Everything you need to know about the failure to execute written employment contracts

Failure to execute written employment contracts is an issue faced by many employees when entering into employment relationships. Recognizing such an issue, employees increasingly seek to understand the relevant legal regulations in order to protect their legitimate rights and interests. The article below by NP Law will help you better understand such a matter.

I. What is the current rate of employees working without written employment contracts?

In the context where employment relationships are increasingly regulated more strictly by law, practice shows that there remains a considerable number of employees working without written employment contracts. Such a situation may adversely affect the protection of employees’ rights and interests when disputes arise.

According to the Statistics in 2023 published by the General Statistics Office, the number of employees working without employment contracts during that year reached approximately 1.4 million people. The primary causes of this situation include the specific nature of certain occupations (such as agricultural production, etc.), as well as the awareness and understanding of both employees and employers.

The fact that many employees continue to work without written employment contracts remains relatively common and has caused numerous consequences not only for employees but also for enterprises themselves.

II. The concept of failure to execute written employment contracts

1. What is the failure to execute a written employment contract?

Under Clause 1, Article 13 of the Labor Code 2019, an employment contract is defined as an agreement between an employee and an employer regarding paid employment, wages, working conditions, and the rights and obligations of each party in the employment relationship.

Currently, the law does not specifically define the term “failure to execute a written employment contract”. However, the Labor Code 2019 provides regulations governing employment relationships.

Accordingly, NP Law provides the following general interpretation of such a term: Failure to execute a written employment contract refers to a situation where an employee and an employer agree on work arrangements but do not establish such agreement in written form.

2. What is the legal validity of verbal employment contracts?

Where no written employment contract is executed, many employees are concerned about the legal validity of verbal employment contracts in order to protect their lawful rights and interests.

Pursuant to Clause 2, Article 14 of the Labor Code 2019, the parties may enter into verbal employment contracts in respect of contracts with a term of less than one month, except for the cases prescribed in Clause 2, Article 18, Point a, Clause 1, Article 145, and Clause 1, Article 162 of this Code.

Accordingly, verbal employment contracts are only considered lawful and legally valid for contracts with a term of less than one month, except for statutory exceptions.

3. Differences between written employment contracts and verbal employment contracts

Written employment contracts and verbal employment contracts differ based on the following criteria:

III. Legal regulations relating to failure to execute written employment contracts

1. Forms of employment contracts

To align with the socio-economic development of the country and facilitate the execution of employment contracts, Vietnamese law currently recognizes three forms of employment contracts.

Accordingly, Article 14 of the Labor Code 2019 provides the following regulations regarding the form of employment contracts:

• Employment contracts must be executed in writing and made in two copies, with one copy retained by the employee and one by the employer, except for the case prescribed in Clause 2 of this Article.
• Employment contracts executed through electronic means in the form of data messages in accordance with the law on electronic transactions shall have the same validity as written employment contracts.
• The parties may enter into verbal employment contracts for contracts with a term of less than one month, except for the cases prescribed in Clause 2, Article 18, Point a, Clause 1, Article 145, and Clause 1, Article 162 of this Code.

Accordingly, employment contracts may currently be executed in written form, through electronic data messages, or verbally in certain specific cases.

2. In which cases is it mandatory to execute written employment contracts?

Pursuant to Article 14 of the Labor Code 2019, cases in which written employment contracts are mandatory include:

• Employment contracts with a term exceeding one month.
• Seasonal or specific work contracts with a term of less than 12 months where one employee is authorized to enter into the employment contract on behalf of a group of employees (Clause 2, Article 18 of the Labor Code 2019).
• Employment contracts entered into with employees under 15 years of age and their legal representatives (Point a, Clause 1, Article 145 of the Labor Code 2019).
• Employment contracts entered into with domestic workers (Clause 1, Article 162 of the Labor Code 2019).

3. In the absence of a written contract, how are the rights and obligations of the parties determined?

Where no written contract exists, meaning the employer does not execute an employment contract, uses another contractual designation, or establishes an employment relationship without verbal agreement or data messages, the rights and obligations of the parties are still determined based on the actual employment relationship in accordance with the Labor Code 2019.

