An Law Viet Nam Company Limited

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An Law Viet Nam Company Limited
Labor Consulting

Labor Contract and remarks

When a company hires employees, both parties need to sign a labor contract (as prescribed by law) to establish the employment relationship and record the rights, responsibilities of both. Labor contracts shall include all required content as prescribed by law, otherwise, the enterprise will be fined 25 Million VND for administrative violation.

What is a Labor Contract?

The Labor Contract shall be defined as a document recording negotiations between employees and employers regarding the salary, working conditions, rights and responsibilities of each party. It could be concluded that any documents with these 3 conditions shall be defined as Labor Contracts.

What is a Labor Contract Appendix?

The Labor Contract Appendix is part of the Labor Contract. It is used to adjust, amend the content of the Labor Contract (but cannot change contract payment terms).

What is a probationary contract?

The probationary contract is a negotiation between the employee and the enterprise about the scope of work during probation time, the timeline during probation, rights and responsibilities of each party during that period.

Relevant legal documents:

  1. Law on Labor 2019
  2. Circular 10/2020/TT-BLĐTBXH orient Law on Labor regarding the content of Labor Contract, Collective bargaining council and occupations and jobs that harm reproductive and child-rearing functions

Type of Labor Contract:

  1. Indefinite Term Labor Contract: is a type of contract that both parties do not negotiate the termination time of contract;
  2. Definite Term Labor Contract: is a type of contract in which both parties negotiate the termination time of the contract within the timeframe no more than 36 months counting from the effective time of labor contract.

Note: The seasonal contract (Labor Contract with less than 12 months in term) does not exist anymore. A Labor Contract, that is less than 12 months in term, is called a Definite Term Labor Contract.

A Labor Contract shall include:

  1. Employer information: name and address (as prescribed in business registration certificate/ founding certificate); Name, designation of the person who is authorized to sign.
  2. Employee information: Name, Day of birth, gender, resident address, phone number, email address (if any), ID card/passport. For foreign employees, a Work Permit Number or Certificate proves that they are not subject to a work permit.
  3. Scope of work: Should the jobs belong to the heavy intoxicant job, or extremely heavy, intoxicant (as prescribed in Circular 11/2020/TT-BLĐTBXH) then the exact names must be included so that employees can receive appropriate allowances.
  4. Working condition: should there be multiple locations, then the complete list of locations must be included;
  5. Labor Contract terms: Either it lasts no more than 36 months or be the “indefinite term contract”
  6. Salary information: salary, payment method/date; allowance, increase salary rate, increase salary policy;
  7. Working hours, resting time: working by day or week; from what time to what time, which day of the week…
  8. Labor protection uniform (should any);
  9. Social insurance, health insurances and unemployment insurances;
  10. Technical and vocational training (should any).

Content of Labor Contract Appendix:

Detailed regulations amendment, supplement clauses of Labor Contract. There are no specific sample forms or requirements of the Labor Contract appendix (besides the regulation of not changing the contract terms), the majority content of the Labor Contract appendix will be tailored by the enterprise.

Probation contract terms:

The same as the Labor Contract, but the information about Salary rate, insurance Vocational and technical training shall not be included.

Some remarks about signing The Labor Contract:

  1. The probation time can have separate contracts or integrate in the official Labor Contract, if:
    • There is one separate contract: In the probation period of time, employees will not participate for Social Insurance.
    • Integrate probation clause in Labor Contract: In the probation period of time, employees will participate for Social Insurance.
  2. Employees can sign the Labor Contracts with multiple employers at once time. Then with this situation, according to Social Insurance regulation, Unemployment Insurance will be based on the prior Labor Contract. While Health Insurance will be based on the higher salary one.
  3. But in reality, the majority of Social Insurance departments accept enterprises to participate in Social Insurance, Health Insurance, Unemployment insurance based on a labor contract.
  4. For less than one month Labor Contract, there is no requirement for Social Insurance but the enterprise will pay part of Social Insurance in employee’s salary (21,5%).

If you have any questions, please do not hesitate to contact An Luat Vietnam. Our company, with a team of experienced lawyers and consultants, will advise you to built and improve the labor contract. We ensure legal safety and legitimate benefits for all customer activities.