HR

Must-know things for foreign investors about employment law in Vietnam

Auncon

June 9, 2021

HR

Must-know things for foreign investors about employment law in Vietnam

Auncon

June 9, 2021

Recruitment and compliance with labour terms in Vietnam are huge matters of concern for foreign investors. How to properly and fully comply with the provisions of employment law in Vietnam? What should be paid attention when recruiting labourers in Vietnam?


For labour contracts

Employment law in Vietnam provide that labourers have a probationary period of 1 to 2 months. If a labourer is eligible, he/she will enter into a labour contract with the employer.

The labour contract should clearly state the principal terms of the employment relationship, including: job position, scope of work, work hours and leaves, labour contract term, salary, social insurance particulars and other issues. The employer has the right to sign 02 definite-term labour contracts with the employee, where the contract term may not exceed 36 months. In case the contract is maintained beyond the said time limit, the employee may enter into an indefinite-term contract.

image
Required documents and procedures for registration

The employing company shall declare its employment to the Division/Department of Labour, Invalids and Social Affairs within 30 days from the date of operation commencement.

For a company using more than 10 employees, a Trade Union is usually required to protect the interests of both employees and the employer. The company shall also register its internal labour regulations, disciplines and payroll at the District Administration authority in order to comply with Vietnam’s labour regulations. For those companies with less than 10 employees, it is not required to register the internal labour regulations, but they may select to issue internal labour regulations in writing.

The employing company shall specify benefits entitled to the employees, for examples, gasoline cost, parking fee, telephone charge allowances, and meals. As well, it shall carry out Social Insurance registration for both employees and employer, in accordance with applicable requirements and restrictions stipulated by the government.


Requirements in respect to probationary contract signing

The employee should provide the company with necessary documents when signing a probationary contract.

It is required by laws that a job has only one probationary period not exceeding 60 days, and the probationary salary must be at least 85% of the official salary for the questioned job.


Termination of contract based on the employment law in Vietnam

The labour contract may be terminated under one of the following cases:

  • The labour contract expires and either party decides not to renew the contract        
  • The specific jobs stated in the labour contract have been completed        
  • Two parties actively agree upon the termination of contract        
  • The employee is sentenced to prison, banned from work by the Court, died or declared missing by the Court.        

The employee may unilaterally terminate the labour contract by giving a written notice to the employer, provided that the following requirements are observed:

  • The notice must be served at least 45 days in advance for an indefinite-term contract 
  • The notice must be served at least 30 days in advance for a definite-term contract
  • The notice must be served at least 3 days in advance for a seasonal labour contract

The content of this article is based on the current provisions of employment law in Vietnam. There are a number of matters for enterprises to take into account as pursuant to the Labour Code 2019, which took effect on January 01, 2021. Those enterprises using foreign labourers are allowed to sign labour contracts with a term of two years at maximum. Besides, in response to Covid-19 aftermath, the government issued a resolution to support employers. Enterprises affected by the pandemic, which had paid at least 50% of wages on ceasing work during the period from April to June 2020, would be entitled to unsecured loans from the Vietnam Bank for Social Policies at interest rate of 0% for the maximum term of 12 months to pay out the outstanding salary (the loan principal amount is up to 50% of the regional minimum wage applicable to individual employee as counted for the actual paid period yet not exceeding 3 months, and the payment shall be directly disbursed to the ceased employees) (pursuant to Clause 3, Article 98 of the Labour Code).

In conclusion, if you are still unsure about employment law in Vietnam, you can ask us for our help! Viettonkin is here to assist you and your business anytime.

Related posts

HR

Unlocking Opportunities: A Comprehensive Guide to Talent Acquisition in Vietnam

Table of Contents Insights into the Vietnamese Labor Market and High-Demand Industries Insights from the Vietnamese Labor Market in 2023Dynamic industries with high-demand workforces in VietnamOpportunities ...
Read more
Doing Business

Internal Mobility vs. Foreign Labor: HR Strategies in Vietnam

Table of Contents Internal Mobility: Navigating the Pros and ConsAdvantages of Internal MobilityChallenges of Internal MobilityHiring Foreign Labor Locally: Pros and ConsAdvantages of Hiring Foreign ...
Read more
Doing Business

Internal Mobility Mastery in FDI Enterprises in Vietnam

Table of Contents Navigating Challenges in Internal Mobility for FDI EnterprisesCultural and Language Dynamics in Internal MobilityRegulatory and Legal Complexities of Internal MobilityTalent Retention: A ...
Read more
Doing Business

Hiring Remote Workers: Navigating Vietnam’s Talent Landscape

Table of Contents The Landscape of Remote Work in VietnamGuide to Hiring Remote Workers in VietnamLegal Insights: A Guide to the Legality of Hiring Remote ...
Read more

Download our Latest Ebook about Real Estate and Property!

Real estate holds a pivotal position in the development of a country, not only via the spillover impacts on other economic sectors such as construction, manufacturing, tourism, finance and banking etc. but also affecting the social dynamic by mobilizing the residency and infrastructure system. Foreign direct investment in real estate (RFDI) in Vietnam has a long running history and is unique in that it is largely dominated by the private sector compared to other industries which usually still have a rather large Government involvement. International capital has consistently been selecting real estate as the destination of choice, given that RDI has always been in the top 2 and 3 for volume inflow over the last 10 years, even throughout extremely turbulent periods such as COVID-19, per the General Statistics Office of Vietnam’s (GSO) data. Find out more in this ebook edition.

Tải cuốn ebook mới nhất về nền kinh tế số Việt Nam!

The digital economy of Vietnam has been fueled and accelerated by the global digital trends and the pandemic Covid-19. The movement of digital transformation is underway in every corner of Vietnamese life, strongly influencing the way people do things. Digital economy is the future of the Vietnam economy. Realizing the potential of the digital economy, the Vietnam government has issued policies, guidelines and created legal frameworks to support and further enhance this economy. In this ebook edition, the digital economy is looked at from different angles. Perspectives from the key elements comprising Vietnam digital economy are examined and discovered.

Our Happy Clients