Viet Nam has modernized its Labour Code to better protect workers’ rights,
reduce bureaucracy for employers, and help support the Government’s drive for
international integration, economic growth and prosperity for all. The new law,
which was passed by the National Assembly in November 2019, is the result of
extensive consultations with experts, national and local stakeholders, and the
public at large. It will come into effect in January 2021.
This information sheet is an introduction to the provisions on labour relations
and employment contracts.
June 2020
Get to know your new Labour Code 2019
Employment
contracts
Who is a worker under the Labour Code 2019
If a person is working for an employer under an
agreement, and is remunerated, managed, directed
and supervised by the employer, they are a worker.
A worker is a person who is 15 years or older, subject
to certain exceptions [See Information Sheet: Minor
Workers]. Expatriates working in Vietnam must meet
additional criteria before they can enter into a lawful
employment contract. A worker can enter into employ-
ment contracts with more than one employer.
A worker usually enters into an employment contract
directly, except in the cases of minor worker or a group
of workers authorizing one person to sign the contract
on their behalf.
Who is an employer under the Labour Code?
An employer can be an enterprise, an institution, an
agency, a cooperative, a household or an individual. In
case the employer is a legal entity (enterprise, agency,
organization, cooperative), its legal or authorized
representative will sign the labour contract.
What is an employment contract?
An employment contract is an agreement made
between a worker and an employer and sets out the
terms and conditions of employment. If a document
has the nature of an ‘employment contract’ but is called
something else, it will be considered an employment
contract under the new law.
Except in the case of employment for less than one
month, the employer must provide a written contract
and give a copy to the worker. The employer will violate
the law if this is not done. Domestic workers and
workers under the age of 15 must always be given a
written contract, even for short-term employment.
Types of employment contract
There are only two types of employment contract: a
contract for an indefinite period of time or for a
definite period of time.
An indefinite term contract is an employment contract
in which the date of contract termination is not fixed.
A definite term contract is a contract with a fixed term.
The duration of a definite term contract must not exceed
36 months. Where a definite term contract reaches its
expiry, the employer and worker can sign another
definite term contract. Any third contract entered into by
the parties must be an indefinite term employment
contract. Exceptions to this general rule apply to individ-
uals employed as directors of State-Owned Enterprises
and other cases stipulated in the Code.
An employment contract must respect minimum
legal conditions
An employment contract cannot set wages or condi-
tions of work that are lower than those set out in the
Labour Code, are below the applicable minimum wage
or terms agreed in collective bargaining agreements.
Any contract that sets conditions below these minima
will be wholly or partially invalid. The law provides that
partially invalid contracts can be amended and gives
the People’s Court the power to declare a contract
invalid. An invalid labour contract does not lead to
termination of employment and has to be revised to
comply with law and/or collective agreements.
What must be put in an employment contract?
An employment contract should specify, at a minimum:
• who is the employer and employee (specific details
are required);
• the work to be undertaken and place of work;
• the duration of the employment contract
• details on wages, method and time of payment,
allowances and additional payments
• rules on promotion and wage increases
• working time and rest periods
• any personal protective equipment for the worker (if any)
• social insurance and health insurance
• opportunities for training and skill development.
Employment contracts may include other terms,
provided these are consistent with the law.
How can an employment contract be amended?
A party who wishes to change any terms in an employ-
ment contract should notify the other party at least 3
working days in advance. The parties may then sign an
annex to the original contract, to record their new
agreement. If the parties cannot agree upon new terms,
then the employment contract will continue as before.
Example: Worker W signed an employment contract with X
Manufacturing Ltd in June 2019. A worked as an interpret-
er. For business reasons, in September 2019, X assigned W
to work as a secretary for 30 days. After that, X asked W to
work as secretary permanently. If W agrees, W and X must
sign an annex to record the change of working position. If
W disagrees, then W has the right to continue working as
an interpreter under the original contract.
Employers’ responsibilities in recruitment
Employers must cover all expenses relating to recruit-
ment. These include job advertisement, administration
of applications, organization of skill testing and examina-
tion or any other expenses. Employers are prohibited to:
• Keep original copies of identity cards, educational
certificates of workers
• Require workers to have mortgages (either money or
kinds) to secure employment contract
• Force workers to implement employment contract to
pay debts borrowed from the employers.
How can an employment contract be terminated?
The Labour Code sets out detailed rules on when and
how an employment contract can be terminated by the
worker and the employer. For more information, see
Information Sheet: Termination of Employment
Probationary periods of employment
An employer and worker may negotiate a probationary
period at the beginning of the employment. An
employee can only be asked to complete one proba-
tionary period. The probationary period can be dealt
with as a separate ‘probation’ contract or included as
part of the employment contract. An employer and
worker may negotiate the wage to be paid during the
probationary period, however this must be at least 85
per cent of the wage normally applicable to the work.
The duration of the probation period may be negotiat-
ed by the parties on the basis of the nature and
complexity of the work, but is subject to the following
maximum periods:
• 180 days for management level positions within an
enterprise (as defined in the Law on Enterprise)
• 60 days for work that requires technical qualification
of a technical college diploma or above
• 30 days for work that requires technical qualification
of a secondary certificate
• 6 days for other types of work.
It is unlawful for parties to agree on a probationary
period of employment where the employment contract
is less than 1 month in duration.
Rules of termination during and at the end of a the
probation period
During any probation period, either party can termi-
nate the contract without notice and without incurring
any obligation to pay compensation to the other party.
Upon completion of the probation period, the employer
must inform the worker if he or she has completed the
probation satisfactorily. If an employer fails to do this,
the probation period will be considered as completed
satisfactorily. If a worker continues to work for an
employer following the expiry of the probation period,
the parties must enter into an employment contract.
For more information
This leaflet describes the basic rights and duties provided under the new Labour Code 2019. More details all of the above matters,
are set out in the following chapters of the Code: Chapter I: General Provisions and Chapter III: Employment Contract.
Photo@ILO
This is a product of the New Industrial Relations Framework project. Funding for the New Industrial Relations Framework
project is provided by the United States Department of Labor under cooperative agreement number IL- 29690-16-75-K-11. One
hundred percentage of the total costs of the project or program is financed with Federal funds, for a total of 5.1 million dollars.
This material does not necessarily reflect the views or policies of the United States Department of Labor, nor does mention of
trade names, commercial products, or organizations imply endorsement by the United States Government.
ILO Country Office for Viet Nam
304 Kim Ma Street, Hanoi, Viet Nam
Tel: +84 24 38 500 100
Fax: +84 24 37 265 520
Website: www.ilo.org/hanoi
Facebook: Vietnam.ILO
Email : [email protected]
Photo@ILO
