What are cases of invalid employment contracts in Vietnam?

What are cases of invalid employment contracts in Vietnam? (Internet image)

1. What are cases of invalid employment contracts in Vietnam?

According to Article 49 of the Labor Code 2019, cases of invalid employment contracts are as follows:

- An employment contract shall be completely invalid in the following cases:

+ The entire contents of the employment contract are illegal;

+ A person concludes the employment contract ultra vires or against the rules for employment contract conclusion specified in Clause 1 Article 15 of the Labor Code 2019;

+ The work described in the employment contract is prohibited by law;

- An employment contract shall be partially invalid when part of its contents is illegal but does not affect its remaining contents.

2. Settlements upon invalidation of an employment contract in Vietnam

Pursuant to Article 51 of the Labor Code 2019, regulations on settlements upon invalidation of an employment contract are as follows:

- Where an employment contract is declared as partially invalid, it shall be dealt with as follows:

+ The rights, obligations and benefits of the parties shall be settled in accordance with the collective bargaining agreement (or provisions of the law if there is no collective bargaining agreement);

+ The parties shall revise the invalidated part of the employment contract in accordance with the collective bargaining agreement or labor laws.

- In case an employment contract is completely invalidated, the rights, obligations and interests of the employee shall be settled in accordance with law. In case an employment contract is concluded ultra vires, another contract shall be concluded.

3. What happens in case both parties cannot reach a consensus on revision of the invalidated content?

In case both parties cannot reach a consensus on revision of the invalidated content:

- The employment contract will be terminated;

- Rights, obligations and interests of both parties during the period from first day on which the employee works under the partially invalidated employment contract to the day on which the contract is terminated shall be settled as follows;

+ Rights, obligations and interests of both parties during the period from first day on which the employee works under the partially invalidated employment contract to the day on which the contract is revised shall be settled in accordance with the effective collective bargaining agreement or, if such a collective bargaining agreement is not available, in accordance with law.

+ In case the salary under the invalidated employment contract is lower than the minimum salary prescribed by labor laws or the effective collective bargaining agreement, both parties shall negotiate the salary to ensure conformity with regulations. The employer shall pay the difference between the initial salary and the re-negotiated salary for the actual work period under the invalidated employment contract.

- Severance allowance shall be provided in accordance with Article 8 of Decree 145/2020/ND-CP.

- The work period under the invalidated employment contract shall be included in the actual work period as the basis for provision of benefits as prescribed by law.

(Clause 3, Article 9, Decree 145/2020/ND-CP)

Nguyen Ngoc Que Anh

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