Employment contracts are essential legal documents for both employers and employees in Vietnam. Misunderstanding these agreements can lead to disputes, legal issues, and financial losses. This guide will clarify the key components of labor contracts, including legal requirements, rights, and obligations.

What is an Employment Contract?

According to Article 13 of the 2019 Labor Code:

1. An employment contract is an agreement between a worker and employer about remunerated work, wages, working conditions, and the rights and obligations of each party to the labor relations.
   An agreement between two parties under a different title but with contents reflecting remunerated work, wages, and management, direction, and supervision by one party will be considered to be an employment contract.
2. Before accepting a worker to work, the employer must enter into an employment contract with the worker.

Characteristics of an Employment Contract

A labor contract effectively establishes and maintains a labor relationship. It has several key characteristics:

1. Remunerated Work and Wages: The contract focuses on the exchange of work for payment.
2. Management by Employer: The employee must perform the work personally and be subject to the employer’s management.
3. Specified Period and Location: The contract is executed for a set period and at an agreed location.
4. Legal Limits: Agreements must generally adhere to legal boundaries.

Learn more about Employer Rights & Responsibilities in Vietnam.

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Forms of Employment contracts

Forming a labor contract involves the presentation and commitment to actions each party must carry out. It essentially represents the expression of intent to execute the agreed terms. The formation phase demonstrates the cooperation between parties to establish a labor relationship.

Authority to Form Labor Contracts

Both parties must satisfy legal conditions to form a labor contract. Article 18 of the 2019 Labor Code specifies:

• Employees: Generally, employees must directly enter into the contract, except for certain seasonal or short-term work.
• Employers: The person entering the contract on behalf of the employer must be a legal representative or someone authorized by law.

Classification of Labor Contracts

Labor contracts can be classified based on the method and form of formation:

• Method of Formation:
  • Direct Formation: The employer or their representative negotiates directly with the employee.
  • Indirect Formation: A representative or intermediary negotiates on behalf of either party.
• Form of Formation:
  • Written Contracts: Standard form for most employment agreements.
  • Electronic Contracts: Valid as data messages.
  • Oral Contracts: Applicable for contracts less than one month, with certain exceptions.

Principles of Forming Labor Contracts

The formation process must adhere to several principles:

1. Freedom and Voluntariness: Both parties should freely and voluntarily agree to the terms.
2. Equality: Terms must be agreed upon based on equality.
3. Good Faith and Cooperation: Mutual understanding and honesty are crucial.
4. Legal Compliance: Agreements must not violate the law or social morals.

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NetViet offers comprehensive HR solutions for businesses entering or expanding in the Vietnamese market. Established in 2000, NetViet provides expert, seamless, and compliant HR solutions.

Legal Disclaimer: The information provided is for general informational purposes only and does not constitute legal advice. For specific legal advice on compliance in Vietnam, schedule a consultation with NetViet or consult legal counsel.

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