DECREE

ON LABOUR CONTRACTS MAKING DETAILED PROVISIONS FOR THE IMPLEMENTATION OF THE ORDINANCE ON LABOUR CONTRACTS

THE COUNCIL OF MINISTERS

Pursuant to the Law on the Organization of the Council of Ministers dated 4 July 1981;
Pursuant to the Ordinance on Labour Contracts dated 30 August 1990;
On the recommendation of the Minister of Labour War Invalids and Social Affairs.

DECREES

Chapter I.

GENERAL PROVISIONS

Article 1.

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(a) Employees working in State run economic units, State defense enterprises, and economic units of the people's armed forces, excluding persons who have been appointed to positions in the State public service;

(b) Employees in non-State economic units, private businesses, or family owned businesses;

(c) Employees working in Government offices at the central level, at the level of the provinces or district, and at equivalent levels, excluding persons who have been appointed to positions in the State public service;

(d) Vietnamese employees working for foreign individuals, organizations, and establishments located in Vietnam, excluding enterprises with foreign capital to which the provisions of Decree 233-HDBT of the Council of Ministers dated 22 June 1990 apply.

2. A labour contract shall not apply to the following:

(a) Persons who have been appointed to the State public service pursuant to the provisions of Decree 169-HDBT of the Council of Ministers dated 25 May 1991;

(b) Persons who have been appointed as directors, chief accountants, and other persons employed in State run economic units, and who receive salaries from State funds (for example, public health workers and teachers);

(c) Persons belonging to the people's armed forces: standing army, police, security forces; persons working in occupations or special locations under the control of the Ministry of National Defense, the Ministry of Interior, with the approval of the Ministry of Labour War Invalids and Social Affairs;

(d) Persons working in Party organizations, public communities, and social organizations pursuant to separate regulations.

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The labour contract shall include the following essential matters in accordance with the provisions contained in article 5 of the Ordinance:

1. All terms required by the laws on working hours and breaks; occupational safety and hygiene; social insurance.

2. All terms mutually agreed upon including:

- Specification of the job, the level of expertise and the level of technology required for the job;

- Wages or salaries adequate for the specific type of job;

- Date of commencement, duration of any trial period, and duration of the labour contract (if any);

- Specific location of the job.

3. All other terms mutually agreed upon which are advantageous to the employee.

Article 3.

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1. All labour contracts for indefinite terms, for terms exceeding one year, in respect of workers who are under fifteen (15) years of age, and in respect of workers who perform heavy work, or who work in toxic or dangerous environments, shall be in writing.

2. Labour contracts for specific or seasonal jobs, for a term of less than one year, shall be oral or written.

Article 4.

A labour contract shall be deemed to be void and of no effect in accordance with the provisions contained in article 8 of the Ordinance in the following circumstances and shall be dealt with as follows:

1. Where one party to the labour contract does not have the requisite legal capacity such as the mentally ill, persons evading the law, persons sentenced to jail, or prevented by the Court from carrying on the same business, persons under the age of fifteen (15) years without the consent of his or her father, mother, or legal guardians, and in the other circumstances referred to in clause 1 of article 8 of the Ordinance.

2. Where labour inspectors have concluded that a labour contract is totally void and that a labour contract shall have to be terminated.

3. Where labour inspectors have concluded a labour contract is partly invalid, both parties are required to agree on the amendment of those parts of the labour contract which are invalid.

4. A labour contract shall be deemed to be void as from the date of signing.

Chapter II.

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Article 5.

The responsibilities of each party when entering into a labour contract shall be as follows:

1. An employee shall express his desire to work either orally or by way of written application supported by a labour book (if any).

2. An employer shall notify an employee of the requirements of the job in relation to health, skills, wages, occupational safety and hygiene conditions, internal labour regulations, and any other rights which the employee is entitled to.

Article 6.

The procedure for entering into a labour contract in accordance with the provisions of article 9 of the Ordinance is stipulated as follow:

1. A labour contract shall be signed directly between the employer or person with authority and the employee or representative of a group of employees who must be accompanied by documents stating the name, age, home address, occupation, and signature of each employee. In the case of a labour contract which is agreed to orally, the employer must reach an agreement directly with each employee.

2. An employee may be party to more than one labour contract with more than one employer provided that he is able to perform fully all labour contracts to which he is a party.

Article 7.

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1. An indefinite term labour contract is a contract which does not have terms previously agreed upon and can be terminated at any time in accordance with the provisions of the law.

2. A definite term labour contract is a contract for a term which is in excess of one year and stated in the contract.

3. A labour contract for a specific or seasonal job is a contract for a term which is less than one year.

Article 8.

