DECREE

Regulations detailing and guiding the implementation of certain provisions of

Labour Code on Employment Contracts

_____________

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the Labour Code dated June 23, 1994;

Law Amending and Supplementing Certain Provisions of the Labour Code dated April 2, 2002;

At the proposal of the Minister of Labor, Invalids and Social Affairs,

DECREE:

Chapter 1:

GENERAL PROVISIONS

Article 1. This Decree stipulates detailed regulations and provides guidance for implementing certain provisions of the Labour Code and the Law Amending and Supplementing Certain Provisions of the Labour Code (hereinafter referred to collectively as the amended and supplemented Labour Code) concerning employment contracts.

Article 2.

1. The following organizations and individuals must enter into employment contracts when using labour:

a) Enterprises established and operating under the State Enterprise Law, the Enterprise Law, and the Law on Foreign Investment in Vietnam;

b) Enterprises of political organizations and political-social organizations;

c) Administrative and public service agencies employing workers who are not state civil servants or public officials;

d) Economic organizations within the People's Army and People's Public Security Forces employing workers who are not officers, non-commissioned officers, or soldiers;

đ) Cooperatives (with workers who are not cooperative members), households, and individuals employing workers;

e) Non-state educational, health, cultural, and sports establishments established pursuant to Decision No. 73/1999/NĐ-CP dated August 19, 1999 of the Government on policies encouraging socialization in education, healthcare, culture, and sports activities;

g) Agencies, organizations, individuals, foreign entities, or international organizations stationed in Vietnam employing Vietnamese workers, except where international treaties to which the Socialist Republic of Vietnam is a party provide otherwise;

h) Vietnamese enterprises, agencies, organizations, and individuals employing foreign workers, except where international treaties to which the Socialist Republic of Vietnam is a party provide otherwise.

2. The cases not subject to employment contracts as provided for in Article 4 of the Labour Code are specified as follows:

a) Persons falling within the scope of application of the Cadres and Civil Servants Ordinance;

b) Deputies to the National Assembly, full-time representatives to People's Councils at all levels, and persons holding positions in the National Assembly, the Government, people's councils at all levels, the People's Courts, and the People's Procuracy elected or appointed by the National Assembly or People's Councils at all levels for a term of office;

c) Persons appointed by competent authorities to hold the position of General Director, Deputy General Director, Director, Deputy Director, or Chief Accountant in state-owned enterprises;

d) Members of the Board of Directors of enterprises;

đ) Persons belonging to political organizations and political-social organizations operating under their respective regulations;

e) Full-time cadres working for the Party, trade unions, and youth organizations in enterprises but not receiving salaries from the enterprise;

g) Cooperative members according to the Cooperative Law without receiving wages or remuneration;

h) Officers, non-commissioned officers, soldiers, professional military personnel, and officials in the People's Army and People's Public Security Forces.

Chapter 2:

FORM, CONTENT, TYPES OF EMPLOYMENT CONTRACTS

Article 3. The form and content of entering into employment contracts as prescribed in Articles 28 and 29 of the Labour Code are specified as follows:

1. Employment contracts shall be concluded in writing, in accordance with the model prescribed by the Ministry of Labour, Invalids and Social Affairs.

2. Employment contracts concluded in writing or orally must ensure the contents prescribed in Article 29 of the amended and supplemented Labour Code.

In the case of oral agreements, if witnesses are required, both parties may agree on this.

Article 4. The application of types of employment contracts as prescribed in Article 27 of the amended and supplemented Labour Code is specified as follows:

1. Indefinite-term employment contracts apply to jobs that cannot be determined in terms of end date or those with a duration exceeding 36 months;

2. Fixed-term employment contracts apply to jobs that can be determined in terms of end date within a period of at least 12 months but not more than 36 months;

3. Seasonal or job-specific employment contracts with a duration of less than 12 months apply to jobs that can be completed within a period of less than 12 months or to temporarily replace workers transferred to other jobs due to disciplinary actions, workers temporarily suspended from performing employment contracts, workers taking leave for other reasons, and contracts with retirees.

4. When the fixed-term or seasonal employment contracts prescribed in Clauses 2 and 3 of this Article expire and the worker continues to work, within 30 days from the expiration date of the contract, both parties must conclude a new employment contract. During the period before concluding a new contract, both parties must comply with the previously concluded contract. If no new contract is concluded within 30 days, the previously concluded contract becomes an indefinite-term employment contract. If a new fixed-term contract is concluded, it can only be extended for a maximum of 36 months; thereafter, if the worker continues to work, an indefinite-term employment contract must be concluded; if not, it will automatically become an indefinite-term employment contract.

