Labor Code of Vietnam 2012 - Chapter III LABOR CONTRACT

Chapter III LABOR CONTRACT

Chapter III

LABOR CONTRACT

Section 1. LABOR CONTRACT CONCLUSION

Article 15. Labor contract

A labor contract is an agreement between the employee and the employer on the paid job, the work conditions, the rights and obligations of each party in the labor relation.

Article 16. Form of labor contracts

1. A labor contract must be concluded in writing and made into 02 copies, the employee shall keep 01 copy, the employer shall keep 01 copy, except for the case prescribed in Clause 2 this Article.

2. For temporary jobs with terms under 03 months, the parties may conclude verbal contracts.

Article 17. Principles of labor contract conclusion

1. Voluntary, equitable, affable, cooperative and truthful.

2. The contract is freely concluded without violating the law, the collective labor agreement and social ethics.

Article 18. Responsibilities for labor contract conclusion

1. Before recruiting, the employer and the employee must directly conclude the labor contract.

In case the employee is from 15 to 18 years old, the labor contract conclusion must be agreed by the legal representative of the employee.

2. For casual works and regular works with terms under 12 months, the employee group may authorize an employee in the group to conclude the written contract; in this case, the validity of the contract is equal to each person.

The labor contract concluded by the authorized person must be enclosed with the list specifying the full names, ages, genders, residences, occupations and signatures of every employee.

Article 19. Responsibilities to provide information before the labor contract conclusion

1. The employer must provide information for employees about the work, work location, work conditions, working hours, break time, labor safety, labor hygiene, salary, method of salary payment, social insurance, the provisions on business secret protection, technical know-how and other issues directly related to the labor contract conclusion requested by the employee.

2. The employee must provide information for the employer about their full name, gender, residence, educational background, vocational skills, health condition and other issues directly related to the labor contract conclusion requested by the employer.

Article 20. The prohibited acts committed by the employer during the conclusion and performance of the labor contract

1. Keeping the originals of the identity papers, certificates and qualifications of the employee.

2. Requesting the employee to mortgage cash or property for the labor contract performance.

Article 21. Concluding labor contracts with multiple employers.

The employee may conclude contracts with multiple employers as long as they can ensure the implementation of the concluded contents.

For contracts concluded with multiple employers, the social insurance, medical insurance of the employee must comply with the Government’s provisions.

Article 22. Kinds of labor contracts

1. The labor contract must be concluded in one of the following kind:

a) Labor contracts without fixed term;

The labor contract without fixed term is a contract in which both parties do not specify the term and the expiry date of the contract.

b) Fixed-term labor contracts;

The fixed-term labor contract is a contract in which both parties specify the term and the expiry date of the contract within 12 to 36 months.

c) Casual labor contracts or regular labor contracts with terms under 12 months.

2. In case the employee keeps working when the labor contract prescribed in Point b and Point c Clause 1 this Article expires, both parties must conclude the new labor contract within 30 days as from its expiry date; if the new labor contract is not concluded, the contracts concluded as prescribed in Clause 1 this Article shall be come a labor contract without fixed term, and the contract concluded as prescribed in Point c Clause 1 this Article shall be come a labor contract with a fixed term of 24 months

The new labor contract being a fixed-term contract shall be concluded only one more time. After that, if the employee keeps working, the labor contract without fixed-term must be concluded.

3. It is prohibited to conclude casual labor contracts or regular labor contracts with terms under 12 months to do regular works from 12 months and above, except for temporary replacement of employees doing military service, taking maternity leave, suffering from sickness or occupational accidents, or taking other temporary leave.

Article 23. Labor contract contents

1. The labor contract must include the following contents:

a) Name and address of the employer or the legal representative;

b) The full name, date of birth, gender, residence, ID number or other legal papers of the employee;

c) The work and working location;

d) The labor contract term;

dd) The salary, method of salary payment, salary payment term, allowance and other additional pays;

e) The grade increase, salary increase regime;

g) The working hours, break time;

h) The labor protection equipment for the employee;

i) Social insurance and medical insurance.

k) The vocational training and improvement courses.

