Many employees in Vietnam have concluded fixed-term employment contracts, but when the contract expires, the employer does not renew the contract. So, what actions are taken in cases where employees continue working when their employment contracts expire under the Labor Code 2019?
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Vietnam: What actions are taken in cases where employees continue working when their employment contracts expire? (illustration)
What is an employment contract in Vietnam?
According to the labor code, an employment 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 an employment contract.
Labor Code 2019 requires employers to enter into employment contracts with employees when they are hired.
Types of contracts
The new Labor Code has eliminated the seasonal employment contract form and only provides for two (2) types of contracts:
- An indefinite-term employment contract is one in which the two parties do not determine the term, time, or termination of the contract's validity;
- A definite-term employment 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 are the rights of employees in Vietnam when remaining working after their contracts expire?
There are many cases where the employer does not sign a new employment contract with the employee when their contracts expire 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 employment contract expires. Within this period, the parties must sign a new employment 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 employment 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 employment contract. This regulation does not apply to employment contracts with those hired as directors in state-owned enterprises and 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 employment contract expired and the parties have not signed a new employment contract, the definite-term employment contract becomes an indefinite-term employment contract.
Vietnamese 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
