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Drafting the labor contract in Vietnam

The labor 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. The labor contract such as legal documents most authentic in labor relations. Therefore, when agreements, sign labor contracts, the parties need to consider carefully to maximize their interests. In this content, Viet An Law Firm is consulting to Clients have a demand on the way draft the labor contract as well as notes when jointly draft and sign the labor contract.

Contractual service in Vietnam

Legal documents

  • Civil code 2015;
  • Labor code 2019;
  • Decree 145/2020/NĐ-CP guideline Labor code on working conditions and labor relations;

Type of labor contract

The labor contract is quite special compared to other types of other civil or economic contracts, which is the law is stipulated specify labor contracts in practical. As stipulated in Article 20 Labor code 2019 is the labor contract shall be concluded in one of the following types:

  • An indefinite-term labor contract is a contract in which the two parties neither fix the term nor the time of termination of the contract;
  • A definite-term labor 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.

Note: With the definite-term contract is expires, in case the two parties sign a new labor contract is a definite-term contract, it is only allowed to sign one more time. If the employees keep working that the two parties have to shall be of indefinite term labor contract

Forms of labor contract

  • The labor contract shall be concluded in writing and made into 02 copies, the employees kept 01 copy, the employer kept 01 copy.
  • The labor contract is concluded in the form of electronic data conformable with electronic transaction laws shall have the same value as that of a physical contract.
  • Both parties may conclude an oral contract with a term of fewer than 01 months, except for the cases specified in Clause 2 Article 18, Point a Clause 1 Article 145, and Clause 1 Article 162 of this Labor Code 2019.

Who has the right to conclude the labor contract?

For the employer

The person who concludes the labor contract on the employer’s side is the person as follows:

  • The legal representative of the company, Cooperative
  • The head of the organization under laws;
  • the household’s owner;
  • The individual who directly hires the employee.

For the employees

The person who concludes the labor contract on the employee’s side is the person as following

  • The employee is 18 or older;
  • The employees aged 15 to under 18 with the written consent by their legal representative;
  • The legal representative of employees aged under 15 and have the consent of the person who aged under 15
  • The employees are lawfully authorized by the group of employees to conclude the employment contract.

Basic terms in the labor contract

A labor contract is a freedom agreement between the employees and the employer, therefore, parties have the right to a freedom agreement and sign the term in the labor to be suitable with conditions and nature of work. Therefore on basic, the content of labor contract shall have the following main contents:

Parties’ information in the contract

Records on honestly details information of the employer and the employee:

  • Name and address of the employer or legal representative: Name and address of the company, agency, organization, cooperative, household that hires or uses labor under the labor contract, under the business registration certificate or cooperative registration certificate or the investment registration certificate or the decision on the establishment of an agency or organization; if individuals hire or use the employees, the full names of such individuals as shown in their identity cards or passports are required.
  • Full name, date of birth, gender, permanent residential address, number of identity card, or other lawful documents of the employees;

The job and workplace

  • Jobs: The jobs that the employee have to perform;
  • Workplace of the employees: Workplace of employees: Scope of agreed work and location where the employees work; if the employees work in many different places, the main workplace shall be provided

Duration of the labor contract

The term of the labor contract shall include The number of months and days of labor contract execution, time of the labor contract commencement and termination (for definite-term labor contracts or casual employment contract or piece work); time of the labor contract commencement (for indefinite term labor contract).

From the duration of the labor, we can determine the type of labor contract

About salary rate, the form of payment, payment duration, allowances, and other additional payment

  • Salary rate, allowances, and other additional payments;
  • Form of payment;
  • Payment duration.

The parties are agreed on freedom on allowances and other additional payments but have to record the amount and conditions to be entitled to it.

Regimes for promotion and pay rise;

The parties agreed on details in conditions, time, requirements, schedule, specific time, salary rate after that has been raised

Working hours, rest periods;

The parties are agreed on details on working hours, rest hours in principle:

  • Working hours per day and a week; shift; start or end of a working day, week or shift; working days per week; overtime and overtime-related provisions;
  • Start and end of break time; weekly, annual days-off, holidays, personal leaves, unpaid leaves.

Social insurance, health insurance, and unemployment insurance;

Due to the article is the guarantee benefits of the employees as well as the obligations of the employer so the parties have to have the regulation about this term in the labor contract. The parties note agreement on the following issues:

  • Percentage of the monthly salary shall be paid for social insurance, unemployment insurance, medical insurance by employers and employees as prescribed in the law on social insurance, unemployment insurance, and medical insurance
  • Methods time of payments for social insurance, unemployment insurance, and medical insurance, made by employers and employees.

Other terms agreed by both parties

Depending on the nature of works that the parties can be agreed on some issues are as follows:

  • Regimes on labor protection;
  • Training, training, and refresher courses improving professional skills;
  • Personal income tax of the employees;
  • Right and obligations between the parties;
  • When the employees’ job is directly related to the business secret, technological know-how as prescribed by law, the employer has the right to sign a written agreement with the employee on the content and duration of the protection of the business secret, technology know-how, and on the benefit and the compensation obligation in case of violation by the employee.
  • For the employee who works in agriculture, forestry, fishery, or salt production, both parties may exclude some of the aforementioned contents and negotiate additional agreements on settlement in the case when the contract execution is affected by a natural disaster, fire, or weather.

Note: The labor contract is effective from the date of signing unless otherwise agreed by both parties or prescribed by law.

  • The employee may enter into employment contracts with more than one employer, provided that he/she fully performs all terms and conditions contained in the concluded contracts.
  • The parties sign the labor contract in principles: Voluntariness, equality, good faith, cooperation, and honesty. Freedom to enter into an employment contract that is not contrary to the law, the collective bargaining agreement, and social ethics.

Some questions on the labor contract

Is it possible to conclude the labor contract through electronic form?

As stipulated in Labor code 2019 that the labor contract is concluded in the form of electronic data conformable with electronic transaction laws shall have the same value as that of a physical contract.

Can the labor contract conclude orally?

Except for some cases, the labor contract may only conclude an oral contract with a contract that has the term of less than 01 month

Is the company required to hand over a contract to employees?

As stipulated in Article 14 of Labor code 2019 that the labor contract shall be concluded in writing and made into two copies, one of which will be kept by the employee, the other by the employer, except the labor contract concluded through the form of electronic data.

This content above is a consulting of Viet An Law Firm related to the drafting of labor contracts, Clients who are interested in the field of labor law consulting or have related questions or need to use drafting services. Labor contract, please contact Viet An Law Firm for the best consulting.

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