8 key clauses in employment contracts in Vietnam

Due to not thoroughly understanding the provisions of the Labour Code, as well as partly not daring to assert their legitimate interests in front of the business owner, employees are often disadvantaged in terms of benefits when the Labour contract is terminated. This article will focus on 8 key clauses in employment in contracts.

The Labour Code 2019 was promulgated and took effect from January 1, 2021, supplementing appropriate employment support solutions and policies to improve the quality of life and working conditions for employees. However, due to not thoroughly understanding the provisions of the Labour Code as well as partly not daring to assert their legitimate interests in front of the business owner, employees are often disadvantaged in terms of benefits when the Labour contract is terminated. Therefore, before commencing the job, employees should fully agree on the following aspects of the Labour contract:

1. Form of labour contract

According to the regulations, the Labour contract is signed in 2 copies, each party keeps one copy; for contracts with a term of less than 1 month, the parties may agree verbally. In addition, the current Labour law has allowed entering into Labour contracts through electronic means and has the same validity as a written Labour contract. However, there are no specific guidelines for entering into Labour contracts by electronic method.

There are two types of Labour contracts:

• A Labour contract with an indefinite term means a contract in which the two parties do not determine the term and the time of termination of the contract’s validity.
• A definite term Labour contract means a contract in which the two parties determine the term, and the time of termination of the contract’s validity within a period not exceeding 36 months from the effective date of the contract.

When the Labour contract expires but the employee has continued working, the parties should note the time limit for re-entering as well as the rights and obligations of the parties during the expiration of the Labour contract. Accordingly, within 30 days from the date of expiration of the Labour contract, the two parties must sign a new Labour contract; when a new Labour contract has not been signed, the rights and obligations of both parties shall be performed according to the signed contract.

If within 30 days from the date of expiration of the Labour contract, the two parties do not sign a new Labour contract, the signed contract becomes an indefinite-term Labour contract.

In case two parties sign a new Labour contract which is a definite term Labour contract, it is only allowed to sign one more time, after that, if the employee continues to work, he/she must sign an indefinite term Labour contract, except for the Labour contract for the person hired as the director in the state-owned enterprise and other cases as prescribed by the Labour law.

2. Eight key clauses in employment contracts

2.1 Scope of works

It is the work entered into by the parties in the contract. The employee must perform the work by himself and not assign it to another person without the consent of the employer.

2.2 Working time

Working hours must not exceed 8 hours in a day and not more than 48 hours a week. The employer has the right to determine the working hours by day or by week but must notify the employee. At the same time, the employer shall limit the time of exposure to harmful elements by relevant National Technical Regulations and laws.

2.3 Rest time

Employees are entitled to at least one day off each week (24 consecutive hours). Employers can arrange weekly rest days on Sundays or another fixed day of the week, but these must be recorded in the internal Labour regulations. In case it is not possible to take a weekly break due to the working cycle, the employer must ensure that the employee is entitled to at least 4 days off per month on average. In addition, employees are entitled to Tet holidays, other holidays with full salary according to the regulations of the State, and unpaid leave when getting married, children get married, death of parents (both husband and wife), or death of wife or husband, child death and unpaid leave as agreed with the employer.

2.4 Salary

The employee’s salary shall be agreed upon by the two parties in the Labour contract and must be paid fairly without discrimination against genders of employees who perform equal work. The employee’s salary must not be lower than the minimum wage prescribed by the State.

In case the employee works overtime on a normal working day, he/she must be paid at least 150% of the hourly wage of the normal working day; for weekly rest days, the salary must be at least equal to 200%; for public holidays, Tet holidays, paid day off, at least equal to 300%. When working at night, they are paid at least 30% more than the salary of the normal working day. Night working time is regulated from 10 pm to 6 am the next day.

2.5 Work location

This is one of the contents that employees need to pay attention to, the Labour law allows the parties to agree on a workplace located outside the headquarters, but this needs to be recorded in the Labour Contract to avoid the transfer of employees to work in other work that differs to the workplace agreed earlier.

2.6 Conditions on occupational safety and hygiene

Employers are responsible for fully equipping Labour protection equipment to ensure occupational safety and hygiene and improve working conditions for employees. Employees must comply with regulations on occupational safety, occupational hygiene, and internal Labour regulations of the enterprise. All organizations and individuals related to Labour and production must comply with the law on occupational safety, occupational hygiene, and environmental protection.

2.7 Social insurance

The policy on social insurance aims to gradually expand and improve material guarantee, contributing to stabilizing the life of employees and their families in cases of sickness, maternity, or end of working age, death, suffering a Labour accident, occupational disease, loss of a job, face risks or other difficulties. Types of compulsory or voluntary social insurance are applied to different subjects and enterprises to ensure that employees enjoy the most appropriate social insurance regimes.

2.8 Probationary agreement

The employer and the employee reach an agreement on the probation, rights and interests of both parties during the probationary period. During the probationary period, each party has the right to cancel the agreement without notice in advance and without compensation if the probationary job is not satisfactory as agreed by both parties. When the probationary job is satisfactory, the employer must accept the employee to work officially as agreed. The probationary salary is at least 85% of the official salary.

The probationary period will not exceed 180 days for the job of an enterprise manager according to the provisions of the Enterprises Law, the Law on Management and use of State capital invested in production and business at the enterprise; No more than 60 days for jobs with professional titles requiring professional and technical qualifications from college or higher; No more than 30 days for jobs with professional titles requiring intermediate professional qualifications, technical employees, and professional staff; No more than 06 working days for other jobs.