Employment contract is an important document that stipulates the rights and obligations of employees and employers in labour relations. However, in some cases, an employment contract may not be stamped, leading to many disputes and disagreements about its validity. In this article, we will learn about this situation and determine the validity of an unstamped employment contract.

According to the Labour Code (2019), an employment contract is an agreement between an employee and an employer on paid employment, wages, working conditions, rights and obligations of each party in the employment relationship.

1. Conditions of validity of the labour contract

The Civil Code (2015) stipulates the form of civil transactions expressed in the form of written, verbal or specific acts. The form of a civil transaction is an effective condition of the transaction in cases where it is legally provided.

According to the Labour Code (2019) on the form of a labour contract, the contract must be made in writing, except for temporary jobs with a term of fewer than 3 months, the parties may enter into a verbal labour contract.

A civil transaction takes effect when the following conditions are fully satisfied:

  • Transaction participants have civil act capacity;
  • The purpose and content of the transaction does not violate  legal interdictions nor does not violate social ethics;
  • Trading participants are completely voluntary.

2. Regulations on stamping on contracts

Currently, both the Civil Code and the Labour Code do not have provisions for stamping contracts.

According to the validity conditions of the contract mentioned above, the legal provisions on the form of the contract do not include the seal element, but only consider the contract to be signed in writing or orally. The issue of having or not having a seal does not affect the validity of the contract in terms of form. Therefore, a labour contract without a seal does not fall under the form of an invalid contract as prescribed by law.

If the labour contract does not have the company’s seal but is signed by the legal representative and recognized by the company, the labour contract is still valid. In the event of a dispute, the parties must provide evidence to prove the will of the company and the employer towards the employment of labour such as: working time at the company is confirmed by the head of the department or other employees at the company; documents certifying the receipt of salary from the employer; other documents related to the employee’s activities such as working minutes, timesheets, appointment decisions, etc.

As there is currently no specific law on this issue, when a dispute occurs, The settlement of the legal consequences of an unstamped labour contract depends heavily on the views and arguments of the settler. In order to ensure the benefits of employees and employers when entering into labour contracts, both parties should consider full stamping in addition to signing in the contract.

In summary, it is very important to understand the validity of an unstamped labour contract to avoid disputes and disagreements in labour relations. Regardless of whether the employment contract is stamped or not, the most important thing is that the parties agree to the terms and conditions stated in the contract. The company seal is not the only sign of a contract’s legal validity. It should be understood that the seal is only one of the proofs of the binding of responsibility between the employer and the employee.

The article is based on laws applicable at the time noted as above and may no longer be appropriate at the time the reader approaches this article as the applicable laws and the specific cases that the reader may wish to apply may have changed. Therefore, the article is for referencing only.


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