The Vietnam Labor Code applies to both Vietnamese and foreigners working in Vietnam. It is unlawful to sign contracts under provisions outside those provided in the Labor Code.
- Labor contract
The parties are free to negotiate and enter into their contracts, provided that those clauses are not less advantageous than the provisions of law. For instance, involving the minimum annual leave, sick leave and maternity, etc.
Contracts must be in Vietnamese. However, if one party is foreigner, contracts shall be bilingual. The Vietnamese version shall be taken with higher priority over the other when any conflict come about.
In Vietnam, labor relationships are governed by the contract agreements between employees and employers.
– Forms of contract:
- Written labor contracts, including the electronic form.
- Oral labor contracts, applied in some specific cases where the term is less than 1 months.
– There are 2 types of labor contracts:
- Indefinite term contract is a contract that both parties do not fix the term nor the time of the termination of the contract.
- Fixed term contract is the contract that both parties decide not only the term but also the time of the termination in the duration of up to 36 months from the date of validity.
Fixed term contract can only get one time extension. If the employer does not intend to extend it, he must make written notice to let the employee be aware of the termination of the labor contract.
- Contents of labor contract:
- The employer’s name, address, full name and position of the person who concludes the contract on the employer’s side.
- Full name, date of birth, gender, residence, identity card number of the employee.
- Job position and workplace.
- Duration of employment contract.
- Salary, form of salary payment.
- Due date for salary payment.
- Promotions and pay rises, working hours.
- Social insurance, health insurance.
The Labor Code allows employers to require workers whose work involves a trade or technology secret to sign a separate agreement on confidentiality and non-disclosure of such secrets. The confidentiality agreement contains a provision for financial penalties, in the event of a breach of contract. It is strictly forbidden for the employer to keep the identity card (citizen identity), diplomas, certificates of the employee and ask the employee to deposit money or property to secure the performance of the labor contract when concluding and performing the labor contract.
The Labor Code does not allow both parties to use annexes to make amendments to certain contents of the labor contract. The contract must be signed by the legal representative of the employer or the person in charged before employment.
- Employment rules
Foreign invested enterprises that have more than 10 employees must have written employment rules, prescribing: working hours, break periods, rules and orders, occupational health, safety and hygiene, protection of assets, technological and business secrets. Normally, employment rules provide the acts detrimental to the assets
and welfare of the employers as grounds for termination of labor contracts.
Contents of the employment rules must be made in consultation with representatives of trade union or representatives of the employees and must be registered at the relevant Department of Labor-Invalids and Social Affairs to come into forced.
- Trade union
Within 6 months after the establishment of the enterprise, the grassroots trade union shall set up the trade union at the enterprise. Both employers and employees must contribute to the fund to support the operation of trade union. Upon establishment, a trade union must have the collective labor agreement. This is the agreement between collective of employees and the employer on working conditions, employment and labor relationship between the parties. The collective labor agreement must be registered at the relevant Department of Labor-Invalids and Social Affairs to come into forced.
- Working hours and rest periods
a) Working hours
According to the Vietnam Labor Code, normal working hours shall not exceed 08 hours per day or 48 hours per week. This clause can be extended by negotiation between the employer and employees. However, working hours shall not exceed 10 hours per day and 48 hours per week.
Overtime
Employees may be asked to work overtime, provided that the employer obtains prior consent from the employees.
The employer must guarantee the number of overtime hours of the employees not exceeding 50% of the normal working hours in 01 day (in case of weekly work, the total normal working hours plus overtime working hours not exceeding 12 hours in 01 day); 40 hours in 01 month and the total overtime working hours not exceeding 200 hours in 01 year, except in some specific cases, as prescribed by the Government, where the overtime working hours shall not exceed 300 hours per year.
Employees who work overtime are entitled to get extra salary. Overtime working salary on normal days is at least 150% of regular salary rate. Overtime working salary on weekly days off is at least 200% of regular salary rate; during paid leave, overtime working salary is at least 300% of regular salary rate. Besides, employees who work at night will be paid an additional amount of at least 30% of the regular salary rate and at least 20% of the day work salary for a normal day, weekend or public holiday.
b) Rest periods
According to Article 137 of the 2019 Labor Code, the employer shall be notified of the maternity of female employees doing highly laborious, toxic or dangerous work that may negatively affect her maternity. Therefore, employer should assign her to a less laborious or safer work or reduce the working hours by 01 hour per day without reducing her salary, rights or benefits until her child reaches 12 months of age.
Pursuant to Article 146 of the 2019 Labor Code, the working hours of employees aged 15 to under 18 shall not exceed 08 hours per day and 40 hours per week. They may work overtime or at night in certain works and jobs listed by the Minister of Labor-Invalids and Social Affairs.
Employees who have been working for 12 months are entitled to fully paid annual leave for 12 days, together with 11 holidays. Employees who work in dangerous and harsh conditions can have extra days off of 2 to 4 days. Moreover, employee usually has 1 extra day off for each year working at the company. Employees can have sick leave, though he/ she may not be paid for the leave. Social insurance plans pay sickness allowance to both employees and female employees taking care of their sick children. Sick leave period is 60 days per year in maximum (applying to most occupations and depending on the time the employee has paid social insurance), leave period for taking care of sick offspring is 15 – 20 days (depending on the age of the child). Salary replacement allowance is equal to 75% of actual salary.
- Employing foreigners
Foreign employees working in Vietnam must have a work permit or a certificate of work permit exemption in order to work in Vietnam. Overall, work permit or certificate of work permit exemption will be issued to foreigners who are the manager or experts directly in charge of the enterprise in Vietnam and with clear criminal records. Work permit and certificate of work permit exemption will have a maximum term of 2 years. After that, they can be extended depending on whether the employer fulfills the conditions of the law.