Specifically, if the relationship between the employee and employer includes elements such as work performance, wage payment, and management, supervision, or direction by the employer, the law still recognizes it as an employment relationship. In such cases, the fundamental rights and obligations of the parties still arise as though a lawful employment contract exists (Clause 1, Article 13 of the Labor Code 2019).

In addition, the rights and obligations of the parties may also be determined under internal labor regulations, company policies, or collective labor agreements (if any).

In summary, even in the absence of a written employment contract, employment relationships remain regulated and protected by law on various legal grounds.

4. Is it permissible to execute an employment contract after the employee has already worked for a period of time?

Pursuant to Clause 2, Article 13 of the Labor Code 2019, before accepting an employee for work, the employer is required to execute an employment contract with the employee.

IV. Questions relating to failure to execute written employment contracts

1. When is the failure to execute a written employment contract considered a violation of law?

Pursuant to the Labor Code 2019, the failure to execute a written employment contract is considered a violation of law in the following specific cases:

• Failure to execute a written employment contract for employment relationships with a term exceeding one month (Clause 1, Article 14).
• Failure to execute a written employment contract for seasonal work or specific jobs with a term of less than 12 months where one employee is authorized to enter into the employment contract on behalf of a group of employees (Clause 2, Article 18).
• Failure to execute a written employment contract with employees under 15 years of age and their legal representatives (Point a, Clause 1, Article 145).
• Failure to execute a written employment contract with domestic workers (Clause 1, Article 162).
• Failure to execute an employment contract before accepting the employee for work (Clause 2, Article 13).

2. How can an employment relationship be proven in the absence of a contract?

Based on the spirit of Clause 2, Article 13 of the Labor Code 2019, an employment relationship may be proven in the absence of a written contract through the following means:

• Evidence of paid employment and wages, such as payroll records, salary slips, or bank transfer statements.
• Evidence showing management, supervision, or direction by the employer, such as attendance records, employee identification cards, work assignment decisions, and similar documents.

In summary, to prove the existence of an employment relationship where no contract exists, employees generally need to demonstrate that wages were paid and that the enterprise exercised management or supervision over their work.

3. Are employees entitled to full rights and benefits if no employment contract is executed?

Employees may still enjoy full rights and benefits; however, the extent to which such rights are fully protected in practice depends on whether the employment relationship can be proven.

4. If an employee works long-term without a written contract, what type of contract will be recognized?

Pursuant to Clause 1, Article 20 of the Labor Code 2019, employment contracts are categorized into two types:

• An indefinite-term employment contract is a contract in which the parties do not determine the duration or the termination date of the contract.
• A definite-term employment contract is a contract in which the parties determine the duration and termination date of the contract, with a term not exceeding 36 months from the effective date of the contract.

In such a case, if the employee works on a long-term basis and can prove the existence of an employment relationship between themselves and the employer, the relationship may be recognized as an indefinite-term employment contract.

5. Does the failure to execute an employment contract affect the right to unilaterally terminate the contract?

Failure to execute an employment contract does not eliminate the right to unilaterally terminate the contract because such a right is prescribed under Article 35 of the Labor Code 2019. In addition, employment contracts must comply with legal regulations.

V. Why should you seek legal consultation from NPLaw regarding issues relating to failure to execute written employment contracts?

Seeking legal consultation from NP Law regarding issues relating to failure to execute written employment contracts is the choice of many clients due to the following advantages:

• Support in collecting and assessing evidence: With practical experience and in-depth understanding of labor law regulations, NP Law can advise and assist clients in collecting favorable evidence for resolving labor disputes.
• Protection of rights and interests in disputes: NP Law may represent clients in negotiations, mediation, or litigation where necessary.
• Saving time and effort: Instead of independently researching relevant legal regulations, we help clients save significant time and effort in handling such matters.

With these advantages, NP Law has become a reputable legal service provider trusted by many clients seeking consultation on issues relating to failure to execute written employment contracts.

The above information is provided for reference purposes only. Should clients require detailed advice regarding specific cases, please contact NPLaw Firm for immediate consultation.