Tax Alert - New regulations in draft Labor Code 2019

Draft 2 of Labor Code has recently been published by the Government for public inquiry. In comparison with the current Labor Code, the Draft contains some notable points as follows:
  1. Amending definition of “Employees”. Accordingly, employee is defined as a person working for an employer under mutual agreement other than a labor contract as currently prescribed.
  2. Supplementing a new approach to determine a labor contract: An agreement with title other than “labor contract” but having contents of scope of work, salary, management, administration and supervision from one side towards the other shall be considered as a labor contract.
  3. Removing the category of seasonal or work-specific labor contract with term under 12 months and amending the definition of definite-term labor contract as contracts with maximum term not exceeding 36 months (without setting a minimum threshold). An employee can enter into multiple labor contracts with different employers; however, with each employer, the employee is only entitled to conclude 01 labor contract.
  4. Recognizing labor contracts made under the form of data message established in accordance with Law on E-transactions is a type of written labor contract. Verbal labor contract is only applicable to labor contracts with term under 01 month, except for contracts concluded with employees aged under 15 years old and housemaids.
  5. Supplementing regulations that the parties are not allowed to sign annexes for the purpose of amending the term of a labor contract.
  6. Stipulating a probation term of up to 06 months for enterprise managers as defined in Law on Enterprises. The statutory inclusion of probation term in the labor contract (without execution of a separate probation contract) is being taken into consideration.  
  7. Supplementing regulations that change of working place is also considered as assigning employees to perform other works different from the labor contract.
  8. Amending regulations on termination of labor contracts:
  • Removing provisions on the extension of a labor contract for non-specialized trade union official who is in his/her trade union term but his/her labor contract has expired. For employees in the age of retirement, the condition on term of social insurance contribution is removed and simultaneously, the labor contract may not be terminated if otherwise agreed by both parties.
  • Taking into account the option where an employee is allowed to unilaterally terminate the labor contract without any reason but only required to notify in advance within the prescribed time limit. In some special circumstances, it shall not be compulsory for the employees to send advance notice (maltreatment, sexual harassment, coercive labor, employers fail to make salary payment in full or on time, etc.).
  • Specifying the circumstance where an employee regularly fails to complete the works according to the labor contract and has being warned in writing at least twice within 60 days, the employer shall be entitled to unilaterally terminate the labor contract.

See more details of the Draft of labor code 2019 in the files below.


We do trust the above points are notable and sufficient, but should you have any question or need a deeper discussion on this issue, please do not hesitate to contact us.

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Mazars Vietnam_Tax Alert_Draft Labor Code - May 2019 [VIE]
Mazars Vietnam_​Tax Alert_​Draft Labor Code - May 2019 [VIE]
Mazars Vietnam_Tax Alert_Draft Labor Code - May 2019 [ENG]
Mazars Vietnam_​Tax Alert_​Draft Labor Code - May 2019 [ENG]