TYPE OF LABOR CONTRACTS IN VIETNAM – HOW TO TERMINATE BY THE EMPLOYER?

Type of labor contracts | Case of terminate by the employer?

TYPE OF LABOR CONTRACTS IN VIETNAM – HOW TO TERMINATE BY THE EMPLOYER?

(Last Updated On: September 7, 2021)
Type of labor contracts | Case of terminate by the employer?

Type of labor contracts | Case of terminate by the employer?

A labor contract is an agreement between an employee and an employer on a paid job, working conditions, and the rights and obligations of each party. There are 03 types of labor contracts. A labor contract must be established in writing and made in two copies, one to be kept by the employee and the other by the employer. For temporary jobs with a duration of under 3 months, the parties may enter into a verbal labor contract.

BY LOCAL LAWS AND REGULATIONS, THERE ARE TYPES OF LABOR CONTRACTS

TYPESDESCRIPTIONCONDITIONSREMARK
Indefinite-term labor contractThe two parties do not determine the duration and the time of termination of the contract.
Definite-term labor contractThe two parties determine the duration and the time of the contract within a period of 12 months.When a labor contract expires and the employee continues working, if no new labor contract is entered into, the contract will become an
Indefinite-term labor contract.
After the new contract, only 1 additional definite-term labor contract may be signed; the third new contract must be entered into Indefinite.
The two parties determine the duration and the time of the contract within a period of 24 months.When a labor contract expires and the employee continues working, if no new labor contract is entered into, the contract will become an
Indefinite-term labor contract.
After the new contract, only 1 additional definite-term labor contract may be signed; the third new contract must be entered into Indefinite.
The two parties determine the duration and the time of the contract within a period of 36 months.When a labor contract expires and the employee continues working, if no new labor contract is entered into, the contract will become an
Indefinite-term labor contract.
After the new contract, only 1 additional definite-term labor contract may be signed; the third new contract must be entered into Indefinite.
A seasonal or work-specific labor contractFor only jobs that duration of When a labor contract expires and under 12 months.When a labor contract expires and the employee continues working, if no new labor contract is entered into, the contract will become a definite-term labor contract with a duration of 24 months.After the new contract, only 1 additional definite-term labor contract may be signed; the third new contract must be entered into Indefinite.

BY LOCAL LAWS AND REGULATIONS, THERE ARE CASES OF TERMINATION OF A LABOR CONTRACT

  1. The labor contract expires.
  2. The work started in the labor contract has been completed.
  3. Both parties agree to terminate the labor contract.
  4. The employee fully meets the requirements on the time of payment of social insurance premiums and the age of retirement.
  5. The employee is sentenced to imprisonment or death or is prohibited from performing the job stated in the labor contract under a legally effective judgment or ruling of a court.
  6. The employee dies or is declared by a court to have lost civil act capacity, be missing or dead.
  7. The individual employer dies or is declared by a court to have lost civil act capacity, be missing or dead; the institutional employer terminates the operation.
  8. The employee is dismissed under Labor Code.
  9. The employee unilaterally terminates the labor contract.
  10. the employer lays off the employee due to structural or technological changes or because of economic reasons, merger, consolidation, or division of the enterprise or cooperative.
  11. The employer unilaterally terminates the labor contract because of reasons:  The worker often fails to perform his/her job stated in the labor contract | The worker is sick or has an accident and remains unable to work after having received treatment for 12 consecutive months, in case he/she works under an indefinite-term labor contract, or for 6 consecutive months, in case he/she works under a definite-term labor contract, or more than half the term of the labor contract, in case he/she works under a labor contract for a seasonal job or a specific job of under 12 months | If, as a result of natural disaster, fire or other force majeure event as prescribed by law, the employer, though having applied every remedial measure, has to scale down production and cut jobs;

When unilaterally terminating a labor contract, the employer shall notify the employee in advance:

  1. At least 45 days, for indefinite-term labor contracts.
  2. At least 30 days, for definite-term labor contracts.
  3. At least 3 working days, for seasonal or work-specific labor contracts of under 12 months.

In which, case N0 03 and 09 is the most safety for the employer. As the employer, you shall be very careful in unilaterally terminates the labor contracts. If you fail to comply with the cases by-laws, the employees usually wait for 12 months from the date of termination and ask the Court to obligate you as follow:

  1. Pay for 12 months salary as job loss due to illegal termination.
  2. Pay for at least 02 months of salary as compensation.
  3. Pay for all compulsory insurances.
  4. Recruit again for the same position and income.

VIVA may help you to manage a full package which is all required by local labor laws and regulations, mainly consist of:

  1. Manage labor relations with the employees
  2. Manage labor relations with the Labor Departments
  3. Manage labor relations with the Tax Department.
  4. And with typical tasks that help you free from local compliance procedures: Employees profiles | Labor contracts | Payrolls | Compulsory insurances | Personal income tax | Corporate income tax  | Manage the implementation of labor contracts and relations with your employees | Business records management (Any related transaction shall be proved by lawful original records) | Other compliance procedures required by the Labor Department.

 

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