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The Labor Code prescribes labor standards, rights, obligations, and responsibilities of employees, employers, employee representative organizations at the grassroots level, and employer representative organizations in labor relations and in relationships directly related to labor relations, as well as state management of labor.
1. Definition of Labor Contract
A labor contract is an agreement between an employee and an employer on paid work, wages, working conditions, and the rights and obligations of each party in the labor relationship. Even if the parties call it by another name, if it involves paid work, wages, and the management, direction, or supervision of one party, it is still regarded as a labor contract.
2. Subjects of Application
The Labor Code applies to:
Employees, apprentices, trainees, and persons working without a formal labor relationship.
Employers.
Foreign workers working in Vietnam.
Other agencies, organizations, and individuals directly related to labor relations.
3. Forms of Labor Contract
A labor contract must be concluded in writing, made in two copies, with each party keeping one.
A labor contract concluded electronically via data messages under the law on electronic transactions has the same validity as a written contract.
The parties may conclude a verbal contract for a term under one month, except in special cases such as contracts with persons under 15 years old, domestic helpers, or groups of seasonal workers.
4. Principles of Contracting
When concluding a labor contract, the parties must observe the principles of:
Voluntariness, equality, goodwill, cooperation, and honesty.
Freedom to contract, provided it does not contravene the law, collective labor agreements, or social ethics.
5. Information Disclosure Obligations
Employers must truthfully provide information on the job, workplace, working conditions, working hours, rest hours, occupational safety and hygiene, wages, payment methods, social insurance, health insurance, unemployment insurance, confidentiality of business secrets and technology, and other matters directly related to contract conclusion requested by the employee.
Employees must truthfully provide their full name, date of birth, gender, residence, educational background, professional skills, health status certification, and other matters directly related to contract conclusion requested by the employer.
6. Prohibited Acts by Employers during Contracting and Performance
Employers must not:
Keep the original personal identification documents, diplomas, or certificates of employees.
Require employees to provide monetary or asset collateral for contract performance.
Force employees to perform work to repay debts to the employer.
7. Authority to Conclude Contracts
Employees sign contracts in person.
For seasonal work or fixed-term work under 12 months, a group of employees aged 18 or over may authorize one member in writing (with a list of names) to sign on their behalf.
On the employer’s side, contracts may be signed by:
The enterprise’s legal representative or an authorized person.
The head or an authorized person of a legal entity.
The representative of a household, cooperative, or non–legal entity organization, or an authorized person.
An individual directly employing labor.
On the employee’s side, contracts may be signed by:
Employees aged 18 or over.
Employees aged 15 to under 18 with written consent of their legal representative.
Persons under 15 through their legal representative.
A legally authorized representative from a group of employees.
Authorized representatives may not delegate the authority further.
8. Multiple Labor Contracts
An employee may enter into multiple contracts with different employers, provided they fully perform each contract’s terms.
Participation in social insurance, health insurance, and unemployment insurance follows relevant insurance laws.
9. Types of Labor Contracts
Indefinite–term contract: No specified end date.
Fixed–term contract: A definite duration not exceeding 36 months from the effective date.
10. Handling Expired Fixed–Term Contracts
If an employee continues to work after a fixed–term contract expires:
Within 30 days of expiration, the parties must sign a new contract. Until then, the old contract’s rights and obligations remain in effect.
If no new contract is signed after 30 days, the expired contract becomes an indefinite–term contract.
The fixed–term contract may be renewed only once. Thereafter, if the employee continues working, an indefinite–term contract must be signed, except in special cases (e.g., state–owned enterprise directors, elderly workers, foreign workers, or union leadership members whose term may extend until the end of their tenure).
11. Content of the Labor Contract
A labor contract must contain the following principal provisions:
The name and address of the employer, and the full name and title of the person signing on the employer’s behalf.
The full name, date of birth, gender, place of residence, and identity document number of the person signing on the employee’s behalf (including work permit number for foreign employees).
The job title and workplace.
The term of the contract.
The wage rate by job or title, form and frequency of payment, salary allowances and other supplements.
The provisions on grade and salary increments.
Working hours and rest periods.
Personal protective equipment to be provided to the employee.
Social insurance, health insurance and unemployment insurance.
Training, retraining, and skills development.
Any written agreement between employer and employee on the duration and scope of protection for trade secrets or technology secrets, and terms for compensation in case of breach.
For employees in agriculture, forestry, fishery, or salt production, certain mandatory provisions may be reduced or replaced by additional agreements on how to handle disruptions caused by natural disasters, fire, or adverse weather.