2. In case the employee doing works directly related to the business secret, technical know-how as prescribed by law, the employer is entitled to reach a written agreement with the employee on the contents and term of business secret,  technical know-how protection, the interests and compensation for the employee’s violations.

3. For employees working in the agriculture, forestry, fishery, salt industries, both parties may remove a number of primary contents from the labor contract and reach additional agreements on the settlement in case the contract performance is affected by natural disasters, fire and weather.

4. The contents of labor contracts with employees being hired as directors in the enterprise contributed by the State must comply with the Government’s provisions.

Article 24. Labor contract annex

1. The labor contract annex is part of the labor contract and as valid as an labor contract.

2. The labor contract annex is to specify a number of terms or to amend and supplement the labor contract.

In case the labor contract Annex specify a number of labor contract terms that leads to different interpretation of the labor contract, the labor contract contents shall apply.

In case the labor contract annex amends and supplements the labor contract, the amendments, supplements and date of effect must be specified.

Article 25. Labor contract effect

The labor contract takes effect as from the date of conclusion unless otherwise agreed by both parties or prescribed by the law.

Article 26. Probation

1. The employer and the employee may reach the agreements on the probation, the rights and obligations of both parties during the probation. If the probation is agreed, the probation contract may be concluded.

The probation contract includes the contents prescribed in Point a, b, c, d, dd, g and h Clause 1 Article 23 of this Code.

2. The employees working under casual labor contract do not have to undergo probation.

Article 27. Probation duration

Only one probation is given for a job. The probation duration varies according to the nature, the complication of the work and must satisfy the following conditions:

1. Within 60 days for works that demand college education or further;

2. Within 30 days for works that demand vocational intermediate education, technical workers, professional workers.

3. Within 6 working days for other works.

Article 28. Probation salary

The employee’s salary during the probation is agreed by both parties but must be at least 85% of the official salary.

Article 29. Probation expiry

1. If the probation is passed, the employer must conclude the labor contract with the employee.

2. During the probation, each party is entitled to terminate the probation without prior notice and without compensation if the probation fails to satisfy the requirements agreed by both parties.

Section 2. LABOR CONTRACT PERFORMANCE

Article 30. Doing works under the labor contract

The work under the labor contract must be done by the employee that concluded the labor contract. The working location must comply with the labor contract or other agreements between both parties.

Article 31. Transferring employees to do other works than in the labor contract

1. Upon sudden difficulties from natural disasters, fire, epidemics, from the implementation of preventive and remedial measures for occupational accidents and occupational illness, from electricity or water supply system malfunctions, or from the production and business demands, the employer is entitled to temporarily transfer the employee to do other work than in the labor contract within 60 cumulative working days in a year, unless otherwise agreed by the employee.

2. When the employee is temporarily transferred to other works than in the labor contract, the employer must notify the employee in advance at least 03 days, specify the duration and arrange works suitable for the employee’s health and gender.

3. The employee doing the works prescribed in Clause 1 this Article shall be paid for the new work. If the new work salary is lower than that of the old one, the old salary is kept within 30 working days. The new work salary must be at least 85% of that of the old one but must not be lower than the local minimum salary prescribed by the Government.

Article 32. Cases of labor contract suspension

1. The employee have to do military service

2. The employee is detained as prescribed by law provisions on criminal procedures.

3. The employee have to implement the decision on compulsory treatment and education in reformatories, detoxification centers or educational facilities.

4. The pregnant female employees prescribed in Article 156 of this Code.

5. Other cases agreed by the parties.

Article 33. Re-employing employees after the labor contract suspension expires.

Within 15 days as from the labor contract suspension expires as prescribed in Article 32 of this Code, the employee must be present at the workplace and the employee must re-employ the employee, unless otherwise agreed by the parties.

