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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