There are no specific categories of employment status in Vietnam. Rather, the laws of Vietnam only differentiate between an employee who is hired and works for an employer under an employment contract and a contractor/service provider who is hired and works for a service user under a service contract.

Under Vietnam’s Labor Code, employment contracts are classified into the following two types:

1. Indefinite-term (i.e., open-ended) employment contracts; and
2. Definite-term employment contracts with a maximum length of 36 months.

An employment contract must be written unless it is for a term of less than one month. As a matter of prudence, the use of an oral contract should be avoided as it would trigger potential risks when a dispute arises. Under the 2019 Labor Code, which took effect on 1 January 2021, a labor contract may now be concluded by electronic means in the form of a data message (e.g., email) instead of only in hard copy form with wet signatures.

Under the labor laws, a labor contract must include certain compulsory contents such as the job specification, working time and rest time, salary, place of work, term of the contract, social insurance contributions, etc. Apart from these compulsory items, the employer can based on the position of the relevant employee, provide additional items, such as those relating to responsibilities to protect the trade secrets of the employer.

Yes. Part-time employees are afforded the same rights as full-time employees.

No. Employment contracts cannot be assigned.

When a company is transferred as a going concern, and this will affect multiple employees, the employer must develop a labor utilization plan setting out the names and numbers of employees to be retained, retrained for different work, transferred to part-time work, and retrenched. The labor utilization plan must describe the rights and obligations of the employer, the employees and any other relevant parties, as well as specify the financial sources to implement the plan.

Employers must consult with the employees’ representative organization on the labor utilization plan, and announce the plan to all employees within 15 days from its adoption. The employees’ representative organization may agree with or object to the labor utilization plan.

Employees who are retrenched as part of the labor utilization plan are entitled to a job-loss allowance for working periods not subject to unemployment insurance.

Please see the response to "What rights do employees have (to object, to severance), if any, when the company they work for is transferred as a going concern?"

Although employers are permitted to unilaterally terminate employment contracts in certain circumstances (see "Is your jurisdiction an employment-at-will jurisdiction? What are the employer’s termination rights?"), they cannot unilaterally change the terms of employment. By law, amendment/revision of a labor contract requires the consent of the concerned employee. Amendment/revision of a labor contract may be made in the form of a new contract or an appendix to the existing contract.

If employers unilaterally change the terms of employment without their employees’ consent, such changes would be deemed invalid and the employees would have the right to sue the employers before the court or labor mediators.

No. At-will termination of employees by employers is not possible in Vietnam. Termination of employees must be based on statutory grounds and is subject to strict formalistic requirements and procedures.

An employer may unilaterally terminate an employee in the following circumstances:

• The employee repeatedly fails to perform work as required under the labor contract and/or internal labor regulations (ILRs), provided that the criteria/degree of non-performance is provided for by the employer in its regulations (separate regulations or the ILRs).
• The employee is ill or injured and unable to work, despite treatment, for a period of 12 consecutive months in the case of an indefinite-term labor contract, six consecutive months in the case of a definite-term labor contract with a duration of 12 to 36 months, and more than half the duration of the contract in the case of a definite-term labor contract with a duration of less than 12 months.
• The employer is required to reduce the number of jobs due to a force majeure event.
• The employee fails to return to the workplace upon the expiry of the term of suspension of a labor contract, such as due to military service.
• The employee reaches the retirement age.
• The employee fails to attend work without a legitimate reason for at least five consecutive days.
• The employee provides untruthful information at the time of forming the labor contract in a way that affects the employee’s ability to perform the job.

In addition to the “unilateral termination” set out above, an employer who must carry out redundancy due to merger, consolidation, division, or separation, or because of corporate restructuring or change in technology, may terminate an employee after following legally mandated procedures. These include formulating a “labor utilization plan” in consultation with the employees’ representative organization, as well as notifying the labor authority and the affected employees in advance of termination.