12. Appendices to the Labor Contract
An appendix to a labor contract is an integral part of the contract and has the same legal effect.
It may elaborate, amend, or supplement specific clauses of the contract, but may not change the contract’s overall term.
If an appendix’s detailed provisions conflict with the main contract, the main contract prevails.
Any amendments or supplements in an appendix must clearly state what is changed and their effective date.
13. Effective Date of the Labor Contract
A labor contract comes into effect on the date both parties sign, unless they agree otherwise or the law provides a different date.
14. Probationary Period
The employer and employee may agree on probation terms in the labor contract or enter into a separate probation contract.
Key terms of a probation contract include the duration of probation and the essential elements of the main labor contract.
Probation does not apply to contracts under one month.
Probation length is agreed based on the job’s nature and complexity, but may not exceed:
-180 days for managerial positions.
-60 days for jobs requiring college-level expertise or higher.
If probation is successful, the employer must proceed with the original contract or sign a new labor contract.
If probation fails, the labor contract or probation contract terminates.
During probation, either party may cancel the probation or labor contract without notice or compensation.
15. Performance of the Labor Contract
The work specified in the contract must be performed by the employee who signed it.
The workplace is as agreed in the contract, unless both parties agree otherwise.
16. Temporary Reassignment to Other Work
In case of sudden difficulty (natural disaster, fire, epidemic, accident, utility failure) or business needs, the employer may temporarily assign the employee to other work for up to 60 cumulative working days per year.
Reassignment beyond 60 days requires the employee’s written consent.
The employer must specify business-need reassignments in its workplace regulations.
The employer must give at least three working days’ notice, state the reassignment period, and provide work suitable to the employee’s health and gender.
The reassigned employee earns the wage for the new job. If that wage is lower, the old wage must be maintained for 30 days; thereafter the new wage must be at least 85% of the old wage and not below the legal minimum.
If the employee refuses reassignment beyond 60 days and must stop work, the employer must pay stoppage wages.
17. Suspension of the Labor Contract
The contract may be suspended for:
Military service or participation in the militia.
Detention or pretrial detention under criminal procedure law.
Enforcement of compulsory education or rehabilitation measures.
Pregnancy or maternity leave as regulated.
Appointment as manager of a wholly state-owned limited liability company.
Assignment to exercise state-owner rights or a company’s investment rights in another enterprise.
Other cases as agreed by both parties.
During suspension, the employee does not receive wages or contract benefits, unless otherwise agreed or provided by law.
Within 15 days after suspension ends, the employee must return to work and the employer must reinstate them, provided the contract term remains in force.
18. Part-Time Work
Part-time work means working fewer hours than normal full-time.
It must be agreed when signing the labor contract.
Part-time employees enjoy equal rights and obligations, non-discrimination, and workplace safety and hygiene.
19. Amendment and Supplementation of the Labor Contract
A party wishing to amend or supplement the contract must notify the other at least three working days in advance of the proposed changes.
If both parties agree, amendments are made by signing an appendix or a new labor contract.
If they cannot agree, the original contract remains in effect.
20. Termination of the Labor Contract
A labor contract terminates upon:
Expiry of its term (except extended terms for employee-representative board members).
Completion of the agreed work.
Mutual agreement of the parties.
Final court judgment sentencing the employee to prison, death penalty, or banning them from the contracted work.
Deportation of a foreign employee.
Death of the employee or declaration of civil incapacity, disappearance, or death by a court.
Death of an individual employer or declaration of incapacity, disappearance, or death by a court; or if a non-individual employer ceases operations or has no legal representative.
Dismissal of the employee for disciplinary reasons.
Unilateral termination by the employee under Article 35.
Unilateral termination by the employer under Article 36.
Layoff under reorganization, technological change, economic reasons (Article 42), or enterprise division/merger (Article 43).
Expiry of a foreign employee’s work permit.
Unsuccessful probation or cancellation of the probation agreement.
21. Right to Unilaterally Terminate the Labor Contract
a. By the Employee
Must give advance notice to the employer:
At least 45 days for an indefinite-term contract.
At least 30 days for a fixed-term contract of 12 to 36 months.
At least 3 working days for a fixed-term contract under 12 months.
For certain specialized occupations (e.g., flight crew, enterprise managers, seafarers): at least 120 days’ notice for an indefinite-term or 12-month-plus contract, or notice equal to one-quarter of the contract term if under 12 months.
No advance notice is required in these cases:
The employee is not assigned the agreed work, workplace, or working conditions (unless a temporary reassignment under Article 29).
The employer fails to pay full wages or pays late (except in force-majeure situations under Article 97.4).
