Employment Contracts in Vietnam: Key Considerations for Employers

An employment contract is more than a document recording an employee’s salary and job title. It provides an important legal basis for determining the rights and obligations of both the employer and the employee throughout the recruitment, employment and termination process.

In practice, many employment disputes arise because the contract does not accurately reflect the actual employment arrangement, omits necessary provisions, or contains terms that are inconsistent with Vietnamese law.

Since 2026, Vietnam has also introduced a more detailed framework for electronic employment contracts, creating additional compliance considerations for businesses digitalising their HR operations.

This article highlights key legal considerations for employers when entering into and managing employment contracts in Vietnam.

1. When Is an Agreement Considered an Employment Contract?

Under Article 13.1 of the 2019 Labor Code, an employment contract is an agreement between an employee and an employer concerning paid work, salary, working conditions, and the rights and obligations of each party.

Importantly, the name of an agreement does not determine its legal nature.

An agreement labelled as a “Service Agreement”, “Collaborator Agreement”, “Consultancy Agreement” or otherwise may still be treated as an employment contract if it involves:

Work being performed;
Remuneration or salary being paid; and
The person performing the work being subject to the management, direction or supervision of the other party.

Vietnamese labour law therefore applies a substance-over-form approach when identifying an employment relationship.

Employers engaging freelancers, consultants or collaborators should review both the contractual terms and the actual working arrangement.

2. When Must an Employment Contract Be Entered Into?

As a general rule, an employer must enter into an employment contract with an employee before the employee commences work.

Employment contracts must generally be made in writing. For contracts with a term of less than one month, the parties may enter into the contract orally, subject to statutory exceptions.

Employers should avoid allowing employees to commence work while employment documentation remains incomplete. This may create uncertainty concerning the commencement date, salary, probation, insurance obligations or termination of employment.

3. What Types of Employment Contracts May Employers Use?

Vietnamese labour law provides two principal categories of employment contracts:

Indefinite-Term Employment Contracts

These contracts do not specify an expiry date.

Fixed-Term Employment Contracts

These contracts specify their duration and expiry date, with a maximum term of 36 months.

The choice of contract type affects matters such as renewal, notice periods and termination rights.

Employers should monitor fixed-term contract expiry dates carefully. Where an employee continues working after expiry, statutory rules may result in the employment relationship being converted into an indefinite-term contract if a new contract is not entered into within the prescribed timeframe.

4. What Should an Employment Contract Include?

An employment contract in Vietnam should include the essential terms required by law, depending on the circumstances, including:

Employer and employee information;
Job position and workplace;
Contract term;
Salary, payment method and additional payments;
Salary increase arrangements;
Working hours and rest periods;
Personal protective equipment;
Social insurance, health insurance and unemployment insurance; and
Training and professional or skills development.

Depending on the position and business, employers may also need provisions covering:

Confidentiality;
Business and technological secrets;
Intellectual property rights;
Conflicts of interest;
Company property;
KPIs and performance assessment; and
Rights and obligations upon termination.

For foreign-invested enterprises, employment templates prepared by an overseas parent company should be reviewed and localised before being used in Vietnam.

5. Can a Probationary Period Be Included?

Yes.

An employer and employee may agree on probationary terms directly in the employment contract or in a separate probation agreement.

The maximum probationary period depends on the nature and complexity of the position. Vietnamese law provides different limits ranging from six working days to 30 or 60 days, and up to 180 days in certain cases involving enterprise managers.

An employee may only undergo probation once for the same job.

6. What Is New for Electronic Employment Contracts from 2026?

The Labor Code already recognises employment contracts entered into electronically in the form of data messages as having the same legal validity as written employment contracts.

From 2026, Vietnam introduced a more detailed framework through Decree No. 337/2025/ND-CP, effective from 1 January 2026, and Circular No. 08/2026/TT-BNV, effective from 1 July 2026.

Under this framework, electronic employment contracts are managed through the Electronic Employment Contract Platform.

Each qualifying electronic employment contract transmitted to the platform receives a unique identification number, while employers and employees are authenticated through appropriate electronic identification accounts.

Electronic employment contract data must be retained for at least 10 years from the date of termination of the employment contract, according to the source material.

This is particularly relevant to businesses using:

HR management software;
E-signature platforms;
Digital signatures;
Online onboarding systems; or
Paperless employment contracting processes.

