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The employment contract stands as the cornerstone in the labor relationship between employees and employers. It serves as definitive proof that the establishment of a labor relationship creates value and warrants compensation for the efforts exerted. In this article, we will highlight some key points regarding employment contracts in Vietnam.
Employment Contract
According to Article 13, Clause 1 of the 2019 Labor Law of Vietnam, an employment contract is an agreement between the employee and the employer regarding paid work, wages, working conditions, rights, and obligations of each party in the employment relationship.
Even if the agreement uses different terminology but encompasses the elements of paid work, wages, and management responsibilities, it is still considered an employment contract.
Forms of Employment Contracts
Employment contracts must be in writing and prepared in two copies, with the employee retaining one copy and the employer holding the other. This rule applies unless the contract is verbally agreed upon. Electronic means can also be used to create employment contracts through data message in accordance with electronic transaction laws, rendering them legally valid.
In specific cases, employment contracts with a duration of less than one month can be verbally agreed upon, except as specified in Article 18(2), Point a, Article 145(1), and Article 162(1) of the 2019 Labor Law.
However, verbal employment contracts carry risks, especially if one of the parties decides not to fulfill their obligations. Typically, the employee is in a more vulnerable position and faces greater risks in verbal employment contracts.
Types of Employment Contracts
According to Article 20 of the 2019 Labor Law, there are two types of employment contracts in Vietnam:
a) Indefinite-term employment contracts: Contracts where the duration and termination time are not specified.
b) Fixed-term employment contracts: Contracts where both parties agree on a specific duration and termination time, not exceeding 36 months from the contract’s effective date.
If an employee enters into a new employment contract after the expiration of the initial fixed-term contract, they can only sign another fixed-term contract once. On the third occasion, the contract must be an indefinite-term one.
It’s crucial to note that having a defined or indefinite-term contract doesn’t mean the parties are obligated to work together for the entire period or indefinitely.
During the employment, both parties have the right to terminate the contract for various reasons. However, if termination occurs without mutual agreement, both parties need to consider legal and illegal termination procedures to protect their rights and interests.
ASL LAW is the top-tier Vietnam law firm for Employment and Labor Law. If you need any advice, please contact us for further information or collaboration.
