned contents and negotiate additional agreements on settlement in the case when the contract execution is affected by natural disaster, fire or weather.

9. Annexes to employment contract

Pursuant to Article 22 of the Labor Code 2019, annexes to employment contract are as follows:

- An annex to an employment contract is an integral part of the employment contract and is as binding as the employment contract.

- An annex to an employment contract may elaborate or amend certain contents of the employment contract and must not change the duration of the employment contract.

Where an annex to an employment contract elaborates the employment contract in a manner that leads to a different interpretation of the employment contract, the contents of the employment contract shall prevail.

Where an annex amends certain contents of the employment contract, it should clearly states the amendments or additions, and the date on which they take effect.

10. Effect of employment contract in Vietnam

Pursuant to Article 23 of the Labor Code 2019, the effect of employment contract is as follows:

An employment contract takes effect as of the date on which the contract is concluded by the parties, unless otherwise agreed by both parties or prescribed by law.

Ngoc Nhi

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