VIETNAM Law and Practice Contributed by: Thang Nguyen, Minh Nguyen and Nguyet Le, ACSV Legal
international treaty to which Vietnam is a party states otherwise. The 2019 Labour Code sets out provisions to protect the rights of employees and employers. Its provisions define the nature of the employ - ment relationship and list the permissible claus - es of labour contracts. Labour Contracts A labour contract sets out an agreement between an employee and an employer on a paid job, that details the wage, the working conditions and the rights and obligations of each party. An agree - ment, though agreed by the parties to be named otherwise, still remains a labour contract as long as it has contents demonstrating a paid job with wage, administration, management and/or supervision by a party. Minimum Wage The wage rate of an employee working in the pri - vate sector must not be lower than the minimum wage rate stipulated by the government. There are various regional minimum wage rates which might have to be considered in the investment decision when scouting for ideal locations within Vietnam. The minimum wage rate of a region is linked to the respective cost of living there and the pricing structure of the commercial environ - ment, both of which are under regular review by the government. 4.2 Characteristics of Employment Contracts Under Vietnamese law, there are two types of labour contracts: • definite-term labour contract (term of up to 36 months); and • indefinite-term labour contract (no duration defined).
Labour contracts can only be concluded and terminated in written form, except for a labour contract with a term of less than one month which may be concluded verbally in certain cases. Definite-term contracts (depending on the employed individual) may not be subject to additional limitations. Generally, Vietnamese law is in favour of indefinite-term labour contracts and does not allow employers to renew definite- term labour contracts more than one time with one individual. 4.3 Working Time The regular working time is a maximum of eight hours a day and 48 hours a week. With respect to work requiring contact with dangerous and/ or harmful factors, employers are responsible for applying the work time limits in accordance with national technical regulations and related laws. Employers are entitled to require employees to work overtime under the following conditions: • the employee agrees; and • overtime hours will not exceed 50% of the normal working hours per day, with a maxi - mum of 12 hours per day (normal hours plus overtime), 40 hours of overtime per month and 200 hours of overtime per year. In some special sectors and industries, such as textiles and garments, leather, electronic prod - ucts, aquaculture processing and telecommu - nications, and in extraordinary cases such as a lack of necessary workforce for urgent work, overtime is higher and capped at 300 hours of overtime per year. An employer is required to notify the relevant Department of Home Affairs (DOHA) in writing of the implementation of an overtime policy exceeding 200 hours per year.
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