Vietnam is a Southeast Asian country surrounded by Laos, China, and Cambodia. It has natural resources in phosphates, coal, offshore oil and gas deposits, manganese, timber, and hydropower. It has a population of 96 million people and Vietnamese is the official and most used language, followed by English, some French, and Chinese. Vietnam is not a religious country with almost 82 percent of the population preferring ‘none’. Over the 1950s and 60s, the communist North attacked the anti-communist South, and the United States got involved in what became a disastrous war for all involved. A 1973 cease-fire agreement allowed the American troops to withdraw and brought about a return to communism. The country is known for little to no civil liberties under its communist dictatorship. The personal income tax rate is 35 percent and the corporate tax rate is at 22 percent. Public debt is over 62 percent of the GDP.
In Vietnam, the provisions for permanent employment are outlined under the designation of indefinite employment. It is defined as a permanent employment contract in which the 2 parties do not specify the duration and time at which the contract terminates.
The Labor Code provides specific benefits for employees with an indefinite term contract – they are entitled to long-term sick leave of 12 months and a notice period of 45 days. If a fixed-term contract continues even after its expiry, it is converted to an indefinite-term contract.
Employment contracts must be made in writing, except for contracts with a duration of under 1 month, in which case an oral employment contract may be used. Employment contracts may be concluded electronically on a platform compliant with the E-Transaction Law. They must include the following:
Job description, location, and term
Wages
Working hours, breaks, and holidays
Social and health insurance
Training and skills improvement provided
A copy of the employment contract must be provided to the employee and the employer. The conditions for the probationary period may be included in the employment contract or made into a separate probationary contract.
In Vietnam, temporary or seasonal work is defined as work performed for a duration of under 12 months. There are no extensive stipulations for temporary work within the Labor Code. Signing a seasonal or specific-job employment contract for a term of under 1 year for regular work that lasts 12 months or more is prohibited, except to replace an employee temporarily.
Employers can utilize labor dispatch agencies to hire temporary employees under a contract for a maximum duration of 12 months. Temporary employees cannot be hired to replace another employee during a strike or settlement of labor disputes. Temporary employees cannot be hired at a lower compensation than comparable permanent employees in the user's company.
A probationary period may only be used once per employment contract and is not renewable. Probation is not allowed if the employee works under an employment agreement with a duration of less than 1 month. The duration of probationary period depends on the type of job.
Employees must be paid at least 85% of the agreed salary while on probation. During the probationary period, either party has the right to terminate the concluded probation contract or employment agreement without prior notice and compensation obligation.
The regular working hours cannot exceed 8 hours per day (up to 10 for those on a weekly schedule) and 48 hours per week. The working hours of employees under 15 cannot exceed 4 hours per day and 20 hours per week, and employees from 15 to under 18 cannot exceed 8 hours per day and 40 hours per week, and cannot perform night work or hazardous work. The statutory hours for a workweek may not be above 48 hours, but the state encourages employers to implement a 40-hour workweek. The working hours of employees under 15 cannot exceed 4 per day and 20 per week.
Employees are entitled to fully paid annual leave after 12 months of service with an employer:
12 working days for employees who work in normal working conditions
14 working days for minors and persons working in heavy or dangerous jobs
16 working days for workers doing extremely heavy or hazardous work
Annual leave increases by 1 day for every 5 years of employment with the same employer. Employees who have worked for less than 12 months are entitled to paid leave proportional to the number of months worked.
In the case of employment termination, job loss, or other reasons, an employee who has not used or not entirely taken their annual leave is entitled to receive compensation for the unused leave days. Employees who work during their annual leave are entitled to their normal wages for the work performed and cash compensation for the unused annual leave days, calculated at the employee’s contractual daily wage. This results in a payment equivalent to 200% of the normal daily wage. Overtime during paid leave is paid at a rate of 300% of the normal daily wage.
Annual sick leave (with proof from a doctor) is as follows:
30 days – if contributions to the social insurance fund were made for less than 15 years
40 days – if contributions are between 15 and 30 years
60 days – contributions over 30 years
180 days for extended treatment
For those working in heavy or hazardous occupations, the sick leave duration increases by 10 days for every category.
Sick leave is compensated by the Social Insurance Agency. Sickness allowance is equal to 75% of the employee's wages. There is also a provision of convalescence leave of 5-10 days, and the sickness benefit during this time is 30% of the basic salary. If the sickness continues even after 180 days of extended leave, the benefit is reduced to 65% of the wages for employees who have paid social security contributions for 30 years or more, 55% for employees who have paid for 15-30 years, and 50% for employees who have paid for less than 15 years.
Employees who have paid social insurance premiums for 6 months or more within 12 months before childbirth are entitled to 6 months of paid maternity leave. In the case of multiple births, the mother is entitled to one additional month off for each child from the second child onwards. Maternity leave cannot begin earlier than 2 months before the expected date of delivery.
Employees adopting a child younger than 6 months of age are entitled to take paid maternity leave until the child turns 6 months old. Employees are also entitled to paid leave when they experience miscarriage, abortion, or stillbirth.
An employee can return to work before the end of the maternity leave period with approval from her employer if she has taken at least 4 months' leave.
Male employees who have paid social insurance premiums for at least 6 months in the 12 months preceding childbirth or adoption are entitled to a fully paid paternity leave as follows:
5 days, under normal circumstances.
7 working days when the wife gives birth to a child requiring surgery or gives birth to a child under 32 weeks old
10 working days, in case the wife gives birth to twins, an additional 3 working days for each infant from the third child onward
14 working days when the wife has multiple births and requires surgery
Fathers are also entitled to 6 months of leave in case of adoption if the mother is not eligible for leave.
An employment contract may be terminated at any time by either party by giving written notice to the other party in advance, as follows:
A minimum of 45 days for an indefinite-term employment contract
A minimum of 30 days for a definite-term employment contract with a fixed term of 12-36 months
A minimum of 3 working days for seasonal work employment contracts or for specific tasks with a duration of under 12 months
A party that fails to comply with the notice period provisions is required to pay compensation worth the employee's salary for the remaining notice period from the termination date to the other party. An employee who does not comply with the notice period requirements must pay half a month's salary to the employer.
Employees who have worked at the same company for over 12 months are entitled to a severance payment of half a month's salary for each year worked. In the case of redundancy, 1 month's wage is paid for each year of employment, with a minimum of 2 months’ salary.
Severance benefits are not paid if the employee terminates the contract unilaterally or is dismissed due to misconduct or during probation.
