Consulting on Employment Contract in Vietnam

An employment contract (a.k.a. labor contract) is an agreement between an employee and an employer regarding paid employment, working conditions, rights, and obligations of each party in the labor relationship. An employment contract is the most authentic legal document in labor relations. Therefore, when agreeing and signing an Employment Contract, the parties must consider it carefully to maximize their benefits. In this article, Viet An Law would like to advise interested clients on Consulting on Employment Contract in Vietnam as well as things to note when participating in consulting and signing an employment contract.

Type of employment contract in Vietnam

According to the provisions of Article 20 of the Labor Code 2019, an employment contract is concluded according to one of the following types:

• An indefinite-term employment contract is a contract in which the two parties do not specify the term or termination date of the contract;
• A fixed-term employment contract is a contract in which both parties determine the term and termination date of the contract within no more than 36 months from the effective date of the contract.

Form of employment contract

• The employment contract must be concluded in writing and made in 02 copies, the employee keeps 01 copy, and the employer keeps 01 copy;
• An employment contract concluded through electronic means in the form of a data message following the law on electronic transactions has the same value as a written Employment Contract;
• Both parties can enter into a verbal employment contract for contracts 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 the Labor Code 2019.

Subjects participating in an employment contract in Vietnam

Employers

The person who signs the employment contract with the employee is a person in one of the following cases:

• The legal representative of the enterprise or cooperative;
• Heads of agencies, units, and organizations according to the provisions of law;
• Head of household;
• Directly recruited individuals.

Employees

The person who signs the employment contract on the employee’s side is a person in one of the following cases:

• Employees aged 18 years or older;
• Minor employees from 15 years old to under 18 years old and have written consent from the employee’s legal representative;
• Legal representative for people under 15 years old and with the consent of the person under 15 years old;
• The employee is legally authorized by the employees in the group to enter into an employment contract.

Basic Terms in employment contract in Vietnam

An employment contract is a free agreement between the employee and the employer, therefore, the parties have the right to freely agree and sign the terms of the contract to suit the conditions. And nature of work. However, the content of an employment contract  must have the following basic provisions:

• Information of the parties in the contract
• Term of the employment contract
• Salary level, payment method, salary payment period, salary allowances, and other additional payments
• Promotion regime, rank promotion, salary increase
• Working time, rest time
• Social insurance, unemployment insurance, and health insurance
• Other terms are agreed upon by both parties.

Note: The employment contract takes effect from the date of conclusion unless the parties agree otherwise or the law provides otherwise.

• Employees can enter into Employment Contracts with multiple employers but must ensure full implementation of the agreed contents;
• The parties sign an employment contract on the principles of Voluntariness, equality, goodwill, cooperation, and honesty. Freedom to enter into an  employment contract but not against the law, collective labor agreement, and social ethics.

Work and work location

• Work: The work that the employee must perform;
• Employee’s working location: Scope and location of the employee’s agreed work; In case the employee works in many different locations, write down the main locations where the employee works.

Frequently Asked Questions when consulting on an employment contract in Vietnam

Can the employment contract be concluded electronically?

According to the Labor Code 2019, an employment contract concluded via electronic means in the form of a data message by the law on electronic transactions has the same value as a written employment contract.

Can an employment contract be concluded verbally?

Except in some cases, employment contracts can only be concluded verbally for contracts with a term of less than 1 month.

Is employment contract required notarized in Vietnam?

In Vietnam, employment contracts are generally not required to be notarized. It is common practice for employers and employees to sign contracts in the presence of witnesses or legal representatives to ensure clarity and mutual agreement.

Can employment contract can be automatically renewed in Vietnam?

In Vietnam, employment contracts can be automatically renewed, but this depends on the terms outlined in the contract itself:

• Fixed-Term Contracts: When contract expires, if both parties sign a new employment contract that is a definite-term Employment Contract, it can only be signed for a second time. Afterward, if  the employee continues to work without objection, both parties automatically join in an indefinite-term employment contract.
• Indefinite-Term Contracts: These contracts do not have a specified end date and naturally continue until either party decides to terminate the contract, following the legal procedures.
• Automatic Renewal Clauses: If the initial contract includes a clause for automatic renewal, this must be clearly stated. Both parties should be aware of and agree to the automatic renewal terms.
• Notification Requirements: If a party does not wish to renew the contract, they must provide appropriate notice as stipulated in the contract.

Above is advice from Viet An Law related to consulting on employment contract in Vietnam. If you confused about employment contract, Clients should seek legal advice if needed to ensure compliance with Vietnamese labor laws. Please contact Viet An Law for the best support.

Update: 10/2024