Article 34. Employees working shorter hours

1. The employees working shorter hours are employees that work less than the usual working hours by day or by week specified in the law provisions on labor, collective labor agreement, professional collective labor agreement or the employer’s provisions.

2. The employee may reach an agreement with the employer on the shorter working hours when concluding the labor contract.

3. The employee working shorter hours shall have the salary, rights and obligations similarly to that of other full-time employees, shall have equitable opportunities, labor safety and labor hygiene conditions without discrimination.

Section 3. AMENDING, SUPPLEMENTING, TERMINATING LABOR CONTRACT

Article 35. Amending and supplementing labor contract

1. During the performance of labor contract, the party that demands to amend and supplement the labor contract must notify to the other party in advance at least 3 working days of the contents being amended and supplemented.

2. If the agreement is reached, the amendment and supplement of the labor contract must be carried out by concluding the labor contract annex or concluding the new labor contract.

3. If the agreement on the amendment and supplement of the labor contract cannot be reached, the concluded labor contract shall continue to be performed.

Article 36. Cases of labor contract termination

1. The labor contract expires, except for the case prescribed in Clause 6 Article 192 of this Code.

2. The work under the labor contract is done.

3. Both parties agree to terminate the labor contract.

4. The employee satisfies the requirements of about social insurance duration and pension age as prescribed in Article 187 of this Code.

5. The employee is condemned to imprisonment, to death or prohibited from doing the work in the labor contract according to the legal judgment and decision from the Court.

6. The employee dies, is declared dead, missing or incapable of civil acts by the Court.

7. The employer being an individual dies, is declared dead, missing or incapable of civil acts by the Court; the employer not being an individual stops the operation.

8. The employee is disciplinarily dismissed as prescribed in Clause 3 Article 125 of this Code.

9. The employee unilaterally terminates the labor contract as prescribed in Article 37 of this Code.

10. The employer unilaterally terminates the labor contract as prescribed in Article 38 of this Code; the employer dismisses the employee due to changes in the mechanism, technology or for some economic reasons, or merger, separation of enterprises, cooperatives.

Article 37. The right to unilaterally terminate the labor contract of employees

1. The employee working under the fixed-term labor contract, casual labor contract or regular labor contract with term under 12 months is entitled to unilaterally terminate the contract sooner in the following cases:

a) The employee is not provided with the right work, the workplace or the working conditions as agreed in the labor contract;

b) The salary is not adequately or punctually paid as agreed in the labor contract;

c) The employee suffers from maltreatment, sexual harassment, coercive labor;

d) The employee or their family encounters difficulties that the labor contract cannot continue to be performed;

dd) The employee is elected to perform specialized duties at elective agencies or designated to hold a position in the State mechanism;

e) The pregnant female employee has to quit job under the direction from competent medical examination and treatment facilities.

g) The employees suffering from sickness or accidents cannot recover after 90 consecutive days of treatment for employees working under fixed-term labor contracts, or one fourth of the contract term for employees working under casual labor contract or regular labor contract with term under 12 months.

2. When unilaterally terminate the labor contract as prescribed in Clause 1 this Article, the employee must notify the employer:

a) At least 3 working days for the cases prescribed in Point a, b, c and g Clause 1 this Article;

b) At least 30 working days for fixed-term labor contracts, 03 working days for casual labor contracts or regular labor contracts with term under 12 months regarding the cases prescribed in Point d and dd Clause 1 this Article;

c) For the cases prescribed in Point e Clause 1 this Article, the advance notice time must comply with the provisions in Article 156 of this Code.

3. The employees working under labor contracts without fixed term are entitled to unilaterally terminate the labor contract but the employer must be notified in advance at least 45 days, except for the case prescribed in Article 156 of this Code.