The contracting parties to a labour contract in accordance with the provisions of article 12 of the Ordinance are stipulated as follows:

1. The employer must be the head or the legal representative of a corporation or the owner of a business in an economic sector.

If the employer is a family or an individual, the employer must have legal residency and be capable of ensuring the salaries and other working conditions of employees.

2. An employee shall be a Vietnamese person over fifteen (15) years of age who is capable of working. If the employee is under fifteen (15) years of age, consent must be obtained from his or her father, mother or legal guardian.

Article 9.

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1. In respect to the duration of a trial period :

(a) For simple jobs, the duration shall not exceed five days.

(b) For complicated jobs which involve management, technology, and business, the duration shall not exceed thirty (30) days.

2. At the end of the trial period the employer must make a report on the results of the trial period. Where the employer fails to make a report, the labour contract shall be deemed to remain effective; if the trial period is agreed upon in a separate contract, that contract shall convert to a labour contract.

3. The salary which shall apply during a trial period shall be at least seventy (70) per cent of the normal level for the job.

Article 10.

A labour contract shall, in accordance with the provisions of article 14 of the Ordinance, be of full force and effect in the following circumstances:

A labour contract shall take effect as from the date of its signing or the date on which both parties agree.

As from the date a labour contract takes effect, an employer has the right to terminate the labour contract if an employee is absent from work, except in special cases. Conversely, if no work is assigned to an employee, wages must still be paid for those days when the employee is not working in accordance with the provisions of article 18 of this Decree.

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In accordance with the provisions of article 15, a labour book is stipulated as follows:

1. A labour book records changes in the work of an employee, is the basic certificate used by the employee for the purpose of obtaining work, and shall be the basis upon which the policies of the labour law regime are determined.

2. A labour book shall be issued to the persons referred to in clause 1 of article 1 of this Decree; it shall not be issued to persons who enter into labour contracts for a specific or seasonal job, or for jobs having a term of less than one year, or oral contracts.

3. Labour books shall be issued and administered nationally by the Ministry of Labour War Invalids and Social Affairs.

Chapter III.

PERFORMANCE OF, TRANSFER OF, SUSPENSION OF, AND TERMINATION OF A LABOUR CONTRACT

Article 12.

In accordance with the provisions of article 18 of the Ordinance, the reasons for the temporary transfer of an employee to another place of work or another job are stipulated as follows:

1. If, due to the requirements of production or business, an employer has to transfer an employee to another place of work or another type of job for more than thirty (30) days in one year (in total), the employer must obtain the consent of the employee. If an employee does not give his consent, the employer must not transfer the employee. If, due to the fault of the employer, an employee has to stop work, the employee is entitled to an allowance in accordance with the stop work provisions referred to in clause 1 of article 18 of this Decree.

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If an employer does not comply with the stop work provisions referred to clauses 1 and 2 of article 12 above, an employee shall have the right to unilaterally terminate the labour contract.

3. If an employer temporarily transfers an employee in accordance with the provisions of clauses 1 and 2 of article 18 of the Ordinance, and the employee does not comply, the employee shall not be entitled to the wages or salary payable during the period of not working, and the employer shall have the right to unilaterally terminate the labour contract.

Article 13.

In accordance with the provisions of clauses 2 and 4 of article 19 of the Ordinance, the performance of a labour contract shall be suspended in the following cases:

1. The employee has to carry out obligations regulated by the law such as : representative duties in the National Assembly and people's committees, jury duties, participation in the organization of elections; giving evidence to a Court; military service; duties as a Party member; duties in emergency situations such as natural disasters and fires.

2. In other circumstances agreed by both parties: the employee requests to undertake studies locally or studies overseas; is required to work for a specified period overseas; requests to take holidays without pay.

In accordance with article 19 of the Ordinance and article 13 of this Decree, in the case of the suspension of the performance of a labour contract, an employee shall have the right to return to his place of work to perform the labour contract agreed upon after the expiry of or during the term of the period of suspension. An employer has the responsibility to arrange for the employee to return to his former job, and, if a different job is assigned to the employee, both parties must enter into a new labour contract; if the employee has to stop work temporarily, he shall be entitled to an allowance in accordance with the stop work provisions referred to in article 18 of this Decree, or to terminate the labour contract in accordance with the provisions of article 22 of the Ordinance.

Article 14.

Where a labour contract is terminated in accordance with the provisions of articles 21, 22 and 24 of the Ordinance on Labour Contracts, the parties must give notice of the termination either in writing or orally within the following time periods:

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2. In the case of definite term labour contracts which are for a term exceeding one year, at least thirty (30) days.

