Socialist Republic of Vietnam

DECREE ON IMPLEMENTATION OF A NUMBER OF ARTICLES OF THE LABOUR CODE WITH RESPECT TO LABOUR CONTRACTS

(No. 198-CP, Hanoi, 31 December 1994)

The Government

Pursuant to the Law on the Organization of the Government dated 30 September 1992;

Pursuant to the Labour Code dated 23 June 1994;

Following the proposal of the Minister of Labour, War Invalids and Social Affairs;

Decrees:


CHAPTER I

Parties to Labour Contracts and Scope of Application

Article 1

1. The following individuals and organizations employing labour must enter into labour contracts:

(a) State owned enterprises, private enterprises, shareholding companies, limited liability companies, co-operatives (having employees who are not members of the co-operative), individuals and families employing labour;

(b) Administrative bodies, professional bodies, mass organizations of the people, political and social organizations employing labour other than State employees and officials;
(c) Economic organizations belonging to units of the people's armed forces and public security employing labour other than officers, non-commissioned officers, and soldiers;

(d) Enterprises with foreign owned capital established in accordance with the Law on Foreign Investment in Vietnam; enterprises in export processing zones and industrial zones; foreign individuals, organizations and establishments, and international organizations operating in Vietnam;

(e) Vietnamese enterprises, organizations, and individuals employing foreign employees in the territory of Vietnam, except in cases where international treaties to which the Socialist Republic of Vietnam is a signatory or party otherwise provide;

(f) Organizations and individuals employing retired workers, domestic servants, or State employees and officials in jobs which are not prohibited by the regulations on State employees.

2. Labour contracts, pursuant to article 4 of the Labour Code, shall not apply in the following cases:

(a) State employees and officials working in State administrative and professional bodies;

(b) Persons appointed by the State to the positions of director, deputy director, or chief accountant in State owned enterprises;

(c) Members of the National Assembly, full-time members of people's councils at all levels, persons holding offices on a term by term basis in legislative, executive, and judicial bodies as elected or appointed by the National Assembly or people's councils at all levels;

(d) Officers, non-commissioned officers, and soldiers in units of the people's armed forces and public security;

(e) Persons working in a number of special occupations or locations for the Ministry of National Defence and the Ministry of Interior shall be governed by the separate guidelines of such ministries subject to prior agreement with the Ministry of Labour, War Invalids, and Social Affairs;
(f) Persons belonging to mass organizations of the people, other political and social organizations, and members of co-operatives including employees who work on a full-time basis for the Party cell, trade union or youth union within an enterprise.


CHAPTER II

Form, Content, and Types of Labour Contracts

Article 2

The form, content, and signing of labour contracts as stipulated in articles 28 and 29 of the Labour Code shall be as follows:

C Labour contracts entered into in writing must be in accordance with the model labour contract published and uniformly administered by the Ministry of Labour, War Invalids and Social Affairs.

C Written or oral labour contracts must contain the provisions stipulated in article 29 of the Labour Code.

In cases where an oral labour contract requires a third person as witness, such witness shall be agreed by the parties.

Article 3

The types of labour contracts referred to in article 27 of the Labour Code comprise:

1. An indefinite term labour contract is a contract which does not prescribe a date on which the contract is to be terminated.

Indefinite term labour contracts shall apply to jobs which are regular and have a duration of one or more years.

2. A definite term labour contract of one to three years is a contract with a term of one, two, or three years as specified in the labour contract; this type of contract shall apply to jobs which have a fixed period for completion.

3. A labour contract for a specific or seasonal job with a duration of less than one year shall apply to jobs which are temporary and have a duration of one or more days or months but less than one year, or shall apply for the temporary replacement of an employee who has taken leave of absence due to military obligations or other public duties required by law, pregnancy, temporary detention or imprisonment, or other temporary reasons which suspend the performance of the labour contract entered into between the parties.


CHAPTER III

Signing, Amending, Suspension, and Termination of
Labour Contract

Article 4

Pursuant to articles 30 and 120 of the Labour Code, labour contracts shall be entered into as follows:

1. The labour contract shall be entered into directly between the employee and the employer or may be signed by the employer and an employee who is the duly authorized representative of a group of employees. In cases where the labour contract is signed by a duly authorized representative, a list containing the full name, age, residential address, occupation, and signature of each employee represented must be attached. Such labour contract shall be enforceable and effective as if it were entered into directly with each employee but may only be applied in the following cases: the employer requires labour for a specific task, for seasonal jobs which have a duration of less than one year, or for jobs which have a predictable duration of between one and three years.

2. An employee may enter into one or more labour contracts with one or more employers provided that he is able to perform fully the contracts entered into. In respect of labour contracts entered into by retired persons, by units or individuals employing less than ten (10) employees, or for jobs which have a duration of less than three months, the rights and benefits to which an employee is entitled shall be included in the salaries or wages.