The employee suffers mistreatment, assault, humiliating words or acts, or forced labor.
The employee is sexually harassed at work.
A pregnant female employee must stop work on medical advice due to risks to the fetus (Article 138.1).
The employee reaches statutory retirement age (Article 169), unless otherwise agreed.
The employer provided false information in contract conclusion (Article 16.1) that affects contract performance.
b. By the Employer
May unilaterally terminate in these cases:
The employee repeatedly fails to perform assigned duties, as determined by the employer’s evaluation criteria with input from the employee representative organization.
The employee has been ill or injured and under continuous treatment for 12 months (indefinite-term contract), 6 months (fixed-term contract of 12–36 months), or more than half the contract term (fixed-term under 12 months), and work capacity has not recovered.
Due to natural disasters, fire, dangerous epidemics, war, or a lawful requirement to relocate or downsize production, despite all remediation efforts the employer must reduce its workforce.
The employee fails to return to work after a suspension period.
The employee reaches retirement age, unless otherwise agreed.
The employee abandons work without valid reason for 5 consecutive working days or more.
The employee gave false information at contract conclusion (Article 16.2) affecting recruitment.
Must give advance notice to the employee:
At least 45 days for an indefinite-term contract.
At least 30 days for a fixed-term contract of 12 to 36 months.
At least 3 working days for a fixed-term contract under 12 months and in the case of prolonged illness or injury (point b, Clause 1, Article 36).
For certain specialized occupations, notice periods follow government regulations (as with employees’ unilateral right).
No notice is needed if the employee fails to return after suspension or abandons work without permission.
c. Cases Where the Employer May Not Unilaterally Terminate
An employee undergoing treatment or convalescence for sickness, injury, or occupational disease under a competent medical authority’s directive (except as provided in point b, Clause 1, Article 36).
An employee on annual leave, approved personal leave, or other employer-approved leave.
A female employee who is pregnant, on maternity leave, or nursing a child under 12 months.
22. Withdrawal of Unilateral Termination
Each party may withdraw their unilateral termination notice before the end of the notice period, provided they give written notice and obtain the other party’s consent.
23. Illegal Unilateral Termination
Termination that does not comply with Articles 35, 36, or 37 of the Labor Code is deemed illegal.
24. Obligations upon Illegal Unilateral Termination
a. By the Employee
Forfeits any severance allowance.
Must compensate the employer with half a month’s contractual wage plus an amount equal to the wage for days of no notice.
Must reimburse any training costs.
b. By the Employer
Must reinstate the employee under the original contract, pay wages, and cover social, health, and unemployment insurance for the days the employee was kept from work, plus a sum at least equal to two months’ contractual wage.
If the employee already received severance or job-loss benefits, those must be returned.
If the employer violated the notice period, they must pay wages for the days of no notice.
If the employee does not wish to return, the employer must pay severance allowance.
If the employer does not wish to reinstate but the employee agrees, they must pay the above amounts plus an additional compensation of at least two months’ contractual wage.
25. Responsibilities upon Contract Termination
Within 14 working days of termination, both parties must settle all financial entitlements; this may extend up to 30 days in special cases (e.g., non-individual employers ceasing operations; restructurings; natural disasters).
Wages, social insurance, health insurance, unemployment insurance, severance allowances, and other employee benefits are prioritized if the enterprise or cooperative ceases operations, dissolves, or goes bankrupt.
The employer must complete procedures certifying social and unemployment insurance contributions, return original documents held, and provide copies of all work-related records at the employee’s request (costs borne by the employer).
26. Invalid Labor Contract
Entirely invalid if:
Its entire content violates the law.
The signatory lacked authority or breached voluntariness, equality, goodwill, cooperation, or honesty.
The contracted work is prohibited by law.
Partially invalid if only some provisions violate the law without affecting the rest.
The People’s Court has the authority to declare a labor contract invalid.
27. Handling an Invalid Labor Contract
Partial Invalidity
Rights and obligations follow the applicable collective labor agreement; if none, legal regulations apply.
Parties may amend the invalid portion to comply with law.
If no amendment is agreed, the contract terminates. Entitlements from start of work to termination are settled as above, including severance. Service time counts toward labor benefits.
Entire Invalidity
If invalid due to lack of authority or principle violations: parties must sign a new compliant contract.
Employee’s rights and benefits from the invalid contract’s start until re-signing follow the invalid contract’s terms, provided they meet or exceed legal or collective agreement standards. Service time counts toward benefits.
If no new contract is signed, the contract terminates. Entitlements are settled as above, including severance.