Yes. The consequences of unlawful termination of an employee under Vietnamese labor laws are relatively severe as the employer would be required to:

• Re-employ the employee under his/her respective labor contract and pay his/her full salary, social, health and unemployment insurance for all the days the employee would have been working had he/she not been terminated, plus at least two months’ salary under the labor contract as an extra “penalty”;
• If the employee does not wish to return to work, the employer must pay the employee a severance allowance in addition to the compensation prescribed in the first point above;
• If the employer does not wish to re-employ the employee and the employee so agrees, both parties must reach an agreement on extra compensation equal to at least two months’ salary under the labor contract in addition to the compensation prescribed in the first point above and a severance allowance; and
• If there is no vacancy for the position in the labor contract but the employee still wishes to continue working, both parties must negotiate to amend and supplement the labor contract and the employer must still pay the compensation prescribed in the first point above.

In addition to any compensation to be made by the employer under the Labor Code, an unlawful dismissal can be subject to criminal penalties under the Penal Code. Specifically, under the Penal Code, any person acting for his/her personal interests or motives who commits an act of unlawful dismissal of an employee or forcing or threatening an employee to resign, resulting in hardship for the dismissed/resigned employee or his/her family, or a strike, shall be subject to a monetary fine ranging between VND 10,000,000 and VND 100,000,000, and/or non-custodial reform of up to one year, and/or imprisonment for a period between three months and one year.

Where unlawful dismissal affects two or more employees or a female employee who the offender knows is pregnant, or a female employee raising a child under 12 months of age, or the unlawful dismissal results in the suicide of the employee in question, the offender will face a monetary fine ranging between VND 100,000,000 and VND 200,000,000 and/or one to three years’ imprisonment.

In addition, the offender may also be banned from holding certain positions for a period between one and five years.

There is no law provision on protection for whistleblowers.

Yes. The right to privacy and confidentiality of information is a fundamental right recognized by the Constitution of Vietnam. Currently, there is no single comprehensive law governing the collection, storage and use of personal data in Vietnam. Vietnam’s data protection laws are scattered throughout different pieces of legislation. These include the Civil Code, Penal Code, Law on Cyber-Information Security, Law on Cybersecurity, Law on Information Technology, Law on Telecommunications, Law on Consumer Protection, Law on E-Transactions, and various regulations.

In addition to these regulations, the Government has recently released a draft decree on personal data protection, which will tentatively go into effect on 1 December 2021. If passed in its current form, the decree would impose strict obligations on those collecting and processing sensitive personal data including the requirement to obtain explicit consent from the data subject and to register with a Personal Data Protection Committee under the Ministry of Public Security prior to processing or transferring sensitive personal data out of the country.

In respect of non-compliance with the data protection laws, depending on the nature and severity of the violation, the person violating such provisions may be subject to disciplinary actions, administrative sanctions, criminal penalties or civil compensation for damages. In addition to the foregoing, the draft decree on personal data protection includes an administrative sanction of 5% of the total revenue generated in Vietnam applicable to enterprises for a third-time violation.

Yes. By law, discrimination based on race, skin color, nationality, social class, ethnicity, gender, age, pregnancy, marital status, religion, beliefs, political opinions, disability, family responsibility, HIV infection, or trade union/employee organization participation that affects the equality of employment or occupational opportunity is prohibited.

Any act of discrimination would also be subject to an administrative penalty of up to VND 20,000,000. In addition, as a general rule, an employee who is a victim of discrimination may challenge the discriminatory act before a court for compensation for damages.

Yes. There are various leave entitlements, as follows:

• Annual leave: Employees in normal working conditions are entitled to 12 days of annual leave each year, prorated for any part of a year worked. Employees working in heavy, toxic, or dangerous occupations are entitled to 14 to 16 days of annual leave. The employee’s annual leave days will be increased by one day for every five years of employment with the employer.
• Maternity leave: Six months.
• Paternity leave: From 5 to 14 days, depending on the number of children and the circumstances of the birth.
• Sick leave: Employees are entitled to sick leave periods with payment from the social insurance fund ranging from 30 to 180 days per year, depending on the severity of the illness and the number of years social insurance premiums have been paid.
• Other leave: Employees are entitled to 11 public holidays and personal leave (for weddings and funerals) as provided for by the Labor Code.