3. In the case of labour contracts for a term exceeding three months but less than one year, at least five days.

4. In the case of labour contracts for a term not exceeding three months, at least one day.

The above notice periods for termination commence from the date of receipt of written notice in relation to labour contracts in writing and from the date of oral notice in relation to oral labour contracts.

Article 15.

In accordance with points (c) and (d) of clause 2 of article 21 of the Ordinance, an employee shall have the right to unilaterally terminate a labour contract before the expiry of the notice period in the following circumstances:

1. The employer mistreats the employee or the employer's conduct offends the dignity and honor of the employee.

2. The employee is unable to continue performing the contract for the following reasons:

(a) The employee, or his or her family has changed the location of his or her place of residence;

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(c) The employee has to nurse a wife, husband, father, mother, or child, as the case may be, who has been ill for three consecutive months.

Article 16.

In accordance with point (a) of clause 1 of article 22 of the Ordinance, an employer shall have the right to unilaterally terminate a labour contract in the following circumstances:

1. Depending on the form of the labour contract, an employee, due to his own fault, has repeatedly, over a period of one to three months, failed to carry out his or her duties in accordance with the terms of the labour contract agreed upon.

2. The employee stops work without proper reasons on three days in one month or on ten (10) days in one year (in total).

Article 17.

In accordance with articles 23 and 25 of the Ordinance, the compensation and benefits to which an employee is entitled upon the termination of the labour contract are stipulated as follows:

1. In cases where both parties agree to the termination of a labour contract in accordance with the provisions of article 23 of the Ordinance, an employee is entitled to the benefits stipulated in the provisions of article 19 of this Decree.

2. In cases where an employer terminates the labour contract in breach of the provisions of articles 21, 22, and 23 of the Ordinance, and of article 10 of this Decree, the employer must pay compensation for damages suffered by the employee in the following cases:

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(b) The level of compensation referred to above and in clause 1 of article 25 of the Ordinance shall be calculated according to the level of wages (salary) and wage allowances (if any) in force at the time of the termination of the labour contract or prior to the employee becoming ill or injured.

Article 18.

In accordance with clause 2 of article 25 of the Ordinance, the stop work allowance is stipulated as follows:

1. Where the work stoppage is due to the fault of an employer, the employer must pay a stop work allowance in a sum equal to the wages (salary) and wage allowances received by the employee just prior to the work stoppage.

2. Where the work stoppage is due to a natural disaster, fire, sudden stoppage of business operations, the implementation of preventive measures and occupational safety controls, or industrial accident, the employee shall be entitled to a stop work allowance in a sum equal to at least seventy (70) per cent of the wages (salary) and wage allowances received by the employee just prior to the work stoppage.

3. Where the work stoppage is due to the fault of an employee, the employee shall not be entitled to a stop work allowance and must pay for any damage caused to the employer in accordance with a regime for material responsibility stipulated by the State.

Article 19.

In accordance with clause 2 of article 25 of the Ordinance, an employee shall be entitled to a retrenchment allowance or other benefits as follows:

1. In cases where a labour contract is terminated in accordance with the provisions of clause 5 of article 20, points (a), (b), and (c) of clause 2 of article 21, and point (d) and (e) of clause 1 of article 22 of the Ordinance, or of clauses 1 and 2 of article 12, and clause 2 of article 17 of this Decree: the employee shall be entitled to a retrenchment allowance in a sum equal to fifty (50) per cent of the monthly wages (salary) and wage allowances (if any) for every year that he was employed by the employer.

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If the employee is, in the case of a male, forty-five (45) or, in the case of a female, forty (40) years of age or more, and has been working with the employer for five consecutive years or more, the employee shall be entitled to an additional allowance in a sum equal to wages (salary) and wage allowances (if any) for at least two months.

2. In cases where a labour contract for a specific or seasonal job for a term exceeding three months but less than one year is terminated in accordance with the provisions of clause 1 of this article, the employee shall be entitled to an allowance in a sum equal to wages (salary) and wage allowances (if any) for one month.

3. The retrenchment allowance shall be calculated on the basis of the wages (salary) and wage allowances referred to in clause 2 of article 17 of this Decree, and shall be paid in a lump sum directly to the employee. In addition to the calculated allowance, an employee who has been employed for more than one year shall be entitled to an allowance (in respect of boat, coach, luggage, eating expenses) for the return of the employee to his or her place of residence, in accordance with the regime in force.

4. The allowances referred to above shall be paid by the employer from an allowance fund of the entity. The fund shall be established from deductions from the entity's profits. The Ministry of Finance shall co-ordinate with the Ministry of Labour War Invalids and Social Affairs to provide guidance for the establishment and use of the fund.

