04 important notes for contracts of a term of under 1 month

1. Must a contract of a term of under 1 month enter into writing?

Article 14, Labor Code 2019 prescribes the contract form as follows:

1.1 . A labor contract shall be entered into in writing and made in 2 copies, one to be kept by the employee and the other by the employer, except the case specified in Clause 2 of this Article.
A labor contract entered into by electronic means in the form of a data message under the law on e-transactions is as valid as a written labor contract.

2. 2. The two parties may enter into a verbal labor contract, for contracts of a term of under 1 month, except the cases specified in Clause 2, Article 18, at Point a, Clause 1, Article 145, and in Clause 1, Article 162, of this Code.

Accordingly, the contracts of a term of under 1 month, employers and employees may enter into a verbal labor contract without any writing or electronic data, except for the cases:

- Enter into the contract of employees aged full 18 years or older may authorize one of them to enter into a labor contract.

- A person aged under full 15 years.

- Domestic workers.

2. Must employees who work in a term of under 1 month have a probation period?

In accordance with Article 25, Labor Code 2019, the probation period for each job, and is prescribed as follows:

- No more than 180 days: For enterprise managers

- No more than 60 days: For holders of job titles requiring professional and technical qualifications of collegial or higher degree

- No more than 30 days: For holders of job titles requiring professional and technical qualifications

- No more than 06 days: For other jobs

However, Clause 1, Article 24, Labor Code points out clearly that:

3. Probation shall not be applied to employees who enter into labor contracts with a term of under 1 month.

Therefore, employees who have labor contracts with a term of under 1 month must not have a probation period and formally become the official staff. Therefore, employees shall be paid a full wage for the work they are doing.

A fine of between VND 500,000 and VND 1,000,000 shall be imposed on any employer that requests workers under labor contracts with the term of less than 01 months undergo probation (In accordance with Point a, Clause 1, Article 10 of the Decree No. 12/2022/ND-CP).

3. How many times are the contracts of a term of under 1 month allowed to sign?

In accordance with Point b, Clause 1, Article20, Labor Code 2019, the contract with a term of under 1 month is a definite-term labor contract.

When a labor contract expires and the employee continues working shall sign a new labor contract in accordance with the provisions prescribed in Clause 2, Article 20 of Labor Code 2019 as follow:

- Sign a new labor contract within 30 days from the date of expiration of the contract with a term of under 1 month:

+ Sign once more contract or Indefinite-term labor contract.

+ Sign the contract with a term of under 1 month with the cases as follows:

·   Hired to work as directors of state capital-invested enterprises

·   Hire elderly workers

·   Hire foreigners to work in Vietnam

·   Hire the employee who is a member of the leadership board of a grassroots-level employees’ representative organization until the end of his/her term of office.

- Employees continue to work without signing the new contract: The contract with a term of under 1 month becomes indefinite-term labor contract after 30 days.

Therefore, enterprises and employees are allowed to sign the contract with a term of under 1 month 2 times.

However, in special cases such as elderly workers, foreign employees, people hired to work as directors of state capital-invested enterprises, and members of the leadership board of representative organizations are allowed to sign the contract with a term of under 1 month many times.

4. Must a contract with a term of under 1 month be covered by insurance?

In accordance with Clause 1, Article 2, Law on Social insurance 2014, persons working under labor contracts with a term of between full 1 month shall be covered by compulsory social insurance.

For unemployment insurance and health insurance, Article 43 of the Law on Employment 2013, and Clause 1, Article 12 of the Law on Health Insurance 2008, which was amended in 2014 also point out clearly that the persons working under labor contracts with a term of under 3 months shall be covered by these types of insurance.

Therefore, employees are not covered by compulsory social insurance when signing contracts with a term of under 1 month.

However, the employer shall additionally pay him/her an amount to the employees who have the contract with a term of under 1 month instead of the amount of compulsory social insurance, health insurance and unemployment insurance premiums.

Clause 3, Article 168, Labor Code 2019 prescribes:

3. For an employee who is not subject to compulsory social insurance, health insurance and unemployment insurance, when paying wages to the employee, the employer shall additionally pay him/her an amount equivalent to the amount of compulsory social insurance, health insurance and unemployment insurance premiums payable by the employer for the employee in accordance with the laws on social insurance, health insurance, and unemployment insurance.

Therefore, the employer must additionally pay an amount equivalent to the amount of compulsory social insurance, health insurance and unemployment insurance.

A fine ranging from VND 03 - 20 million shall be imposed for the employer for failing to pay or inadequately paying depending on the number of employees (in accordance with Clause 4, Article 17, Decree No. 12/2022/ND-CP).