Labor Code – the principal legislation governing the labor relations in Vietnam with some main respects below.
1. Probationary Period
The probationary period must not exceed 60 days for posts which require professional and technical qualification of collegial or higher level; 30 days for posts which require professional and technical qualifications of intermediate vocational level, professional secondary level, or for technical workers and skilled employees and no more than 6 working days for other types of jobs.
Satisfaction of the Probationary Jobs
To restrain employers from not signing labor contracts with employees where the probationary jobs are satisfactory, the Labor Code provides that within 3 working days before the expiry of the probationary period, employers must inform employees of the result of probationary jobs and must sign labor contracts with employees if they overcome the period of probation.
The wage for employees during the probationary period must not be less than 85% of the wage of that job.
Employers are encouraged to train and retrain for improving occupational qualifications and skills for its current employees and providing vocational training for other apprentices.
Employee and employer will enter into a vocational training contract for the purpose of vocational qualification, improving employee’s skills or training. In such cases, training expenses will be paid by the employer.
Training expenses include:
- payment for trainers, training materials, training venues, machinery and equipment, practicing materials;
- Support for learners and wages and social insurance and health insurance premiums paid for learners during the training;
- Training expenses also include travel and living expenses during the period of overseas stay in case an employee is sent to a foreign country for training.
Labor contracts can be in verbal or written form. The verbal form is only applicable to the temporary jobs with the period shorter than 3 months. According to Labor Code, employees can work under one of the following three types of contract:
- An indefinite-term labor contract: is the type of contract in which the two parties do not determine the duration and the time of termination of the contract.
- A definite-term labor, a definite-term labor contract: is a contract in which the two parties determine the duration and the time of termination of the contract within a period of between 12 months and 36 months.
- A seasonal or work-specific labor contract: has a duration of under 12 months.
Parties are allowed to choose the appropriate form of contract for their work, but the parties can only sign the contract up to twice for the types of contracts with definite term and it is prohibited to enter into a seasonal or work-specific labor contract of under 12 months for a regular job which has a duration of more than 12 months to protect employees’ rights.
Labor Code just stipulates some fundamental provisions, both parties must put flesh on the bone. Then it will be a crucial basis to resolve disputes arising from work process and limit the parties from unilateral termination of contracts illegally.
A labor contract is commonly terminated when the labor contract is expired; the work stated in the labor contract has been completed; both parties agree to terminate the labor contract; the employee fully meets the requirements on the time of payment of social insurance premiums and the age of retirement; 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; the employee dies or is declared by a court to have lost civil act capacity, be missing or dead, the institutional employer terminates operation; the employee is dismissed.
Employees and employers are able to unilaterally terminate the contract. To do that a party inform the other in accordance with the following period:
|An indefinite-term labor contract||At least 45 days||At least 45 days|
|A definite-term labor||At least 30 days
(At least 03 days when the job is not according to the labor contract; Not being paid in full or on time; Persecution, sexual
harassment, forced labor;
Workers who are sick and accident have been treated for 90 consecutive days or a quarter of the contract period but their working capacity has not been recovered).
|At least 30 days|
|A seasonal or work-specific labor contract that has a duration of under 12 months
||At least 03 days||At least 03 days|
If the parties terminate the contract not falling into the cases of being allowed to unilaterally terminate the contract or violate the notice period, it shall be considered illegal unilateral termination of the contract. As such, the parties shall take responsibilities as follows:
- Employer: Reinstate the employee in accordance with the original labor contract or for new position (in case of running out of working position), pay compensation for wages, social insurance, health insurance and severance allowances.
- Employee: Get no severance allowances, reimbursement of training expenses for employers, compensation for employers of half a month's salary under labor contract and other compensations (if any).
Promulgating and registering an internal labor regulation in writing are mandatory for an employer with 10 or more employees. Before that, the employer must consult with the union and announce the regulations to her employees.
An internal labor regulation must include the following main contents:
- Working time and rest time;
- Order at workplace;
- Occupational safety and hygiene at workplace;
- Protection of assets and technological and business secrets and intellectual property of the employer;
- Employees’ violations of labor discipline, forms of dealing with violations of labor discipline, and material responsibilities.
Employers are not allowed to discipline an employee who has committed a violation which is not defined in the internal labor regulations. As a consequence, employers are always recommended to prepare and register internal labor regulations once they start their businesses.
Together with labor contract, the collective labor agreement is another document which specifies agreements between the employer and her employees upon the working conditions. The collective labor agreement must prescribe working conditions that are more favorable for his employees than those in the law.
The collective labor agreement must be in writing, announce to all employees and notify to the provincial labor management authority.
Labor discipline is one of parts of the internal working regulations. Labor discipline consists regulations on compliance with time requirements, technology and production and business administration. When the employees do not comply or not comply with the above provisions, the employees are considered to be committing an offense.
Depending on the employees’ behavior, employees are applied one of three disciplinary actions as follows:
- Reprimand applicable to a minor breach committed for the first time.
- Prolongation of the wage rise period for no more than 6 months; removal from office. These disciplinary actions may be taken reprimanded in writing but the employee commits another offense (the same or different offense) during 3 following months;
- Dismissal – the most severe disciplinary action applied in cases:
- An employee commits an act of theft, embezzlement, gambling, intentional infliction of injury, use of drugs inside the workplace, disclosure of technological or business secrets or infringement of intellectual property rights of the employer, or acts which cause serious damage or threaten to cause serious damage to the assets or interests of the employer;
- An employee who has been subject to the disciplinary measure of prolonging the wage rise period commits recidivism when the disciplinary record has not yet been written off or an employee who has been subject to the disciplinary measure of removal from office commits recidivism;
Recidivism means that an employee re-commits the same violation for which he/she has been disciplined while his/her disciplinary record has not yet been written off.
- An employee has been absent from work without permission for a total of 5 working days within 1 month or 20 days within 1 year without reasonable reasons.
Reasonable reasons include natural disaster, fire, illness of the employee or his/her next of kin with certification by a competent health establishment and other events defined in the internal working regulations.
The statute of limitations for handling a violation of labor discipline is 6 months from the date the violation is committed. Violation of discipline concerning finance and assets or disclosure of technological or business secrets must be handled within 12 months. Upon expiry, the employer must not impose any form of disciplinary actions.
For an employee who simultaneously commits more than one violation of labor discipline, it is only allowed to apply the highest form of discipline corresponding to the most serious violation.
Statutory insurance is applied to both local and foreign employees. The contribution rates are under prevailing regulations as follows:
- Vietnamese employees:
- Foreign employees
Foreign employees monthly pay 8% of their monthly salary to the retirement and survivorship allowance fund from January 1st, 2022.
Any individual or organization dodging social insurance, the criminal liability shall be applied in accordance with the Criminal Code 2015. A person who is responsible for paying social insurance for his/her workers but fails to pay or pays insufficiently for 06 months or more in specific circumstances despite the fact that he/she has incurred an administrative penalty for those offences shall be liable to a fine of from VND 50,000,000 to VND 200,000,000 or face a penalty of up to 01 year's community sentence or 03 - 12 months' imprisonment.
All companies, whether Vietnamese or foreign, must permit their employees to join a trade union. Disputes between employers and employees should be resolved by means of negotiations between trade union, employees and employers.
Companies are required to contribute 2% of total salary which is used to calculate social insurance contribution into a union fund.