Chapter 3:

ENTERING INTO, MODIFYING, SUSPENDING, TERMINATING

LABOR CONTRACTS

Article 5. Entering into employment contracts as prescribed in Articles 30 and 120 of the Labour Code is specified as follows:

1. Employment contracts are directly entered into between workers and employers or may be concluded between employers and legally authorized representatives on behalf of groups of workers. Where contracts are concluded by authorized representatives, they must be accompanied by a list clearly stating the names, ages, permanent addresses, occupations, and signatures of each worker. Such contracts have the same effect as individual contracts and are applicable only in cases where employers need workers to perform specific tasks, seasonal work lasting less than 12 months, or jobs with a determinable end date ranging from 12 to 36 months.

2. Workers may enter into multiple labor contracts with multiple employers if they have the ability to fulfill multiple contracts and must ensure working hours and rest time in accordance with the provisions of the law. For labor contracts signed with retirees or those engaged in work for less than three months, social insurance contributions, health insurance contributions, travel expenses, and annual leave allowances shall be combined into the worker's salary or remuneration.

3. In cases where children under the age of fifteen are employed in occupations and jobs as provided for in Article 120 of the Labor Code, the conclusion of labor contracts must be agreed upon in writing by the child’s parents or legal guardians.

Article 6. The labor utilization plan prescribed in Article 31 of the amended Labor Code is stipulated as follows:

In cases of mergers, consolidations, divisions, spin-offs of enterprises, or transfers of ownership, management rights, or usage rights of enterprise assets without utilizing all existing workers, a labor utilization plan must be established, including the following main contents:

1. The number of workers to continue being employed;

2. The number of workers to be retrained for continued employment;

3. The number of workers to retire;

4. The number of workers whose labor contracts will be terminated;

5. The previous employer and the subsequent employer must assume responsibility for resolving the benefits of the workers, including clearly defining responsibilities for training costs and severance pay for workers whose labor contracts are terminated.

When establishing a labor utilization plan, the grassroots trade union must participate, and when implementing it, notification must be made to the provincial state management agency responsible for labor affairs.

Article 7. The agreement between the employer and the worker regarding the probationary work as stipulated in Article 32 of the Labor Code is regulated as follows:

1. The probation period shall not exceed sixty days for positions requiring a vocational title that requires a college degree or higher.

2. The probation period shall not exceed thirty days for positions requiring a vocational title at the intermediate level, technical workers, or business staff.

3. The probation period shall not exceed six days for other workers.

4. Upon completion of the probation period, the employer must inform the worker of the results of the probation. If the requirements are met, both parties must proceed to sign a labor contract. If the worker continues to work without receiving notice, they are automatically considered to be working on a regular basis.

Article 8. The effectiveness and modification of the content of labor contracts as stipulated in Article 33 of the amended Labor Code is regulated as follows:

1. When signing a labor contract, both parties must agree specifically on the effective date of the labor contract and the start date of work. If the worker begins work immediately after signing the labor contract, the effective date is the signing date. If the worker has already been working for some time before signing the labor contract or a verbal labor contract, the effective date is the start date of work.

2. During the implementation of the labor contract, if one party requests to modify the content of the labor contract, they must notify the other party at least three days in advance. After approval, both parties must amend the contract procedures according to the guidelines of the Ministry of Labor, Invalids, and Social Affairs or sign a new labor contract. During the negotiation period, both parties must still comply with the previously signed contract. If both parties cannot reach an agreement, they must continue to implement the signed labor contract or agree to terminate the labor contract in accordance with Clause 3 of Article 36 of the Labor Code.

Article 9. The temporary transfer of workers to different jobs contrary to their profession as stipulated in Article 34 of the Labor Code is regulated as follows:

1. When the employer encounters sudden difficulties due to disaster relief, fire, epidemic prevention, measures to prevent and mitigate occupational accidents and diseases, power outages, water supply disruptions, or production and business needs, the employer has the right to temporarily transfer workers to different jobs contrary to their profession, but this shall not exceed sixty days (cumulative) in a year. During this period, if workers do not comply with the employer's decision, they may be subject to disciplinary action and will not receive wages for non-work periods as stipulated in Clause 2 of Article 62 of the Labor Code, and depending on the severity of the violation, they will be subject to disciplinary action as stipulated in Article 84 of the amended Labor Code.

2. In cases where the employer temporarily transfers workers to different jobs contrary to their profession for more than sixty days (cumulative) in a year, the consent of the worker is required; if the worker does not agree and must stop working, they will receive wages as stipulated in Clause 1 of Article 62 of the Labor Code.

Article 10. The suspension of labor contract implementation as stipulated in Article 35 of the Labor Code is regulated as follows:

1. At the end of the suspended labor contract period as specified in point a and c of Clause 1 of Article 35 of the Labor Code, the worker must be present at the workplace; the employer has the responsibility to arrange work for the worker. If the worker arrives at the unit to work within the prescribed deadline and must wait for work, they will receive wages as stipulated in Clause 1 of Article 62 of the Labor Code.

