Get to know your new Labour Code 2019

Employment
contracts

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

June 2020 and employment contracts.
Who is a worker under the Labour Code 2019 An employment contract cannot set wages or condi-
tions of work that are lower than those set out in the
If a person is working for an employer under an Labour Code, are below the applicable minimum wage
agreement, and is remunerated, managed, directed or terms agreed in collective bargaining agreements.
and supervised by the employer, they are a worker. Any contract that sets conditions below these minima
will be wholly or partially invalid. The law provides that
A worker is a person who is 15 years or older, subject partially invalid contracts can be amended and gives
to certain exceptions [See Information Sheet: Minor the People’s Court the power to declare a contract
Workers]. Expatriates working in Vietnam must meet invalid. An invalid labour contract does not lead to
additional criteria before they can enter into a lawful termination of employment and has to be revised to
employment contract. A worker can enter into employ- comply with law and/or collective agreements.
ment contracts with more than one employer.
What must be put in an employment contract?
A worker usually enters into an employment contract
directly, except in the cases of minor worker or a group An employment contract should specify, at a minimum:
of workers authorizing one person to sign the contract • who is the employer and employee (specific details
on their behalf. are required);
• the work to be undertaken and place of work;
Who is an employer under the Labour Code? • the duration of the employment contract
• details on wages, method and time of payment,
An employer can be an enterprise, an institution, an allowances and additional payments
agency, a cooperative, a household or an individual. In • rules on promotion and wage increases
case the employer is a legal entity (enterprise, agency, • working time and rest periods
organization, cooperative), its legal or authorized • any personal protective equipment for the worker (if any)
representative will sign the labour contract. • social insurance and health insurance
• opportunities for training and skill development.
What is an employment contract? Employment contracts may include other terms,
provided these are consistent with the law.
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. How can an employment contract be amended?

An indefinite term contract is an employment contract A party who wishes to change any terms in an employ-
in which the date of contract termination is not fixed. ment contract should notify the other party at least 3
working days in advance. The parties may then sign an
A definite term contract is a contract with a fixed term. annex to the original contract, to record their new
The duration of a definite term contract must not exceed agreement. If the parties cannot agree upon new terms,
36 months. Where a definite term contract reaches its then the employment contract will continue as before.
expiry, the employer and worker can sign another
definite term contract. Any third contract entered into by Example: Worker W signed an employment contract with X
the parties must be an indefinite term employment Manufacturing Ltd in June 2019. A worked as an interpret-
contract. Exceptions to this general rule apply to individ- er. For business reasons, in September 2019, X assigned W
uals employed as directors of State-Owned Enterprises to work as a secretary for 30 days. After that, X asked W to
and other cases stipulated in the Code. work as secretary permanently. If W agrees, W and X must
sign an annex to record the change of working position. If
An employment contract must respect minimum W disagrees, then W has the right to continue working as
legal conditions an interpreter under the original contract.
How can an employment contract be terminated? Employers’ responsibilities in recruitment

The Labour Code sets out detailed rules on when and Employers must cover all expenses relating to recruit-
how an employment contract can be terminated by the ment. These include job advertisement, administration
worker and the employer. For more information, see of applications, organization of skill testing and examina-
Information Sheet: Termination of Employment tion or any other expenses. Employers are prohibited to:
• Keep original copies of identity cards, educational
Probationary periods of employment certificates of workers
• Require workers to have mortgages (either money or
An employer and worker may negotiate a probationary kinds) to secure employment contract
period at the beginning of the employment. An • Force workers to implement employment contract to
employee can only be asked to complete one proba- pay debts borrowed from the employers.
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.
 Photo@ILO

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.

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

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Tel: +84 24 38 500 100 Facebook: Vietnam.ILO
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