Certain new points on entering into and performing labor contracts

From 1 January 2021, the Labor Code 2019 has officially taken effect. Accordingly, there are many new points compared to the Labor Code 2012 to better suit the reality.

In order to help you and your friends easily grasp these changes, PL & Partners Law Firm will have a series of articles and videos on the highlights of the Labor Code 2019.

First, in this article, let’s learn the new points about entering into and performing the labor contract.

1. SUPPLEMENTING REGULATIONS REGARDING THE DETERMINATION AND IDENTIFICATION OF LABOR CONTRACTS.

In order to stop people from using other names for the Labor Contract to avoid statutory obligations, Article 13 of the Labor Code 2019 stipulates that: In case the parties have an agreement under other names, that agreement shall be considered as a labor contract if there are two basic signs as follows:

These are important signs to distinguish between labor relations and civil relations.

This new regulation is truly a breakthrough and helps increase the identity of the Labor Contract and it also comes from the fact that there have been many cases of “dodging” the law. Employees and employers actually enter into labor contracts, but to avoid having to apply the provisions of the Labor Code on benefits for employees such as social insurance, working hours, health insurance, etc., they have used other names such as service contract, expert contract, etc to name the labor contract.

Thus, at present, in order to identify a labor contract, people are not only based on the form and name of the contract, but it is important to consider the nature of the relationship.

2. THE SEASONAL LABOR CONTRACT NO LONGER EXISTS.

According to the new regulations in Article 20 of the Labor Code 2019, there are only two types of labor contracts:

Thus, from 1 January 2021, there will be no seasonal labor contracts like the previous Labor Code 2012.

3. SUPPLEMENTING ELECTRONIC FORM OF ENTERING INTO LABOR CONTRACTS.

Previously, the Labor Code 2012 only accepted two forms of entering into labor contracts: written or oral labor contracts (Article 16 Labor Code 2012).

But now, Article 14 of the Labor Code 2019 stipulates that: Labor contracts concluded through electronic means in the form of a data message in accordance with the law on electronic transactions shall have the same value as a written labor contract.

Thus, from 1 January 2021, a labor contract signed through electronic means will still have the same validity as a written labor contract.

4. SUPPLEMENTING ACTS THAT EMPLOYERS MUST NOT DO WHEN ENTERING INTO AND IMPLEMENTING THE LABOR CONTRACT WITH EMPLOYEES.

Previously, Article 20 of the Labor Code 2012 stipulated two types of acts that an employer must not do when entering into and performing a labor contract with an employee, including:

In addition to the above two types of behavior, Article 17 of the Labor Code 2019 supplements one more act that the employer is not allowed to do, which is: Forcing the employee to perform the labor contract to pay debt to the employer.

This regulation aims to prevent forced labor.

5. AMENDING REGULATIONS ON PROBATION.

Compared to the Labor Code 2012, the Labor Code 2019 has some new points related to probation.

5.1. Probationary period.

Basically, the Labor Code 2019 inherits the Labor Code 2012 on the regulations relating to probationary period:

• No more than 60 days for positions that require professional and technical qualifications from college or higher;
• No more than 30 days for positions that require a secondary vocational certificate, professional secondary school, positions for technicians, and skilled employees;
• No more than 06 working days for other positions.

However, in addition to the above cases, the Labor Code 2019 adds the following cases: No more than 180 days for the position of enterprise manager in accordance with Enterprise Law, the Law on Management and Use of State Capital Invested in enterprises’ manufacturing.

5.2. Specifying the form of entering into and terminating the probationary period.

According to the Labor Code 2019, the parties can sign a labor contract before the probationary period, in this case the probation agreement is a provision in the labor contract. In addition, the parties can also sign a probation contract first, if the employee passes the probation, the parties will enter into a labor contract later.

6. AMENDING REGULATIONS ON APPENDIX OF LABOR CONTRACT.

The Labor Code 2019 stipulates that the parties are not allowed to amend the term of the contract in an appendix. This regulation aims to protect employees, avoiding the situation in which the employer continually renews the labor contract so they don’t have to sign an indefinite-term labor contract.

7. SUPPLEMENTING CASES OF TERMINATION OF LABOR CONTRACT.

Compared to the Labor Code 2012, the termination of labor contracts in the Labor Code 2019 is more extensive. Specifically, the following cases of termination of labor contracts are supplemented:

– Foreign employees working in Vietnam are expelled according to judgments and decisions of courts or competent authorities;

– The employer who is not an individual has no legal representative, or authorized person to perform the rights and obligations of the legal representative according to a notification by the business registration authority;

– The work permit for foreign employees to work in Vietnam has expired.

The reality of the past time shows that, after a period of operating, certain employers hiring foreign employees fled, resulting in the fact that employees’ rights are not guaranteed, causing many problems related to wages, social insurance as there is no one to carry out the procedures to confirm social insurance for employees, leading to lawsuits and disputes. Therefore, the supplementation on cases of termination of labor contracts as mentioned above well suits the practice.

8. ALLOWING EMPLOYEES TO UNILATERALLY TERMINATE THE LABOR CONTRACT WITHOUT REASON.

Pursuant to Labor Code 2019, employees are entitled to unilaterally terminate the labor contract without reason (no matter what type of labor contract it is) and the employee is only subject to 45-day prior notice for an indefinite-term labor contract and 30-day prior notice for definite-term labor contracts from 12 months to 36 months; 03-working-day prior notice if the contract’s term is less than 12 months.

Some say: this regulation will result in the arbitrariness of employees in terminating the contract and may affect the operating of enterprises, especially in positions where it is difficult to find a replacement. However, the regulation that the employee has the right to unilaterally terminate the labor contract without reason is derived from the employee’s right to freely choose or accept occupation and to avoid forced labor.

9. EXPANDING THE EMPLOYER‘S RIGHT TO TERMINATE THE LABOR CONTRACT.

Labor Code 2019 supplements 03 cases of termination of labor contracts, which are:

– The employee reaches retirement age, unless otherwise agreed;

– The employee voluntarily quits his/her job without a legitimate reason for 05 consecutive working days or more;

– The employee provides dishonest information when entering into labor contracts, affecting the recruitment.

Thus, PL & Partners Law Firm has shared with you some new points related to entering into and implementing the Labor Contract in accordance with the Labor Code 2019.

Hope this information will be useful to you.

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If you have any questions or need further assistance with corporate law in general and labor law in particular, please contact us immediately:

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