3. In accordance with the provisions of article 120 of the Labour Code, in respect of trades and jobs for which persons under fifteen (15) years of age are permitted to be employed, any labour contract signed must have the written approval of the parents or guardian for it to be valid.

Article 5

The employer and the employee shall agree on a trial period in accordance with article 32 of the Labour Code and the following provisions:

1. The duration of the trial period shall not exceed sixty (60) days in respect of jobs which require specialized or highly technical skills at university level or higher.

2. The duration of the trial period shall not exceed thirty (30) days in respect of jobs which require skills at secondary level and in respect of technical workers and tradespeople.

3. The duration of the trial period shall not exceed six days in respect of other works.

4. Upon expiry of the trial periods referred to in clauses 1, 2, and 3, the employer has the responsibility to notify the results of the trial period to the employee where the employee satisfies all the requirements, or where the employee is not notified and continues to work, then the employee shall be deemed to be officially employed and both parties must then enter into a labour contract.

Article 6

Pursuant to article 33 of the Labour Code, the validity and amendment of the contents of the labour contract shall be provided for as follows:

1. Written labour contracts shall come into effect upon signing or from a date agreed by the parties; oral contracts shall come into effect on the date the employee commences work.

2. If, during the performance of a labour contract, a party requests an amendment of the contents of the contract and the other party refuses, then the labour contract which has already been entered into shall continue to be performed unless both parties agree to its termination in accordance with the provisions of articles 37 and 38 of the Labour Code.

Article 7

Temporary transfer of an employee to a job which is unrelated to his profession as referred to in article 34 of the Labour Code shall be provided for as follows:

1. In cases where the employer faces an unexpected difficulty in his work or his business production activities as a result of natural disasters or fires, application of measures to prevent or overcome work-related accidents or occupational diseases, and power failures or water shortages, or as a result of business production requirements, the employer shall be permitted to transfer temporarily an employee to a job which is unrelated to his or her profession provided that the period is less than sixty (60) days (in total) in any one year. If, during this period, the employee refuses to comply with the decision of the employer, he or she shall not be entitled to payment of wages for any days absent from work as stipulated in clause 2 of article 62 of the Labour Code and he or she may be disciplined in accordance with article 84 of the Labour Code.

2. In cases where the employer assigns an employee to another job for a period of more than sixty (60) days (in total) in any one year, the employer must obtain the consent of the employee; if the employee refuses and has to cease work as a result of that refusal, the employee shall be entitled to payment of wages in accordance with the provisions of clause 1 article 62 of the Labour Code.

Article 8

Pursuant to article 35 of the Labour Code, the suspension of the performance of a labour contract shall be provided for as follows:

1. In the following circumstances, a labour contract may be suspended by mutual agreement of the parties:

(a) Where the employee wishes to study abroad or locally.

(b) Where the employee wishes to work for a fixed period with a domestic or foreign organization, establishment or individual.

(c) Where the employee is appointed as a full-time official on a board of a State owned enterprise.

(d) Where the employee wishes to take leave of absence without pay for personal reasons.

2. Where the suspension of performance of a labour contract due to the circumstances specified in clauses 1(a) and 1(c) of article 35 of the Labour Code ceases, the employee must present himself or herself at the work place; the employer shall be responsible to assign a job to the employee. Where an employee presents for work on the agreed date but has to wait for work to be assigned to him, the employee shall be entitled to payment of wages in accordance with the provisions of clause 1 of article 62 of the Labour Code.
In cases where an employee fails to present for work without proper reasons for seven days after the date on which the suspension period of the labour contract has ceased, the employee shall be dealt with in accordance with the provisions of clause 1(c) of article 85 of the Labour Code.

3. In cases where an employee is temporarily detained or imprisoned, the labour contract shall, upon the expiry of the temporary suspension, be resolved as follows:

(a) Where the temporary detention or imprisonment is directly related to labour relations:

C At the end of the temporary detention or imprisonment period, or where a court finds that the employee is innocent, the employer must re-employ the employee in his or her former position and must pay the employee the full wages and other entitlements for the duration of the temporary detention or imprisonment period in accordance with the provisions of Decree 197-CP of the Government dated 31 December 1994 stipulating detailed guidelines on the implementation of a number of articles of the Labour Code in respect of wages.

C In cases where the concerned person is a person who has violated the law but who is acquitted or is permitted by the court to carry out his or her former job, then, depending on the nature of the violation, the employer shall assign that person to his or former job or to a new job.

(b) Where the temporary detention or imprisonment of the employee is not related to labour relations, then, at the end of the temporary detention or imprisonment period, the employer must assign the employee to his or her former job or to a new job.

Article 9

An employee who unilaterally terminates a labour contract must pay compensation for costs of training in accordance with clause 3 of article 41 of the Labour Code.

