Labor contracts include two types: (i) indefinite term labor contracts; and (ii) definite term labor contracts with a duration not exceeding 36 months.

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Question: How many type of labor contracts are there in Viet Nam as stipulated in the 2019 Labor Code?

Answer: The National Assembly of Viet Nam adopted the Labor Code No. 45/2019/QH14 ("New Labor Code") on November 20, 2019. The document shall take effect from January 1, 2021.

Earlier, the Labor Code 2012 stipulates 3 types of labor contracts, including: (i) indefinite term labor contracts; (ii) definite term labor contracts; and (iii) seasonal or work-specific labor contracts that have a duration of less than 12 months.

The Labor Code 2019 removed the provision of seasonal contracts and labor contracts for jobs with durations of less than 12 months.

Instead, the types of labor contracts have been shortened to only two types: (i) indefinite term labor contracts; and (ii) definite term labor contracts with a duration not exceeding 36 months.

This provision has resolved the aforementioned difficulties and satisfies the needs of short-term and flexible personnel of the enterprises without resorting to the plan of using labor outsourcing services from labor outsourcing providers.

The Labor Code 2019 specified that within 30 days from the expiration date of the labor contracts, the two parties must sign new labor contracts.

In the period of not having entered into the new labor contracts, the rights, obligations, and interests of the two parties are performed under the signed labor contracts. 

The Labor Code 2019 indirectly recognize the term of the labor contracts for foreign employees as being based on their work permits rather than being an indefinite term after 02 definite term labor contracts were entered into and the employers being allowed to enter into the definite-term labor contracts with the foreign employees more than 02 times./.