MANAGEMENT LETTER

REVIEW OF LABOR CONTRACT IN THE FIRST HALF YEAR

REVIEW AND MANAGEMENT OF LABOR CONTRACT

Enterprises are not only responsible for employment, wages, benefits, and other obligations to employees but also have to bear additional responsibilities to state agencies. This responsibilities are created and limited by valid and legally signed labor contracts, especially concerning the following agencies:

1.   Insurance Agencies: declaration and payment of compulsory insurance.
2.   Tax department: Tax declaration, payment, and annual tax settlements.

To avoid the risks arising from the employer’s obligations when:

1. The probationary period is over.
2. The contract has expired but the termination procedures are not done in time.
3. Early termination in cases of underperformance by an employee.
4. Update the appendix of benefits and income beyond the signed contract.

In July and August 2023, VIVA Business Consulting will cooperate with you in reviewing and completing the labor contract system according to regulations, in accordance with the company’s policies:

1. Make a list of employees.
2. Classify and re-evaluate signed contracts.
3. Carry out procedures for termination, liquidation and extension.
4. Prepare appendices to update benefits, job descriptions…
5. Review and complete the income structure to optimize the cost of personal income tax, compulsory insurance, associated with the internal labor regulations, salary, bonus and welfare policies of the enterprise.

 

The above work is done completely free of charge for clients who use VIVA’s labor relations management services.

NOTES ON CHANGES AND TERMINATION OF EMPLOYMENT CONTRACTS

Types of labor contracts and renewal procedures

1. An indefinite-term labor contract is a contract in which both parties do not determine the term and the time of termination of the contract’s validity;
2. A definite-term labor contract is a contract in which both parties determine the term and the time of termination of the contract’s validity within 36 months from the effective date of the contract.

When these labor contracts expire but the employees continue to work, the following shall be done:

1. Within 30 days from the date of expiration of the labor contract, both parties must sign a new labor contract; during the period of not signing a new contract, the rights, obligations and benefits of both parties shall be performed according to the signed contract;
2. If the 30-day period elapses from the labor contract expiration date without signing a new employment contract,  the definite term will become an indefinite term labor contract;
3. In case the two parties sign a new labor contract which is a definite-term labor contract, it is only allowed to sign one more time. After that, if the employee continues to work, an indefinite-term labor contract must be signed.

Regulations on probation period

The probationary period shall be agreed upon by both parties based on the nature and complexity of the work, but this period shall only be undertaken once for a specific position, and the following conditions must be met:

1. Not exceeding 180 days for managers’ positions as prescribed by the Enterprises Law;
2. Not exceeding 60 days for positions requiring professional or technical qualifications from college level or higher;
3. Not exceeding 30 days for positions requiring professional or technical qualifications of intermediate level, technical workers, or specialized staff.;
4. Not exceeding 06 working days for other positions.

Typical cases of termination of labor contracts

1. Expiration of labor contract.
2. The tasks have been completed according to the labor contract.
3. Both parties agree to terminate the labor contract.
4. The employee is disciplined and fired.
5. The employee’s unilateral termination following regulations.
6. The employer’s unilateral termination following regulations
7. Employers terminate employees according to regulations.
8. The work permit expires for foreign employees working in Vietnam according to regulations.
9. In case the probationary agreement is agreed upon in the labor contract, the probationer fails to meet the requirements or one side cancels the probation agreement.

We have been successfully providing service for thousands of leading companies from Hong Kong, Japan, US, EU, Singapore, India, China, Korea… in forms of FDI companies, Foreign representative offices, Foreigners working in Vietnam, Vietnamese SMEs, Chief Operation Officers.

Feel free to contact us should you have any queries or questions.

 

Read more:

• Wage regulations – transparency in labor relations
• Labor compliance procedures – registration internal labor regulations
• Fines according to violations in labor law
• Labor laws and regulations in Vietnam – 100 popular questions you need to know
• Manage employment relations in Vietnam
• Labor contracts in Vietnam – how to terminate by the employer?
• Managing labor relations for expats in Vietnam
• Foreign employees in Vietnam – what you need to know
• Doing business in Vietnam – business records management
• FDI companies in Vietnam – managing the required compliance procedures
• Types of employment contracts – probationary – cases of termination