Labor contracts and employee rights are key elements in the recruitment activities of foreign-invested enterprises (FDI enterprises). Through this article, DNP Viet Nam Law Firm aims to assist both employers and employees in understanding the relevant legal regulations on this matter.
I. Guidance on Labor Contracts in FDI Enterprises
1.1 Applicable Types of Labor Contracts
Legal basis: Article 20 of the Labor Code 2019
A labor contract must be concluded in one of the following forms:
- Indefinite-term labor contract, which is a contract in which the two parties do not specify the term and the time of termination of the contract;
- Definite-term labor contract, which is a contract in which the two parties determine the term and the time of termination of the contract within a period not exceeding 36 months from the effective date of the contract.
1.2 Contents of a Labor Contract
Legal basis: Article 21 of the Labor Code 2019
A labor contract must contain the following essential details:
- Training, professional development, and skill enhancement.
- Name and address of the employer and full name and title of the person signing the contract on behalf of the employer;
- Full name, date of birth, gender, residential address, ID card/Citizen Identification number, or passport number of the employee;
- Job description and workplace;
- Term of the labor contract;
- Salary based on the job or position, method and timing of payment, allowances, and other supplementary payments;
- Promotion and salary increase regimes;
- Working hours and rest periods;
- Provision of personal protective equipment (PPE);
- Social insurance, health insurance, and unemployment insurance;
II. Notes on Labor Contracts with Foreign Employees
2.1 What is a Labor Contract for Foreign Employees?
According to Article 13 of the Labor Code 2019, a labor contract is an agreement between an employee and an employer regarding paid work, rights, and obligations of each party.
In the case of foreign employees, the contract remains essentially similar but is concluded with individuals holding foreign nationality.
2.2 Conditions for Foreign Employees to Enter into Labor Contracts in Vietnam
According to Article 151 of the Labor Code 2019, foreign workers must meet the following conditions to be employed in Vietnam:
- Be at least 18 years old and fully capable of civil acts;
- Possess appropriate qualifications, skills, work experience, and be in good health;
- Not be under criminal prosecution or have a criminal record not yet expunged in Vietnam or abroad;
- Hold a valid work permit, except in cases exempted under Article 154 of the Labor Code 2019;
- Comply with Vietnamese labor laws unless otherwise stipulated by international treaties.
2.3 Duration of Labor Contracts for Foreign Employees
According to Clause 2, Article 151 of the Labor Code 2019:
- The contract term must not exceed the validity of the work permit;
- Multiple definite-term labor contracts may be signed.
According to Article 10 of Decree No. 152/2020/ND-CP:
- Work permits are issued based on the term of the labor contract or the duration of the assignment in Vietnam;
- The maximum duration of a work permit is 2 years; therefore, the labor contract must not exceed this term.
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III. Basic Rights of Employees in FDI Enterprises
Employees have the following rights:
- To work, freely choose jobs, workplaces, undergo vocational training, improve professional qualifications; to be protected against discrimination, forced labor, and sexual harassment in the workplace;
- To receive remuneration appropriate to their skills and qualifications as agreed; to ensure occupational safety and hygiene; to take paid leave, annual leave, and receive collective welfare benefits;
- To form and join employee representative organizations or professional associations; to engage in dialogue, collective bargaining, consultation, and workplace management to protect their interests;
- To refuse to work in case of clear threats that may directly endanger their life or health during the working process.
(Refer to Clause 1, Article 5 of the Labor Code 2019 for further details.)
IV. Key Considerations for Employees and FDI Enterprises
To best protect the rights of employees in foreign-invested enterprises (FDI enterprises), both employees and employers are encouraged to proactively implement the following:
| For Employees | For FDI Enterprises |
| Understand and properly fulfill their rights and obligations under the labor contract and applicable laws | Strictly comply with Vietnam’s labor laws, social insurance regulations, and occupational safety standards |
| Join trade unions to receive support and protection in the event of labor disputes | Proactively build a positive working environment that respects and ensures employees’ lawful rights |
| Request the employer to fully implement commitments on salary, bonuses, insurance, and safe working conditions | Respect employees’ rights to join trade unions and ensure that any strikes (if any) follow legal procedures |
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