Probation is an agreement between an employee
and an employer on a probationary job in a certain period of time in accordance
with the provisions of law. Before entering into a labor contract, the employer
and the employee should go through a probationary period to determine the
long-term cooperation and attachment between the parties. The probation should
comply with the provisions of the Labor Code and relevant guiding documents.
The Labor Code 2019 comes into force as of January 1st, 2020, a
number of new regulations accordingly are issued in connection to the
probation, which each company should review the matter with its labour lawyers in Vietnam for compliance.
Regarding the circumstances which are permitted to enter into a
probationary contract, this contract is not applicable to the labor term which
is below 01 month. The Labor Code 2012 does not require that the
probationary provision must be stipulated in the labor contract. Accordingly,
an employer and an employee may negotiate on the probation, the rights and responsibilities
of the parties during the probation period. The parties may conclude a
probation contract if there is an agreement on the probation. If the probation
work meets the requirements, the employer shall conclude an employment contract
with the employee. From these provisions, it can be understood that the
employee and the employer should make a separate probationary contract. The
labor contract should be signed when the probation is completed and the
employee meets the recruitment requirements of the employer. According to the
latest provisions in the Labor Code 2019, the employer and the employee may
agree on the probation stated in the labor contract or a separate probationary
contract. If the probationary provision is stipulated in the labor contract,
the employer shall continue performing the existing labor contract at the end
of the probationary period once the employee satisfies the requirements.
Otherwise, a new labor contract shall be entered into.
The Labor Code determined the restriction of the probation period
based on the nature and complexity of the job. The probationary period
previously was limited to no more than 60 days for jobs requiring a college or
higher professional qualification. Currently, the probationary period is
permitted to extend up to 180 days for the executives. The executives play an
important role in business and operation of the enterprises, including owner of
a sole proprietorship, a partner of a partnership company, chairperson or
member of the Board of Member, President of a company, President or member of
the Board of Directors, Director/General Director, or holder of another
managerial position prescribed in the company’s charter (applicable to the
enterprise with no state capital)
Another amendment to the cancellation of the probationary
contract, the Labor Code 2019 removed the limitation of the right to cancel.
Accordingly, during the probationary period, each party has the right to cancel
the probationary contract or labor contract entered into without prior notice
and compensation. On the contrary, the employee and the employer may cancel the
probation if the probationary job does not meet the requirements that the
parties have agreed upon under the Labor Code 2012
Probationary periods are primarily designed to test out whether
both employer and employee to match each other at the start of an employment
relationship. The enterprises as employers need to have a clear understanding
of the principles of entering into a labor contract as well as a probationary
contract to avoid potential dispute in Vietnam.
ANT Lawyers is a law firm in Vietnam, recognized by Legal500, IFLR1000. We are an
exclusive Vietnam member of Prea Legal, the global law firm network covering
more than 150 jurisdictions. The firm provides a range of legal services to
multinational and domestic clients.
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