Employment is one of the important factors driving a country’s economic growth. Before starting work, the employee and the employer will enter into an agreement on employment issues called a labor contract. The labor contract, in addition to having legal value, is also binding on the rights and interests of the parties.

1. Overview of labor contract

a. Labor Contract

Pursuant to Clause 1 Article 13 Labor Code 2019, labor contract means:

“Labor contract is an agreement between an employee and an employer on a paid job, salary, working conditions, and the rights and obligations of each party in the labor relations.

A document with a different name is also considered an employment contract if it contains the agreement on the paid job, salary, management and supervision of a party”.

Thus, a labor contract is an agreement between the employee and the employer on issues such as salary, bonuses, social benefits, work regime, rights and obligations of both parties in that labor relationship.

A labor contract can be called by another name, but if there is content about paid employment, salary, and the management, administration, and supervision of one party, it is still essentially a labor contract.

b. Subjects that enter the labor contract

From the definition of the labor contract under Clause 1 Article 13 of the Labor Code, the subjects of the labor contract must include:

Employee is a person who works for an employer under an agreement; is remunerated; and is managed, directed and supervised by the employer[1].

The minimum working age of a worker is 15 years of age, except for cases stipulated in Article 3 Labor Code as the following:

– A person from 15 years of age to less than 18 years of age shall not perform work or work at workplaces as stipulated in Article 147 of Labor Code (attached with List of work, workplaces that harm the physical, mental, and personality development of minors specified in Article 9 Circular 09/2020/TT-BLDTBXH dated 12 November 2020 by Ministry of Labour-Invalids and Social Affairs)

– A person from 13 years of age to less than 15 years of age may only perform light work as regulated in the list issued by the Minister of Labour-Invalids and Social Affairs (listed in Article 8 Circular 09/2020/TT-BLDTBXH).

​- A person who is less than 13 years of age may only perform work relating to the arts and sports provided that such work does not impair their physical, mental and personality development, and the employer must have the consent of specialized labour agency of the Provincial People’s Committee[2].

Employer is an enterprise, agency, organisation, cooperative, household, or individual who hires or employs one or more workers according to an agreement. Where the employer is an individual, that individual must have full capacity for civil acts[3].

Before accepting a worker to work, the employer must enter into an employment contract with the worker.[4]

2. Forms and types of labor contract

a. Forms of labor contract

Under Article 14 Labor Code, labor contracts can be concluded in the following 3 forms:

– In writing: labor contracts shall be made into 02 copies, the employee keeps 01 copy and the employer keeps 01 copy.

– Data message: may be shown in the form of electronic documents, electronic certificates, electronic records, electronic contracts, e-mails, telegrams, telegraphs, facsimiles and other electronic data interchange (EDI) forms according to regulations of law[5].

– In verbal: For contracts with a duration of less than 01 month, the two parties may enter into a verbal employment contract, except in cases including seasonal work, or certain work with a duration of less than 12 months[6], contract with persons who are less than 15 years of age[7] and contract with a domestic worker[8].

b. Types of labor contract:

Pursuant to Clause 1 Article 20 Labor Code, the labor contract must be made into one of the following types:

• An indefinite term employment contract, which is a contract in which the two parties do not specify the term of the contract or the time at which it terminates.
• A definite term employment contract, which is a contract in which the two parties specify the term of the contract and the time at which it terminates, which will be no later than 36 months from when the contract comes into force.

Note: Where the two parties conclude a new employment contract with a definite term, only 01 additional definite-term employment contract may be signed. After that, if the employee continues to work, an indefinite term employment contract must be signed, except in the case of individuals employed as directors of State-Owned Enterprises and other cases stipulated in Clause 1 of Article 149, Clause 2 of Article 151 and Clause 4 of Article 177 of Labor Code.

[1] Clause 1 Article 3 Labor Code

[2] Clause 3 Article 145 Labor Code

[3] Clause 2 Article 3 Labor Code

[4] Clause 2 Article 13 Labor Code

[5] Article 7 Law on Electronic Transaction 2023

[6] Clause 2 Article 8 Labor Code

[7] Point a Clause 1 Article 145 Labor Code

[8] Clause 1 Article 162 Labor Code