5. In every case where a labour contract is terminated, the employee shall also be entitled to social insurance benefits in accordance with State regulations.

Article 20.

In accordance with the provisions of article 26 of the Ordinance, the responsibilities of each party upon terminating a labour contract are stipulated as follows:

1. The employer shall return all files and documents, and provide the necessary certificates to the employee at his request; the employer shall settle all entitlements to wages, retrenchment allowance, compensation, or other benefits with the employee (if any).

2. The employee shall return all files, documents, equipment, and facilities used for carrying out the job, and settle all outstanding debts (if any).

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Chapter IV.

RESOLUTION OF LABOUR DISPUTES AND DEALING WITH BREACHES

Article 21.

The entities responsible for the resolution of labour disputes shall include:

1. A labour reconciliation board of the establishment shall have the responsibility of reconciling disputes between the employer and the employee. The members of the board shall consist of equal numbers of representatives of the employer and the executive committee of the trade union (if any) or of the elected labour collective. The number of members on the board shall be in proportion to the number of employees at the establishment. Each party shall appoint representatives to the positions of chairman and secretary of the board at each alternate meeting. The term of office of the reconciliation board shall follow the term of office of the executive committee of the trade union of the establishment.

2. A labour arbitration board shall include:

(a) Labour arbitration boards in provinces and cities under central authority; and labour arbitration boards in districts where it is considered necessary;

(b) Labour arbitration boards at central level.

The labour office at each level shall form and act as chairman of the labour arbitration board at the same level. The members of the arbitration board shall consist of equal numbers of representatives of the labour office, the trade union, and the employer. The roster of members of the arbitration board shall be approved by the people's committee on the recommendation of the labour office at the equivalent level; the board shall nominate a member to be secretary.

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The responsibilities of labour arbitration boards at all levels shall be determined by the Ministry of Labour War Invalids and Social Affairs.

Article 22.

Labour reconciliation boards at all establishments shall be responsible to receive petitions, and to resolve all labour disputes in accordance with the stipulated procedures within fifteen (15) days after receipt of a petition.

Boards shall invite both parties concerned to a meeting to listen to their submissions; and if either one of the parties is not present, in the absence of no proper reasons, the meeting of the board shall still proceed, and if there are proper reasons, the meeting shall be adjourned. In the event that the parties concerned do not consent to the decision reached by the board, each party concerned shall have the right to apply for an appeal within ten (10) days after the date the board issues its decision; the reconciliation board shall have the responsibility of transferring all the files relating to the dispute to an arbitration board at an immediately higher level within five days after receipt of the appeal application.

Article 23.

Labour arbitration boards shall be responsible to conduct the arbitration in accordance with the stipulated procedures, and resolve all labour disputes within thirty (30) days after receipt of the files of a dispute from a labour reconciliation board. In the case of a complicated dispute, the period for resolution can be extended by ten (10) days provided that the decision of the chairman of the labour arbitration board is obtained and sent to the parties concerned.

After inspecting and examining the matter, the labour arbitration board shall reconcile the differences and resolve the dispute directly with both parties concerned. In the event that the parties do not agree with the decision of the arbitration board, they shall have the right to appeal to a labour arbitration body at a higher level.

Article 24.

The decisions of labour arbitration boards and the reconciliation statements of labour reconciliation board of every establishment shall be implemented within ten (10) days after receipt of the decision or statement by the parties. If the decisions are not carried out voluntarily by the parties, the labour dispute shall be referred to a court for judgment (unless the parties concerned have applied for an appeal against the decision of the labour arbitration body at the time).

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PROVISIONS ON IMPLEMENTATION

Article 25.

1. Any labour contract entered into before the coming into force of the Ordinance on Labour Contracts shall be terminated if it is not in accordance with the provisions of the Ordinance in whole or in part, provided that within three months after this Decree becomes effective, the contract is re-entered into, amended, or added to.

2. All employees working for organizations or individuals in economic sectors must enter into a labour contract.

Article 26.

This Decree shall be effective as of the date of its signing. This Decree shall repeal Decree 24-CP dated 13 March 1963, Circular 184-TTg dated 16 July 1974, Decision 217-HDBT dated 14 November 1987, and Decrees 27 and 28-HDBT dated 9 March 1988. Any other official statements of the Council of Ministers which are inconsistent with this Decree are hereby repealed.

Article 27.

The Minister of Labour War Invalids and Social Affairs shall be responsible to guide the implementation of this Decree.

Article 28.

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FOR THE COUNCIL OF MINISTERS
VICE CHAIRMAN




Phan Van Khai