If the worker exceeds five working days from the end of the suspended labor contract period without arriving at the workplace without a valid reason, they will be handled according to point c of Clause 1 of Article 85 of the amended Labor Code.

2. Workers who are temporarily detained or imprisoned when the suspended labor contract period ends will be resolved as follows:

a) In the case where criminal detention is directly related to labor relations, when the period of detention expires or when the Court concludes that the worker was wrongfully accused, the employer must rehire them for their previous position, pay full wages, and other benefits during the period of detention according to the provisions of Decree No. 114/2002/NĐ-CP dated December 31, 2002, detailing and guiding the implementation of certain articles of the Labor Code regarding wages.

If the worker is a lawbreaker but the Court grants amnesty, does not impose imprisonment, or does not prohibit them from performing their previous job, the employer shall arrange for them to resume their previous work or assign new tasks depending on the nature and severity of the violation.

b) In cases where criminal detention is not directly related to labor relations, upon expiration of the detention period, the employer shall arrange for the worker to resume their previous work or assign new tasks.

Article 11. Workers employed under fixed-term contracts, seasonal contracts, or specific task contracts with a duration of less than twelve months have the right to unilaterally terminate the contract before its expiration in the circumstances specified in points c and d of Clause 1, Article 37 of the amended Labor Code, which are defined as follows:

1. Being subjected to abuse or forced labor, which means the worker being beaten, humiliated, or compelled to perform work unsuitable for their gender, affecting their health, dignity, and reputation.

2. The worker or their family experiencing genuine difficulties that prevent them from continuing to fulfill the labor contract due to the following reasons:

a) Moving to a different place of permanent residence, making it difficult to travel to work;

b) Being permitted to settle abroad;

c) Needing to take leave to care for a spouse (or partner), parents, including in-laws, who are ill for three months or more;

d) Other difficult family circumstances recognized by the local commune authority preventing the continuation of the labor contract.

Article 12. Employers have the right to unilaterally terminate the labor contract in the circumstances specified in points a and d of Clause 1, Article 38 of the amended Labor Code, which are defined as follows:

1. The worker frequently fails to complete their assigned tasks as stipulated in the labor contract due to subjective factors, resulting in failing to meet the labor quota or assigned tasks, documented or warned in writing at least twice within a month, without subsequent improvement.

The degree of failure to complete tasks is recorded in the labor contract, collective labor agreement, or internal labor regulations of the unit.

2. Other force majeure reasons include situations where the competent state authorities at provincial level or higher require changes or reductions in production and business operations due to enemy threats, epidemics, or other uncontrollable circumstances.

Article 13. Compensation for training costs as provided for in Clause 3, Article 41 of the amended Labor Code is defined as follows:

Workers who unilaterally terminate their labor contract must compensate for training costs according to Clause 4, Article 32 of Decree No. 02/2001/NĐ-CP dated January 9, 2001, detailing the implementation of the Labor Code and the Education Law on vocational training, except in cases where the termination of the labor contract complies with and fully implements the provisions of Article 37 of the amended Labor Code.

Article 14. Termination benefits when ending a labor contract as provided for in Article 42 of the Labor Code are defined as follows:

1. Employers are responsible for paying termination benefits to workers who have worked for at least twelve months as stipulated in Clause 1, Article 42 of the Labor Code in the circumstances of terminating the labor contract as provided for in Article 36 of the Labor Code; Article 37, points a, c, d, and đ of Clause 1, Article 38; Clause 1, Article 41; point c of Clause 1, Article 85 of the amended Labor Code.

In the circumstances of terminating the labor contract as provided for in points a and b of Clause 1, Article 85 and retiring monthly as provided for in Article 145 of the amended Labor Code, workers will not receive termination benefits.

In the circumstances of terminating the labor contract as provided for in Clause 1, Article 17 of the Labor Code and Article 31 of the amended Labor Code, workers will not receive termination benefits as provided for in Clause 1, Article 42, but will receive unemployment benefits as provided for in Clause 1, Article 17 of the Labor Code.

In the circumstances of terminating the labor contract contrary to the law as provided for in Clause 2, Article 41 of the amended Labor Code, which means terminating the contract for reasons not specified in Clause 1 or without prior notice as required in Clauses 2 and 3 of Article 37 of the amended Labor Code, workers will not receive termination benefits.

2. Sources of funds for payment of termination benefits:

a) For enterprises, the cost of paying termination benefits is accounted for in production costs or circulation expenses;

b) For administrative agencies and public institutions funded by the state budget that employ workers under labor contracts, the source of funds for paying termination benefits is allocated from the regular budget of the agency;

c) For other agencies, organizations, units, and individuals employing workers under labor contracts, they themselves bear the cost of paying termination benefits.