Article 38. The right to unilaterally terminate the labor contract of the employer 

1. The employer is entitled to unilaterally terminate the labor contract in the following cases:

a) The employee regularly fails to complete the works according to the labor contract;

b) The employee suffering from sickness or accidents cannot recover after 12 consecutive months of treatment for labor contracts without fixed term, after 06 months for employees working under fixed-term labor contracts, or over one half of the contract term for employees working under casual labor contract or regular labor contract with term under 12 months

When the employee recovers, he/she may be considered to conclude the new contract.

c) The employer have to reduce the production and vacancies after taking all measures to overcome the consequences from natural disasters, fire or other force majeure;

d) The employee fails to be present at the workplace after the duration prescribed in Article 33 of this Code.

2. When unilaterally terminating the labor contract, the employer must notify the employee:

a) At least 45 days for labor contracts without fixed term;

a) At least 30 days for fixed-term labor contracts;

c) At least 30 working days for the case prescribed in Point b Clause 1 this Article and for casual labor contracts or regular labor contracts with term under 12 months.

Article 39. The employer must not unilaterally terminate the labor contract in the following cases:

1. The employee is undergoing treatment for sickness or occupational accidents, occupational illness under the decision from the competent medical examination and treatment facility except for the case prescribed in Point b Clause 1 Article 38 of this Code.

2. The employee is on annual leave, personal leave and other leave permitted by the employer.

3. The female employees prescribed in Clause 3 Article 155 of this Code.

4. The employee is on maternity leave as prescribed by law provisions on social insurance.

Article 40. Canceling the unilateral termination of the labor contract

Each party is entitled to cancel the unilateral termination of the labor contract before the advance notice time limit expires. The cancellation must be made in writing and agreed by the other party

Article 41. Illegal unilateral termination of the labor contract 

The illegalunilateral termination of the labor contract is the labor contract termination contrary to Article 37, 38 and 39 of this Code.

Article 42. Obligations of the employer when illegally unilaterally terminating the labor contract

1. Re-employing the employee under the concluded labor contract and pay the salary, social insurance, medical insurance for the days the employee is banned from working plus the salary of at least 02 months under the labor contract.

2. In case the employee does not wish to continue working, the employer must give the severance pay as prescribed in Article 48 of this Code apart from the compensation prescribed in Clause 1 this Article.

3. In case the employer does not wish to re-employ the employee and the employee agrees, both parties shall reach the agreement on the extra compensation equal to the salary of at least 02 months under the labor contract apart from the compensation prescribed in Clause 1 this Article and the severance pay as prescribed in Article 48 of this Code.

4. If no vacancy for the position in the labor contract is available but the employee still wishes to continue working, both parties must negotiate to amend and supplement the labor contract apart from the compensation prescribed in Clause 1 this Article.

5. For violations of the advance notice time, the employee must be paid a compensation equivalent to the his/her salary of the unnoticed days.

Article 43. Obligations of the employee when illegally unilaterally terminating the labor contract 

1. Being ineligible for severance pay and paying compensation equivalent to the half-month salary under the labor contract to the employee.

2. For violations of the advance notice time, the employer must be paid a compensation equivalent to the employee’s salary of the unnoticed days.

3. The training cost must be returned to the employer as prescribed in Article 62 of this Code.

Article 44. Obligations of the employer in case of changes in the mechanism, technology or economic reasons

1. In case of changes in the mechanism, technology that affect the employment of multiple employees, the employer is responsible to devise and implement the employment plan as prescribed in Article 46 of this Code; if new positions are available, the employees must be retrained and employed.

In case the employer cannot create new employments that the employees must be dismissed, the employer must give the redundancy pay to the employees as prescribed in Article 49 of this Code.

2. If the employee faces the risk of unemployment or dismissal for some economic reasons, the employer must devise and implement the employment plan as prescribed in Article 46 of this Code.

In case the employer cannot create new employments that the employees must be dismissed, the employer must give the redundancy pay to the employee as prescribed in Article 49 of this Code.

3. The dismissal of multiple employees prescribed in this Article is only carried out after the discussion with the internal labor representative organization and the provincial State labor management agency must be notified in advance 30 days.

Article 45. Obligations of the employer when merging, dividing, separating the enterprise or the cooperative

1. For the merger, division, separation of the enterprise or cooperative, the succeeding employer must be responsible to continue employing the existing employees and carry out the labor contract amendment and supplement.

