Can the company engage a 6-month labor contract with the employee?

According to Article 20.1 of the Labor Code 2019 (effective from 01 January 2021) stipulates:

1. Labor contracts shall be entered into in one of the following types:

  1. a) An indefinite-term labor contract is a contract in which the two parties do not determine the term and the time of termination of the contract’s validity;
  2. b) A definite-term labor contract is a contract in which the two parties determine the term and the time of termination of the contract’s validity within 36 months from the effective date of the contract.”

According to this regulation, now there are only two types of contract: (i) contract of indefinite-term and (ii) definite-term contract with a period not exceeding 36 months from the effective date of the contract. The Labor Code 2019 no longer stipulates the type of seasonal labor contract or a job with a term of less than 12 months as well as cases in which seasonal labor contracts cannot be signed.

Based on the Labor Code 2019, it is not clear how long the minimum term for a definite-term labor contract is. Therefore, the employer and the employee can sign a labor contract with a contract term of 6 months.

In addition, Clause 1, Article 13 of the Labor Code 2019 stipulates: “1. Labor contract is an agreement between an employee and an employer on paid wages and salaries, working conditions, rights and obligations of each party in the labor relationship.

In case the two parties agree by a different name but with contents showing paid wages and salaries and the management, administration and supervision of a party, it shall be considered as a labor contract.”

Employees and employers can freely agree with each other on paid wages and salaries, working conditions, rights and obligations of each party in the labor relationship. Thus, the employee and the employer can agree on the terms of the labor contract when signing a definite-term contract.

However, in the case of signing a definite-term labor contract in general and a 6-month labor contract in particular, the employer and employee should note that:

Firstly, within 30 days from the expiry date of the labor contract, the two parties must sign a new labor contract. During the duration when a new labor contract has not been signed, the rights, obligations and interests of the two parties shall be fulfilled in accordance with the signed contract.

Secondly, if after 30 days from the expiry date of the labor contract, the two parties do not sign a new labor contract, this contract will become an indefinite-term labor contract.

Thirdly, in the event that the two parties sign a new labor contract, which is a definite-term labor contract, this labor contract can only be signed once more. After that, if the employee continues to work, he/she must sign another indefinite-term labor contract.

Note: The content presented above is for reference only. The aforementioned content may no longer be relevant depending on the time and audience. For any detailed consultation requests, please contact us via email: phieu.le@lmp-lawyers.com

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