VIETNAM Law and Practice Contributed by: Ngoc Luong Trinh, Tung Nguyen, Hanh Vo, Esko Cate, Nguyen Dang, Khanh Le, Hoang Nguyen and Truc Ta, VILAF
Managers who breach these duties may be personally or jointly liable for losses, required to return benefits received and liable to compensate the company and, in certain cases, third parties. Members or sharehold - ers, a group of shareholders holding at least 1% of ordinary shares, may bring claims against managers in certain circumstances, including where managers breach their statutory duties or exceed the scope of authority granted under applicable laws or the com - pany’s charter. “Piercing The Corporate Veil” Vietnamese law does not expressly recognise a broad common law-style doctrine of “piercing the corporate veil.” However, Vietnamese law contains specific stat - utory exceptions under which shareholders, members, owners or managers may be subject to personal, joint, civil, administrative or even criminal liability despite the company’s separate legal personality and limited liability. These include, for example, failure to fully and timely contribute committed charter capital, unlawful withdrawal or return of capital or related-party trans - actions conducted without proper approval. As Vietnam’s legal system is principally rooted in the civil law tradition, the legislations governing the employment relationship are primarily codified. The principal source is the 2019 Labour Code (“Labour Code”). Other notable labour-related legislations include: • the 2024 Law on Social Insurance; • the 2025 Law on Employment; • the 2015 Law on Occupational Safety and Hygiene; • the 2024 Law on Trade Unions; • Decree No 145/2020/ND–CP of the Government guiding certain provisions of the 2019 Labour Code; and • Decree No 219/2025/ND–CP of the Government on foreign workers working in Vietnam. Vietnam has recently developed a case-law sys - tem. Certain parts of a court judgment adopted by 4. Employment Law 4.1 Nature of Applicable Regulations Employment Legislations
the Supreme People’s Court as official precedents are binding on Vietnamese courts when adjudicating cases involving similar legal issues. However, to date, there are only a few official precedents in the employ - ment sector. Collective Bargaining Agreements Collective bargaining agreements may be conclud - ed at the level of an enterprise, an industry, multiple enterprises or other forms through a collective bar - gaining process, although in practice they are most commonly concluded at the enterprise or industry level. They typically provide employees with entitle - ments that are more favourable than those set out by law. Although collective bargaining agreements are recognised by law in Vietnam, in practice, they are not especially common. Employment Contracts The employment contract is the principal document establishing the employment relationship and govern - ing its terms and conditions, including the place of work, term/ duration of employment, remuneration, working and rest periods and other obligations such as confidentiality, provided that the terms and condi - tions are not contrary to applicable law and collective bargaining agreements. 4.2 Characteristics of Employment Contracts An employment contract is an agreement between an employee and an employer regarding a paid job, sal - ary, working conditions and the rights and obligations of each party in labour relations. Accordingly, regard - less of how the parties name the agreement between them (eg, collaboration agreement, service contract), such an agreement will still be deemed an employ - ment contract if it provides for paid work, wages and management, direction and supervision by one party. This approach is intended to ensure that employees receive the protections afforded under labour law. In terms of formalities, all employment contracts with a term of one month or more must be made in writ- ing. Employment contracts with a term of less than 1 month can be made verbally, with a few exceptions. Employment contracts made in electronic form in accordance with the law are also considered as being in writing. Vietnam has recently introduced legislation
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