Vietnam Employment Guide

Understanding Vietnam's Labor Contract Framework

Vietnam's Labor Code 2019, effective from 2021, establishes a clear legal structure for employment relationships. For international HR professionals, navigating these regulations is essential for compliant workforce management. This guide outlines the primary contract types and key requirements under Vietnamese law.

Fixed-Term Labor Contracts

A Fixed-Term Contract (HĐLĐ xác định thời hạn) is valid for a maximum period of 36 months. It can be renewed once; however, after the second renewal, the contract must be converted to an indefinite-term agreement. Termination requires the employer to provide written notice 45 days in advance for contracts longer than 12 months, or 30 days for shorter contracts. This contract type is ideal for project-based roles or seasonal employment needs, offering flexibility for specific business cycles.

Indefinite-Term Labor Contracts

An Indefinite-Term Contract (HĐLĐ không xác định thời hạn) has no specified end date, providing job stability. An employee must give 45 days' written notice to resign. Employers can only terminate this contract under specific legal grounds, such as serious misconduct or company restructuring. This is the standard for permanent, long-term positions and is generally prioritized for Vietnamese nationals.

Other Contractual Arrangements

Vietnamese law also accommodates other work arrangements, including seasonal or temporary contracts for under 12 months, part-time agreements, and specific student internship contracts, which must detail training content and cannot exceed 12 months.

Mandatory Contractual Provisions

Every labor contract in Vietnam must clearly stipulate several key elements to be legally valid. For example, a company like SailGlobal ensures all contracts include:

• Full details of the employer and employee.
• A precise description of job duties and workplace location.
• The type and duration of the contract.
• Salary amount, payment method, and frequency.
• Working hours, overtime rules, and leave entitlements.
• Occupational safety measures, particularly for high-risk jobs.
• Responsibilities for Social Insurance and Health Insurance contributions.
• Conditions and procedures for contract modification or termination.

It is prohibited to include clauses that restrict an employee's rights, such as those related to marriage or pregnancy.

Navigating Probationary Periods

The probation period is a standard feature for most written labor contracts. However, contracts shorter than one month cannot include a probation clause. For foreign employees, the probation period must align with the validity of their work permit.

Duration and Compensation

The maximum probation period is 60 days for most positions, extending to 180 days for managerial or highly technical roles that require specific qualifications. This period can only be set once per job role and cannot be extended, even if the employee's position changes. During probation, the salary must be at least 85% of the agreed正式 wage and cannot fall below the regional minimum wage, a common compliance issue flagged in audits.