Article 10

A retrenchment allowance shall be paid upon the termination of a labour contract in accordance with article 42 of the Labour Code:

1. Where an employee is entitled to a retrenchment allowance for termination of a labour contract in accordance with the provisions of articles 36, 37, 38, and 41(1) of the Labour Code, the employer is responsible to pay the retrenchment allowance for the period during which the employee has worked for the enterprise, establishment, organization, or individual.

In cases where labour relations are terminated in accordance with the provisions of articles 17(1), 41(2), 85(1)(a) and 85(1)(b), and 145 of the Labour Code, the employee shall not be entitled to a retrenchment allowance.

2. Sources of payment of retrenchment allowances:

(a) In the case of enterprises, retrenchment allowance payments are accounted for as production costs or operating expenses.

(b) In the case of establishments, organizations and individuals not being enterprises, retrenchment allowances must be paid from individually established funds.

3. The period of employment used for the purposes of calculation of retrenchment allowance payments:

(a) The period of employment which is used for the purpose of calculation of retrenchment allowance payments is the total period of employment according to all labour contracts, including any oral labour contract pursuant to which the employee actually worked for the employer.

(b) An employee who was previously a State employee and who is still working for the same unit shall be entitled to a retrenchment allowance calculated on the basis of the total period of employment in that unit.

(c) If an employee of an enterprise, establishment, or organization had previously worked for a period of time in a State unit, that unit shall be responsible to make a retrenchment allowance payment to the employee for the period of the employment. The amount payable shall be transferred by the State unit to the employee following notification by the current place of work. In cases where the State unit has been dissolved or is facing financial difficulties, the retrenchment allowance shall be paid by the State Treasury.

(d) In addition to the period of employment referred to above, any of the following additional periods of employment shall be included in the period of employment with the employer:

C Trial period or apprenticeship period at the enterprise, establishment, or organization (if any);

C Period for improvement of trade or professional skills with the enterprise or organization, or where the employee is sent off for training;

C Leave of absence in accordance with the social insurance regime and holidays in accordance with the provisions of the Labour Code;

C Waiting period following the conclusion of any suspension period of the labour contract, or where the employee has taken paid leave of absence;

C Vocational period or training period with the enterprise;

C Period of suspension of performance of the labour contract agreed by the parties as provided for in article 35 of the Labour Code;

C Period of any wrongful dismissal or wrongful unilateral termination of the labour contract;

C Period of temporary suspension from work of an employee in accordance with the provisions of article 92 of the Labour Code.

4. The wage rate plus allowances (if any) used for the purposes of calculation of the amount of any retrenchment allowance payment shall be in accordance with the provisions of Decree 197-CP of the Government dated 31 December 1994 providing detailed guidelines on a number of articles of the Labour Code in respect of wages.

5. In the case of an uneven number of months, the period of employment shall be calculated as follows:

C For a period of one to less than seven months: six months of employment;

C For a period of seven months to twelve (12) months: one year of employment.

6. An employee shall be paid a retrenchment allowance equal to the amount stipulated in clause 1 of article 42 of the Labour Code. The retrenchment allowance shall be paid directly, in a lump sum, at the place of work, and on time in accordance with the provisions of article 43 of the Labour Code.

Article 11

The responsibilities of each party upon termination of the labour contract shall be in accordance with article 43 of the Labour Code.

The period for payment of any sums due to a party shall be governed by the provisions of article 43 of the Labour Code.

In respect of the following special circumstances:

The retrenchment allowance of an employee who has worked in a number of enterprises shall be regulated by clause 3(c) of article 10 of this Decree; where an enterprise ceases its operations or where one of the parties encounters a natural disaster or fire, the period for payment of any retrenchment allowance, compensation, or debts resulting from the event must not exceed thirty (30) days from the date on which the labour contract is terminated.


CHAPTER IV

Implementing Provisions

Article 12

Any labour contracts signed prior to the Labour Code coming into effect which are inconsistent with the provisions of the Labour Code must be amended and added to accordingly; any terms or conditions which are more favourable to the employee shall continue to be valid. The amendment of and addition to a labour contract must be carried out within six months from the date on which this Decree comes into effect; after such period, any contracts signed prior to 1 January 1995 shall be subject to the provisions of the Labour Code and this Decree.

State employees and officials in full-time positions in State owned enterprises shall enter into indefinite term labour contracts.

Article 13

This Decree shall be of full force and effect as of 1 January 1995 and shall replace Decree 165-HDBT of the Council of Ministers dated 12 May 1992 making detailed provisions for the implementation of the Ordinance on Labour Contracts and other legislation of the Government in relation to labour contracts.

Article 14

Ministers, heads of ministerial equivalent bodies, heads of Government bodies, and chairmen of people's committees in provinces and cities under central authority shall be responsible for the implementation of this Decree.

On behalf of the Government
Prime Minister


VO VAN KIET