In case there are not enough vacancies for the existing employees, the succeeding employer must be responsible to continue devising and implementing the employment plan as prescribed in Article 46 of this Code.

2. For ownership transfers or property use right transfers, the preceding employer must devise the employment plan as prescribed in Article 46 of this Code.

3. In case the employer dismisses the employee as prescribed in this Article, the employer must give the redundancy pay to the employee as prescribed in Article 49 of this Code.

Article 46. Employment plan

1. The employment plan must include the following contents:

a) The list and quantity of the employees being directly employed, the employees being retrained for re-employment;

b) The list and quantity of the retired employees;

c) The list and quantity of the employees being transferred to work shorter hours; the dismissed employees;

d) The measures and financial sources for implementing the plan.

2. The plan development must be participated by the internal labor representative organization.

Article 47. Obligations of the employer when terminating the labor contract

1. At least 15 days before the expiry date of the fixed-term labor contract, the employer must notify the employee in writing of the expiry date of the labor contract.

2. Within 07 working days as from terminating the labor contract, both parties are responsible to fully pay the amounts related to each party’s interests. This time limit may be longer if necessary but must not exceed 30 days.

3. The employer is responsible to complete the procedures for certifying and returning the social insurance book and other papers of the employee that have been kept by the employer.

4. In case the enterprise or cooperative is shut down, dissolve or bankrupt, the salary, severance pay, social insurance, medical insurance, unemployment insurance and other benefits of the employee under the collective labor agreement and the signed labor contract shall be paid first.

Article 48. Severance pay

1. When the labor contract terminates as prescribed in Clause 1, 2, 3, 5, 6, 7, 9 and 10 Article 36 of this Code, the employer is responsible to give the severance pay to the regular employees that have been worked for 12 months or more. A half- month salary shall be paid for each working year.

2. The working time for severance pay calculation is the total duration that the employee has actually worked for the employer excluding the time the employee has taken the unemployment insurance as prescribed in the Law on Social insurance and the time the employer paid the severance pay.

3. The salary for severance pay calculation is the average salary under the labor contract of the preceding 06 months before the employee is dismissed.

Article 49. Redundancy pay

1. The employer is responsible to give the redundancy pay to the dismissed regular employees that have worked for 12 months or more as prescribed in Article 44 and 45 of this Code. 1-month salary is paid for each working year but must not be lower than the salary of 02 months.

2. The working time for redundancy pay calculation is the total duration that the employee has actually worked for the employer excluding the time the employee has taken the unemployment insurance as prescribed in the Law on Social insurance and the time the employer paid the severance pay.

3. The salary for redundancy pay calculation is the average salary under the labor contract of the preceding 06 months before the employee is dismissed.

Section 4. LABOR CONTRACT INVALIDATION

Article 50. Labor contract invalidation

1. The labor contract is totally invalidated in one of the following cases:

a) The entire labor contract contents are illegal;

b) The labor contract is concluded by incompetent persons;

c) The works in the concluded labor contract is prohibited by law;

d) The labor contract restricts or obstructs the right to establish, join and participate in the Union activities of the employee.

2. The labor contract is partially invalidated when part of it violates the law provisions but does not affect the rest.

3. In case part or the entire labor contract specifies the employee’s interests that are inferior to that in the effective collective labor agreement, law provisions on labor, labor regulations, or the labor contract restricts other rights of the employee, part or the entire labor contract shall be invalidated.

Article 51. Authority to invalidate labor contracts

1. The Labor Inspectors, People’s Courts are entitled to invalidate labor contracts.

2. The Government shall specify the order and procedures for the Labor Inspectors, People’s Courts to invalidate labor contracts.

Article 52. Handling invalidated labor contracts

1. The partially invalidated labor contract shall be handled as follows:

a) The rights, obligations and interests of the parties shall be settled under the collective labor agreement or law provisions;

b) The parties shall amend, supplement the invalidated part of the labor contract to suit the collective labor agreement or law provisions on labor.

