What happens if the employee continues to work after the contract expires in Vietnam?

In many cases in Vietnam, the term of the labor contract has expired but the employee continues to perform the work as in the contract and the employer agrees. What will happen in these cases?

What happens if the employee continues to work after the contract expires in Vietnam? (Illustration)

1. Types of employment contracts in Vietnam

There are two types of employment contracts:

- 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.

(According to Clause 1, Article 20 of the Labor Code 2019)

2. What if the employee continues to work after the contract expires in Vietnam?

If an employee keeps working when an employment contract mentioned in Point b Clause 1 of this Article expires:

a) Within 30 days from the expiration date of the employment contract, both parties shall conclude a new employment contract. Before such a new employment contract is concluded, the parties’ rights, obligations and interests specified in the old employment contract shall remain effective;

b) If a new employment contract is not concluded after the 30-day period, the existing employment contract mentioned in Point b Clause 1 of this Article shall become an employment contract of indefinite term;

c) The parties may enter into 01 more fixed-term employment contract. If the employee keeps working upon expiration of this second fixed-term employment contract, the third employment contract shall be of indefinite term, except for employment contracts with directors of state-invested enterprises and the cases specified in Clause 1 Article 149, Clause 2 Article 151 and Clause 4 Article 177 of this Labor Code.

- In case the two parties sign a new employment contract which is a fixed-term employment contract, it can only sign one more time, after that, if the employee continues to work, he/she must sign a indefinite-term employment contract.

However, the following cases may sign fixed-term employment contract of many times:

- Employment contracts with directors of state-invested enterprises.

- Employment contracts with elderly employees.

- Employment contracts with foreign workers working in Vietnam.

- In case the employment contract with an employee that is a member of the management board of the internal employee representative organization expires before the end of his/her term of office, the existing contract shall be extended until the end of the term of office.

(According to Clause 2, Article 20 of the Labor Code 2019)

Quoc Dat

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