The law has only a provision on restrictive covenants on the protection of trade and technology secrets, according to which, if the employee is doing work directly related to trade secrets or technical know-how as prescribed by law, the employer is entitled to reach a written agreement with the employee on the contents and term of protection of the trade secrets and technical know-how, the interests, and compensation for the employee’s violations. The parties appear to be free to agree on the geographical scope and duration of the protection.

A non-competition covenant would not be enforceable since under the laws of Vietnam an individual’s right to work is a fundamental right guaranteed and protected by the Constitution and the Labor Code. The Labor Code provides that an employee has the right to work for any employer and at any workplace which is not prohibited by law. It also allows an employee to execute labor contracts with more than one employer, provided that the employee completes/performs all the tasks to which he/she committed. Article 9 of the Law on Work prohibits any act which prevents, causes difficulties for, or damages the legitimate rights and interests of employees. Thus, strictly speaking, a non-competition clause that prohibits an employee from working for another employer after the term of the employment contract would not be in line with the Vietnamese law provisions.

A non-solicitation restrictive covenant may be agreed to by the parties but its enforcement is untested in Vietnam.

No. Refusal to sign a restrictive covenant is not a ground for unilateral termination by the employer. To enforce a restrictive covenant on non-competition, the employer may be required to pay the employee an amount of money in return for his/her upholding the covenant. The chances of enforcing a non-compete agreement would also be improved by setting out these obligations in a contract separate from the labor contract. We are aware of one case where a non-disclosure/non-compete agreement was enforced as a civil contract separate from the labor contract.

Current Vietnamese labor laws require an employer to pay 17.5 percent of each local employee’s salary to the social insurance fund (of which 14 percent of the salary is paid to the retirement and death fund) and deduct from each employee’s salary 8 percent of their salary to contribute to social insurance.

Since 1 December 2018, foreign employees have been required to participate in the short-term social insurance regimes (sickness, maternity, occupational accident and disease), whereby the employer must contribute 3.5% of the employee’s salary. From 1 January 2022, foreign employees will fully participate in social insurance, so in addition to the short-term regime contribution, the employer will be required to contribute another 14 percent of the employee’s salary and the employee will be required to pay a monthly premium of 8 percent of his or her salary to a retirement and death fund.

The employee’s salary for the purposes of social insurance contributions is capped at 20 times the general minimum wage, so is currently capped at VND 32 million (approximately USD 1,400).

Yes. the minimum statutory benefits and strict legal requirements set out by the labor laws that are applicable to matters during recruitment, employment and termination are numerous. Thus, it would not be possible to list all of them in an exhaustive manner. However, the main benefits required by law are as follows.

Statutory leave

Please see our responses above.

Statutory insurance

In addition to the social insurance/retirement insurance mentioned above, employers are required to pay 3 percent and 1 percent of each local employee’s salary and deduct from each employee’s salary 1.5 percent and 1 percent of their salary, as contributions to health insurance and unemployment insurance, respectively.

Bonuses

The law does not require employers to pay bonuses. However, if bonuses are paid, the bonus regime must be discussed with the trade union and publicly announced at the workplace in advance.

Bonuses may be discretionary or non-discretionary, depending upon the language used in the employment contract, bonus policy or other agreement between the employer and employee. Bonuses may be based on the employer’s business results and the employee’s performance.

A “13th-month salary,” though not required by law, is also common in Vietnam, and may be expected by employees in certain sectors.

The retirement age in Vietnam is presently 60 for men and 55 for women. However, these ages will gradually increase so that the retirement age for men will be 62 in 2028 and 60 for women in 2035. Once employees reach the retirement age, employers have the right to unilaterally terminate their labor contracts. However, the parties may agree for the employee to continue working beyond the retirement age, and in this case, the employer may enter into multiple definite-term contacts with the employee, which is an exception to the general rule that employers must enter into an indefinite-term contract after having two definite-term contracts with an employee.

It depends on the type of insurance. For statutory insurance, when the employee is past the retirement age but the employer and the employee agree to continue with his/her employment, the employer must add to the employee’s salary an amount equivalent to what would have been the employer’s statutory contributions to social, health and unemployment insurance.

Regarding extra insurance benefits, the employer and the employee may agree on the cessation of the benefits upon the retirement of the employee.

Response pending

Response pending