2. The totally invalidated labor contract shall be handled as follows:

a) In case of ultra vires signing prescribed in Point b Clause 1 Article 50 of this Code, the State labor management agencies shall guide the parties to sign it again;

b) The rights, obligations and interests of employees shall be settled under the collective labor agreement or law provisions;

3. The Government shall elaborate this Article.

Section 5. OUTSOURCING

Article 53. Outsourcing

1. Outsourcing is when an employee employed by an enterprise licensed to provide outsourcing services works for another employer and subject to the latter’s management while the labor relation with the outsourcing service provider is still sustained.

2. Outsourcing service is a conditional business and only provided for a certain number of works.

Article 54. Outsourcing service providers

1. Outsourcing service providers must pay a deposit and obtain the license to provide outsourcing services.

2. The maximum outsourcing duration is 12 months.

3. The Government shall specify the outsourcing licensing, the deposit payment and the list of works eligible for outsourcing.

Article 55. Outsourcing contract

1. The outsourcing service provider and the outsourcing party must sign the written outsourcing contract. The contract is made into 02 copies, each party keeps one copy.

2. The outsourcing contract must include the following contents:

a) The working location, the position being outsourced, the work detail and requirements for the outsourced employee;

b) The outsourcing duration, the starting time of the employee;

c) The working hours, breaking time, labor safety and hygiene conditions at the work place;

d) The responsibilities for the employees of each party.

3. The outsourcing contract must not include the agreements on the rights and interests of the employee that are inferior to that in the labor contract signed by the outsourcing service provider and the employee.

Article 56. Rights and obligations of outsourcing service providers

1. Providing the eligible employees consistently with the requirements of the outsourcing party and the labor contract signed with the employee.

2. Informing the employee about the outsourcing contract contents.

3. Signing the labor contract with the employee as prescribed in this Code.

4. Informing the outsourcing party about the employee’s résumé and requirements.

5. Fulfilling the obligations of the employer as prescribed in this Code; paying salaries, holiday pay, annual leave pay, work suspension pay, severance pay, redundancy pay, compulsory social insurance, unemployment insurance for the employee as prescribed by law.

Ensuring that the outsourced employee’s salary is not lower than that of the outsourcing party’s employees at equal levels, doing the same or equivalent job.

6. Recording the quantity of the outsourced employees, the outsourcing fees and sending reports to provincial State labor management agencies.

7. Disciplining employees that violate labor discipline when they are returned due to labor discipline violations.

Article 57. Rights and obligations of the outsourcing party

1. Notifying and guiding the outsourced employee about the labor regulations and other regulations.

2. The working condition discrimination against outsourced employees in favor of their own employees is prohibited.

3. Reaching agreements with the outsourced employees when they are mobilized to work on the night shift or to work overtime outside the outsourcing contract.

4. The outsourced employees must not be transferred to other employers.

5. Reaching the agreement with the outsourced employee and the outsourcing service provider on officially employing the outsourced employee in case the labor contract between the employee and the outsourcing service provider is unexpired.

6. Returning the employee to the outsourcing service provider if they are not eligible as agreed or if they violate labor discipline.

7. Providing evidence of the labor discipline violations of the outsourced employee for the outsourcing service provider for disciplining.

Article 58. Rights and obligations of outsourced employees

1. Doing the work under the labor contract signed with the outsourcing service provider.

2. Observing the labor regulations, labor discipline, collective labor agreement and the lawful management of the outsourcing party.

3. Receiving salary not lower than that of the outsourcing party’s employees at the same level, doing the same or equivalent job.

4. Lodging complaints with the outsourcing service provider in case the outsourcing party violates the agreements in the outsourcing contract.

5. Exercising the right to unilaterally terminate the labor contract with the outsourcing service provider as prescribed in Article 37 of this Code.

6. Reaching the agreement to conclude the labor contract with the outsourcing party after terminating the labor contract with the outsourcing service provider.