There are certain changes to the regulations of labor contracts in 2021 in accordance with the Labor Code 2019. Thus, employees need to pay attention to the terms of the agreement of the two parties when concluding the employment contract to avoid losses.
Article table of contents
1. Definition of employment contract in accordance with new regulation
Pursuant to Article 13 of the Labor Code 2019 of Vietnam, employment contract is stipulated as following:
1. 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.
2. Before recruiting an employee, the employer shall enter into an employment contract with such employee.
According to the Labor Code 2012 of Vietnam, a labor contract is an agreement between an employee and an employer on a paid job, working conditions and the rights and obligations of each party in industrial relations.
According to the new regulation, from 2021, other types of contract with different name, such as Contributor contract, is also determined as employment contract if it contains:
- The agreement on the paid job, salary; and
- Management and supervision of a party.
Thus, the definition of employment contract under new regulation from January 01, 2021 will be expanded compared to the previous one.
2. Term of types of employment contracts
According to the Labor Code 2019 of Vietnam, an employment contract shall be concluded in one of the following 02 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.
In comparison with the Labor Code 2012, the Labor Code 2019 of Vietnam has abolished the provision on seasonal or work-specific labor contract that has a duration of under 12 months. Employees when choosing the type of contract to enter into should pay attention to this new point.
3. Choosing forms of employment contract
The Labor Code 2019 of Vietnam remains the provision that employment contract with a term of less than 01 month shall be concluded in writing or in oral. Concurrently, according to the new regulation, employment contract shall be concluded in the form of electronic data conformable with electronic transaction laws, which shall have the same value as that of a physical contract.
Thus, currently, employees can choose to conclude employment contracts in the form of writing, electronic data or in oral form.
4. Forcing the employee to keep performing the employment contract to pay debt is prohibited
The Labor Code 2019 of Vietnam has supplemented a prohibited act by employers during conclusion and performance of employment contracts, which is forcing the employee to keep performing the employment contract to pay debt to the employer.
Thus, during conclusion and performance of employment contracts, employers are prohibited to perform the 03 following acts:
- Keeping the employee’s original identity documents, diplomas and certificates.
- Requesting the employee to make a deposit in cash or property as security for his/her performance of the employment contract.
- Forcing the employee to keep performing the employment contract to pay debt to the employer.
5. Agreement on the contents of the probation in the employment contract
According to the Labor Code 2019 of Vietnam, probation is prescribed as following:
1. An employer and an employee may include the contents of the probation in the employment contract or enter into a separate probation contract.
2. The probation contract must include the probation period and the contents specified in Points a, b, c, dd, g and h Clause 1 Article 21 of this Code.
3. Probation is not allowed if the employee works under an employment contract with a duration of less than 01 month.
According to this provision, an employer and an employee may include the contents of the probation in the employment contract. However, it is noted that probation is not allowed if the employee works under an employment contract with a duration of less than 01 month.
The Labor Code 2019 of Vietnam has supplemented that the probation shall not exceed 180 days for the position of enterprise executive. For other jobs, the probation shall not exceed:
- 60 days for positions that require a junior college degree or above;
- 30 days for positions that require a secondary vocational certificate, professional secondary school; positions of or for technicians, and skilled employees;
- 06 working days for other jobs.
6. 04 more cases of suspension of an employment contract
The Labor Code 2019 of Vietnam maintains cases of suspension of an employment contract according to the Labor Code 2012 as follows:
- The employee is conscripted into the army;
- 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
04 supplemented cases of suspension of an employment contract in 2021 include:
- The employee is conscripted into the militia;
- 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.
7. New regulation on the right of an employee to unilaterally terminates the employment contract
The Labor Code 2019 of Vietnam allows employees to unilaterally terminate the employment contract, provided he/she notices the employer in advance:
- At least 45 days in case of an indefinite-term employment contract;
- At least 30 days in case of an employment contract with a fixed term of 12 – 36 months;
- At least 03 working days in case of an employment contract with a fixed term of under 12 months;
In the below cases, an employee 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.
8. Responsibilities of the parties upon termination of an employment contract
According to the Labor Code 2012 of Vietnam, within 7 working days after termination of a labor contract, the two parties shall make all payments related to the interests of each party; in special cases, this time limit may be extended but must not exceed 30 days. The Labor Code 2019 of Vietnam has doubled this period. According to 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.
Above are all the new regulations on labor contracts applied from January 1, 2021. Employees when entering into a contract during this time should pay attention to avoid affecting their interests as well as entering into an inappropriate contract leading to invalidation.
Thuy Tram
- Key word:
- Labor Code 2019