If invalid due to entirely unlawful content or prohibited work: parties must conclude a new valid contract.
Rights and benefits from the invalid contract period until the new contract take effect as with invalidity for lack of authority.
If no new contract is concluded, the contract terminates. Settlements follow the same rules, and the employer must pay the employee an agreed sum—at least one month’s regional minimum wage per year of service—and severance for prior contracts if applicable.
28. Special Labor Contracts
a. Labor Leasing
Labor leasing is when a worker signs a labor contract with a labor‐leasing enterprise, then is assigned to work under the direction of another employer while remaining employed by the leasing enterprise.
Labor leasing is a conditional business sector: the leasing firm must hold a valid labor‐leasing license and may only lease workers for specified jobs.
The lessee (the company using leased labor) may not use leased workers to replace striking employees or those laid off for restructuring, technology changes, or economic reasons, nor may it lease from an unlicensed provider.
The labor‐leasing contract must be in writing and include: workplace location, job description, term, working and rest hours, safety and hygiene conditions, liability for occupational accidents and diseases, and each party’s obligations.
Leased workers’ rights and benefits under the leasing contract must be no less than those they would have under their direct contract with the leasing firm.
Leased workers must be paid at least the same wage as the lessee’s own employees of equal skill level performing equivalent work.
b. Domestic Helpers
A domestic helper is a worker employed regularly by one or more households to perform non‐commercial household tasks (e.g., cooking, housekeeping, child/elder/patient care, driving, gardening).
The contract must be in writing.
Either party may unilaterally terminate the contract at any time with at least 15 days’ notice.
The parties agree on wage form and schedule, daily working hours, and accommodation.
The employer must pay social and health insurance contributions on the helper’s behalf so the helper can enroll in those schemes.
Prohibited employer acts include: mistreatment, sexual harassment, forced labor, use of force, assigning tasks outside the contract, and withholding the helper’s identity documents.
c. Underage Workers
Underage workers are those under 18 years old.
They may only perform work suited to their health, ensuring proper physical, mental, and moral development.
Employers must obtain written consent from a parent or guardian and maintain a separate register for underage workers.
Workers aged 15–17 may not do prohibited jobs or work in hazardous environments that harm their development.
Workers aged 13–14 may perform only light work listed by the Ministry of Labor, Invalids and Social Affairs; such contracts must be in writing with the child’s legal representative.
Children under 13 may only engage in artistic, athletic, or sporting activities that do not harm their development and require approval from the provincial labor authority.
d. Elderly Workers
Elderly workers are those who continue working after reaching retirement age.
They may negotiate shorter daily hours or part‐time arrangements.
They may enter multiple successive fixed‐term contracts.
They must not be assigned to heavy, toxic, or dangerous jobs that jeopardize their health, unless safe working conditions can be ensured.
e. Foreign Workers in Vietnam
Must be at least 18, fully civilly competent, possess required professional qualifications, skills, work experience, and health standards; have no ongoing criminal sentence or prosecution; and hold a valid Vietnamese work permit.
The labor contract’s term cannot exceed the work‐permit validity; parties may agree on multiple successive fixed‐term contracts.
Foreign hires are limited to management, executive, specialist, or technical roles that Vietnamese workers cannot fill.
Employers must justify the need in writing and secure approval from the competent state agency.
Exempt from work‐permit requirements are certain categories (e.g., equity‐owning investors with ≥₫3 billion capital, board chair/members with ≥₫3 billion capital, heads of international NGO offices, short‐term service providers (
A work permit may last up to two years and be renewed once for up to two years.
A work permit becomes invalid upon expiry; contract termination; contract‐permit mismatch; unauthorized work; employer’s charter contract expiry or termination; foreign government recall; employer dissolution; or permit revocation.
29. Other Responsibilities
Severance and job‐loss allowances: Calculation of service time for allowances includes actual work time, probation, employer‐mandated training, paid sick/maternity/occupational accident/disease leave, paid civic duty leave, unpaid work suspensions not due to the employee’s fault, weekly/day‐off and holiday leave, paid leaves, union‐representation duties, and temporary suspensions. From this total, subtract periods covered by unemployment insurance benefits and previous allowance payments. Service time counts in years (partial years ≤6 months count as 0.5 year; >6 months as 1 year). Allowance is based on the average wage of the six months preceding separation.
Occupational safety and hygiene: Employers must implement all measures to ensure workplace safety and hygiene.
The above information provides a comprehensive and detailed overview of labor contracts under Vietnamese law, including general provisions, the rights and obligations of the parties, the types of contracts, and special cases.
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