Types of labor contract under the law of Vietnam

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The term of labor contract is defined in Clause 1, Article 13 of the Labor Code 2019 as follows: “A labor contract is an agreement between an employee and an employer on a paid employment, salary, working conditions, rights and obligations of each party in the labor relationship”.
Note: To determine whether a contract is a labor contract or not, Vietnamese law is not based on the name but on the content of the contract. In case the employer and employee agree to sign a contract under a different name but containing the contents of paid employment, salary, management, administration and supervision of one party shall still be considered as an employment contract.

Form of a labor contract:

Basically, the Labor Code 2019 allows a labor contract to be entered into in two forms, which is in writing and by electronic form, the legal validity which is the same.
Specifically, Clause 1, Article 14 of the Labor Code 2019 stipulates that a labor contract must be entered into in writing and made in 02 copies, the employee keeps 01 copy, the employer keeps 01 copy. In addition, a labor contract could be entered into by electronic form via data messages according to the provisions of the law on electronic transactions with the same value as a written labor contract.
However, the two parties shall enter into a verbal labor contract for a term of less than 1 month, except for the cases specified in Clause 2, Article 18 and Point a, Clause 1, Article 145 and Clause 1, Article 162 of the Labor Code 2019.

Contents of a labor contract:

  • According to Clause 1, Article 21 of the Labor Code 2019, a labor contract must have the following main points:
  • Name, address, representative’s full name and title of the employer;
  • Full name, date of birth, gender, place of residence, number of citizen identification card/ identity card/p assport of employee;
  • Job description and work location;
  • Term of labor contract;
  • Salary according to job or title, salary payment method, salary payment term, salary allowance and other additional payments;
  • Regimes for raising grade of salary and raising salary;
  • Working hours and rest periods;
  • Personal protective equipment for employee;
  • Social insurance, health insurance and unemployment insurance;
  • Basic training and advanced training, occupational skill development.

Types of labor contract:

  • Clause 1, Article 20 of the Labor Code 2019 uses the term of a contract as criteria to classify labor contracts. Accordingly, a labor contract includes an indefinite-term labor contract and a fixe- term labor contract:
  • An indefinite-term labor contract is a contract in which the two parties neither fix the term nor the time of termination of the contract;
  • A fixed-term labor contract is a contract in which the two parties fix the term of the contract for a duration of up to 36 months from the date of its validation.

Transformation of a labor contract:

  • In fact, it may happen after a fixed-term labor contract expires, the employee still continues to work. At that time, the employer and employee shall comply with the provisions of Clause 2, Article 20 of the Labor Code 2019 as follows:
  • Within 30 days from the expiration date of the labor contract, both parties shall conclude a new labor contract. Before such a new labor contract is concluded, the parties’ rights, obligations and interests specified in the old employment contract shall remain effective;
  • If a new labor contract is not concluded after the 30-day period, the existing employment contract shall become an indefinite-term labor contract;
  • The parties may enter into 01 more fixed-term labor contract. If the employee keeps working upon expiration of this second fixed-term employment contract, the third labor contract shall be of indefinite term, except for labor contracts with directors of state-invested enterprises and the cases specified in Clause 1 Article 149, Clause 2 Article 151 and Clause 4 Article 177 of the Labor Code 2019.

Should you need further information on the labor laws of Vietnam, feel free to contact us.


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