Vietnam Labor Code 2019: Is a probationary agreement without a contract against the law?

Vietnam Labor Code 2019: Is a probationary agreement without a contract against the law?

Before officially establishing an employment relationship through an employment contract, the employer and the employee will usually agree on a trial job. But the question is that is the probationary agreement required to be made into a written contract?

Is probation required a signed contract?

Clause 1, Article 24 of the Labor Code 2019 regarding the terms for probation as follows: “An employer and an employee may include the contents of the probation in the employment contract or enter into a separate probation contract.”

Accordingly, when the parties have an agreement on the probationary contents, they can record the probation content in the employment contract or enter into a probation contract.

However, the Labor Code of 2019 does not set out specific regulations on the form of the probation contract, but only regulations on the form of the labor contract.

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Vietnam Labor Code 2019: Is a probationary agreement without a contract against the law?

According to Article 14 of the Labor Code 2019, an employment contract can be entered into three forms: written, verbal, and electronic data. In particular, the verbal labor contract is only applied to the labor contract with a term of less than 1 month, but in this case, the employee will not have to go through a probation period (based on Clause 2, Article 14, and Clause 3, Article 24 of the Labor Code 2019).

Therefore, if choosing a probationary agreement in a labor contract, the parties will have to record the terms into a written contract or through electronic data. If agreeing with a probation contract, the parties can choose the form of the contract.

Thus, when on probation, the parties are not required to sign a contract but can agree orally on the probation contract. That is, it is still legal to have a probation agreement without a written contract.

Oral agreement during probation, employees face many risks

As analyzed, the probationary period is not required to sign a written contract, but the parties can completely agree with each other orally. However, if following a probation contract in this form, employees will face many risks, such as:

1)     Vulnerable to infringing upon legitimate rights during the probationary period

According to the Labor Code 2019, during the probationary period, the employee will own the following benefits:

+ Guarantee of probationary period: No more than 180 days for the job relating to the management of businesses; no more than 60 days for jobs requiring a college degree or higher; no more than 30 days for jobs requiring intermediate qualifications, technical workers, professional staff; no more than 06 working days for other jobs (Article 25 of the Labor Code 2019).

+ Probationary salary: The probationary salary shall be negotiated by both parties and shall not be lower than 85% of the offered salary (Article 26 of the Labor Code 2019).

+ In addition, the employees are also guaranteed about working time, rest time, …

However, if the parties only make a verbal agreement on the issue of the probation contract, the above rights of the employee will be easily violated because there is no evidence to prove the contents of the agreed contracts. In many cases, the employer only pays 80% of the employee’s salary or prolongs the probationary period compared to regulations, etc.

2)     Employers often arbitrarily terminate employment

According to Clause 2, Article 27 of the Labor Code 2019, during the probationary period, each party has the right to cancel the signed probationary contract or labor contract without prior notice and compensation. Thus, whether the probationary contract is signed or not, both parties are free to cancel the probation agreement without prior notice.

However, with the mentality of not signing a contract, there is no legally binding document, so it is easy for businesses to let employees quit at will.

3)     There is no basis to settle conflicts when a dispute occurs

This is the biggest disadvantage for employees when agreeing with a probationary period without a contract. Due to the absence of legally binding documents, if an employee quits while on probation, the employer will often refuse to pay wages and other related benefits. At that time, the employee will face difficulties when proving before the competent authority to settle the dispute.

Therefore, although not legally required, to ensure their rights, employees should ask to sign a written probationary contract to have a basis for claiming legitimate rights.

ASL LAW provide services of advising on employment and labor law. If you need any inquiry, please contact us.


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