Employers should review their technology provider, authentication process, signing mechanism, data retention arrangements and ability to connect with the Electronic Employment Contract Platform.

7. Is a New Contract Required When Salary, Position or Duties Change?

Employment conditions may change through:

Salary increases or adjustments;
Promotion;
Changes in job title;
Changes in workplace;
Changes in duties or responsibilities; or
Adjustments to employee benefits.

Depending on the change, the parties may enter into an employment contract appendix or execute a new employment contract.

The key principle is that employment documentation should accurately reflect the terms actually applied in practice.

Employers should therefore review outdated contracts where an employee’s salary, position or benefits have changed over time.

8. Can an Employment Contract Give the Company the Right to Terminate an Employee at Any Time?

Not necessarily.

Vietnamese law provides specific statutory grounds for an employer to unilaterally terminate an employment contract, together with applicable conditions and notice requirements.

Therefore, termination clauses commonly found in international employment templates should not be adopted in Vietnam without appropriate legal review and localisation.

Before terminating an employee, employers should consider both the legal basis for termination and the applicable procedures.

Termination should also be considered together with:

Internal Labor Regulations;
Performance assessment regulations;
Salary and bonus policies;
Disciplinary procedures; and
Other relevant HR policies.

9. Common Risks in Employment Contracts in Vietnam

Employers should review the following areas:

Does the contract reflect the actual employment relationship?

Calling an individual a “consultant” or “collaborator” does not necessarily prevent the relationship from being characterised as employment.

Does the signatory have proper authority?

Companies should ensure that employees signing contracts on behalf of the employer have appropriate authority.

Are the contract type and duration appropriate?

Employers should monitor contract expiry dates and the number of fixed-term contracts entered into with each employee.

Are employment templates properly localised?

Templates supplied by overseas parent companies or multinational groups should be reviewed for compliance with Vietnamese law.

Are contracts consistent with internal policies?

Provisions concerning KPIs, confidentiality, discipline, company property, bonuses and termination should be consistent across the employer’s HR documentation.

Are electronic contracts compliant?

Businesses using electronic employment contracts should review their systems against the 2026 regulatory framework.

10. What Should Employers Do?

Employers should periodically review their employment documentation rather than waiting for a dispute to arise.

A review may cover:

Employment contract templates;
Probation agreements;
Employment contract appendices;
Internal Labor Regulations;
Performance assessment regulations;
Salary and bonus policies;
Confidentiality and intellectual property policies;
Disciplinary and termination procedures; and
Procedures for signing and retaining electronic employment contracts.

A coordinated review can help identify inconsistencies between contractual documents, internal policies and actual employment practices.

How Can LTS LAW Assist?

LTS LAW advises Vietnamese and foreign-invested enterprises on labour and employment matters in Vietnam.

Our services include:

Drafting and reviewing employment contracts;
Localising employment contract templates and HR policies of foreign corporate groups;
Drafting and registering Internal Labor Regulations;
Advising on probation, salary and employee benefits;
Reviewing confidentiality, business secrets and intellectual property provisions;
Advising on electronic employment contracts;
Advising on employee discipline and termination; and
Assisting with employment disputes.

Does your business need to review or establish an employment contract framework in Vietnam?

Contact LTS LAW for assistance with employment contracts, Internal Labor Regulations, electronic employment contracts and other labour compliance matters.

Conclusion

Employment contracts in Vietnam should not be treated as standard HR paperwork. They should accurately reflect the actual employment relationship and remain consistent with the employer’s broader HR policies and compliance framework.

Employers should pay particular attention to contract classification, mandatory terms, contract duration, probation, termination, internal regulations and electronic employment contracts.

For foreign-invested enterprises, localising overseas employment templates and reviewing Vietnam-specific requirements are particularly important.

As businesses continue to digitalise HR operations, compliance with the 2026 framework for electronic employment contracts will also become an increasingly important part of employment documentation management.

Disclaimer

This article is provided for general informational and reference purposes only and does not constitute legal advice. The application of relevant laws and procedures may vary depending on the specific documents, circumstances, and countries or territories involved.

For advice tailored to your specific circumstances, please contact LTS LAW FIRM for further consultation and legal assistance.

LTS LAW FIRM

Floor 6, 520 Cach Mang Thang Tam
Nhieu Loc Ward, Ho Chi Minh City, Vietnam
Tel: (+84) 965 000 524
Email: contact@lts.com.vn

Working hours: Monday – Friday, 8 AM – 6 PM VNT