3. Duration of service for calculating termination benefits:

a) The duration of service for calculating termination benefits is the total time worked under all concluded labor contracts (including oral contracts) for which the worker actually worked for the employer;

b) Workers who were previously state employees and continue working at the same unit, the duration of service for calculating termination benefits is the total time worked at that unit.

c) In the case where the employee has worked for other units under the state sector before working for a state-owned enterprise but has not yet received severance pay, the enterprise where the employee terminates the labor contract shall be responsible for paying severance pay to the employee in accordance with the provisions of the law. The previous employers shall be responsible for transferring the payment to the enterprise that has paid it, and if the previous unit has ceased operations, the state budget will reimburse it.

In cases where, after mergers, consolidations, divisions, spin-offs, transfers of ownership, management rights, or usage rights of enterprises in accordance with Article 31 of the Labor Code amended and supplemented, the employee terminates the labor contract, the subsequent employer shall be responsible for paying severance pay to the employee including the time the employee worked for the immediate preceding employer.

d) In addition to the aforementioned period, the following periods shall also be counted as working time for the employer:

Probation or internship period (if any) at the enterprise, agency, or organization;

Time when the enterprise, agency, or organization enhances the employee's vocational skills or sends the employee for vocational training;

Time when the employee takes leave under social insurance regulations or rest periods as prescribed by the Labor Code;

Waiting period for work after the expiration of a temporary suspension of the labor contract or when the employee must stop working while receiving wages;

Time spent learning or practicing a trade at the enterprise, agency, or organization;

Period of suspension of the performance of the labor contract agreed upon by both parties;

Time when the employee was wrongfully dismissed due to disciplinary action or unilateral termination of the labor contract;

Time when the employee is temporarily suspended from work as stipulated in Article 92 of the Labor Code.

4. The salary plus any allowances (if applicable) for calculating severance pay shall be implemented according to the provisions of Decree No. 114/2002/ND-CP dated December 31, 2002, of the Government detailing and guiding the implementation of certain articles of the Labor Code on wages.

5. For employees who have worked more than 12 months with fractional months, the working time shall be rounded off as follows:

From one month up to less than six months shall be calculated as six months of work;

From six months up to twelve months shall be calculated as one year of work.

6. Employees shall receive severance pay at the level prescribed in Clause 1, Article 42 of the Labor Code, directly, in one lump sum, at the workplace, and within the time limit prescribed in Article 43 of the Labor Code.

Article 15. The responsibilities of each party when terminating the labor contract are stipulated in Article 43 of the Labor Code:

The deadline for settling amounts related to the benefits of each party shall be carried out in accordance with the provisions of Article 43 of the Labor Code.

For special cases such as paying severance pay to employees who have worked in multiple enterprises as provided in Point c, Clause 3, Article 14 of this Decree; enterprises ceasing operations or either party encountering natural disasters or fires requiring settlement of severance pay, compensation, and other debts, the settlement shall not exceed thirty days from the date of termination of the labor contract.

Article 16. Rights, obligations, and interests recorded in the labor contract declared void as stipulated in Clause 3, Article 29 and Clause 4, Article 166 of the amended and supplemented Labor Code shall be resolved as follows: the contents declared void shall be resolved according to the corresponding provisions in current laws and lawful agreements in collective labor agreements (if any) from the date the labor contract was concluded and became effective.

Chapter 4:

IMPLEMENTING PROVISIONS

Article 17. Labor contracts concluded before the effective date of this Decree, if they contain provisions inconsistent with the amended and supplemented Labor Code, must be revised and supplemented; provisions that are more favorable to employees than those in the amended and supplemented Labor Code shall continue to be enforced until the expiration of the contract's validity period. The revision and supplementation of labor contracts must be completed no later than six months from the date this Decree becomes effective; failure to do so within this period may result in a violation of labor law and could lead to the declaration of the contract as void in accordance with Clause 3, Article 29 and Clause 4, Article 166 of the amended and supplemented Labor Code.

Workers and officials regularly employed in state-owned enterprises shall enter into indefinite-term labor contracts.

Article 18.

1. This Decree shall take effect fifteen days after its publication in the Official Gazette and shall replace Decree No. 198/CP dated December 31, 1994, of the Government detailing and guiding the implementation of certain articles of the Labor Code on labor contracts.

2. The Ministry of Labor - Invalids and Social Affairs, the Ministry of Finance shall guide the implementation of this Decree based on their assigned functions and tasks.

Article 19. Ministers, heads of ministerial-level agencies, heads of agencies under the Government, Chairpersons of provincial and municipal People's Committees directly under the Central Government, relevant agencies, organizations, enterprises, and individuals shall be responsible for implementing this Decree./.