Employment contracts and probation: contract types, mandatory contents, electronic contracts, probation, foreign employees, secondments and labour sub-leasing

The framework, and what counts as an employment contract

The rules on individual employment are in Chapter III of Labour Code No. 45/2019/QH14, in force since 1 January 2021, and in Decree No. 145/2020/ND-CP, which details labour conditions and labour relations. Policy now comes from the Ministry of Home Affairs and enforcement from the provincial Departments of Home Affairs and labour inspectors. The Code applies to every employer in Vietnam, including a branch or representative office, and to every employee, Vietnamese or foreign.

Article 13 defines an employment contract by substance. An agreement between an employee and an employer on paid work, wages, working conditions and the rights and obligations of each party is a labour contract, and so is any agreement under another name, such as a service, consultancy or collaboration agreement, that contains paid work, a wage and the management and supervision of one party. A so-called consultant who works set hours at the office, reports to a manager and is paid monthly is an employee, with social insurance, tax withholding and termination rules to match. Misclassification is one of the commonest findings in labour inspections and social insurance audits, and it also bears on foreign contractor tax and permanent establishment exposure, discussed in FAQ 59 and Foreign contractor tax and tax treaties.

Two types of contract, and the two-contract rule

Article 20 recognises only two types. An indefinite-term contract has no end date and continues until it is terminated on a ground permitted by the Code. A definite-term contract has a term of no more than 36 months from its effective date. The seasonal or task-based contract of under 12 months that existed under the 2012 Code was abolished; a short engagement is simply a definite-term contract with a short term.

Article 20(2) controls renewal. If the employee keeps working after a definite-term contract expires, the parties must sign a new contract within 30 days; until they do, the old terms apply, and if they do not sign within that period the expired contract becomes an indefinite-term contract. The parties may sign only one further definite-term contract; if the employee then keeps working, the next contract must be indefinite. The rule does not apply to a person hired as director of an enterprise with State capital, to employees past retirement age (Article 149), to foreign employees (Article 151(2)) and to certain union officials whose term is running (Article 177(4)). The usual pattern for a Vietnamese employee is therefore probation, a first definite-term contract, a second, then an indefinite contract; gaps or re-hiring through an affiliate to break the chain are looked through.

An indefinite contract can be ended on the same Article 36 grounds as a definite-term contract, with 45 days' notice rather than 30 or 3; see Termination, severance and redundancy.

Form, language and electronic contracts

Article 14 requires a written contract in two copies, one for each party. An oral contract is permitted only for work lasting under one month, with limited exceptions. A contract concluded by electronic means in the form of a data message has the same value as a written contract.

Electronic contracts now have their own regime. Decree No. 337/2025/ND-CP of 24 December 2025, in force from 1 January 2026, sets the technical conditions: the parties must be identified (a citizen identity card or level-2 electronic identification account for Vietnamese employees; a passport and evidence of a valid visa or visa exemption for foreigners), sign with digital signatures, and use a licensed electronic contract service provider, which must send each signed contract to the national electronic labour contract platform operated by the Ministry of Home Affairs within 24 hours. The platform was required to be in operation by 1 July 2026. Electronic contracting is optional and paper contracts remain valid; an employer that adopts it should keep its own retrievable copies.

The Labour Code does not prescribe the language of the contract. Contracts with Vietnamese employees are written in Vietnamese; contracts with foreign employees are usually bilingual. The parties may agree which version prevails, but the authorities and the courts work from the Vietnamese text, so it deserves the same care as the English.

What the contract must contain

Article 21 lists the mandatory contents: the employer's name and address and the name and title of the person signing for it; the employee's full name, date of birth, gender, residence and identity document number; the job and the place of work; the term; the salary for the job or title, the form and timing of payment, allowances and other supplements; the regime for promotion and salary increases; working hours and rest periods; personal protective equipment; social insurance, health insurance and unemployment insurance; and training and skills development. Article 21(2) allows an agreement on the protection of business and technology secrets, and the remedy for breach, either in the contract or in a separate document.

Two matters cause more trouble than any other. The first is salary: the contract should state the salary for the position, each allowance separately and whether it is a fixed amount paid with salary, because that split decides the salary on which social insurance is paid (Social, health and unemployment insurance). The second is the non-compete clause. The Code permits confidentiality obligations but says nothing about post-termination restraints; a clause restraining a former employee from working for a competitor is widely regarded as difficult to enforce and is treated with suspicion by labour courts as a restriction on the right to work. Employers rely instead on confidentiality, garden leave during the notice period and the protection of trade secrets under the Law on Intellectual Property (Chapter 7).

Hiring an employee: from offer to first payroll

1. Define the position and the salary structureFix the job, place of work, salary and each allowance, and check them against the regional minimum wage and the published salary scale (Article 93).
2. Confirm the right to workFor a foreign employee, obtain the work permit or exemption confirmation before the start date (Article 151; Decree No. 219/2025/ND-CP). See Work permits for foreign staff.
3. Agree probation, if anyA separate probation contract or a clause in the labour contract, within the Article 25 maximum and at not less than 85% pay.
4. Sign the labour contractIn writing or electronically, with the Article 21 contents; for a foreign employee, ending no later than the work permit.
5. Register the employee for insuranceFile the social insurance, health insurance and, for Vietnamese employees, unemployment insurance registration with Vietnam Social Security within 30 days of the employee becoming subject to compulsory insurance (Article 28, Law No. 41/2024/QH15), and start monthly contributions.
6. Register for personal income taxObtain or confirm the employee's tax identification and register any dependants for family deductions. See Personal income tax and expatriates.
7. Update the labour declarationsRecord the hire in the labour use declarations and periodic labour reports prescribed by Decree No. 145/2020/ND-CP.
8. Issue the internal rules and run the first payrollGive the employee the internal labour rules and any bonus regulations, and issue a payslip with the first salary payment (Article 95(3)).

Probation

Articles 24 to 27 govern probation. The employer and the employee may agree on probation in the labour contract or in a separate probation contract, but there is no probation at all for a contract of under one month. Probation may be agreed only once for each job, and its length depends on the role under Article 25: up to 180 days for a manager of an enterprise as defined in the Law on Enterprises (for example a general director or deputy) or under the law on State capital; up to 60 days for a position requiring a professional qualification at college level or higher; up to 30 days for a position requiring intermediate-level qualifications, or for technical workers and professional staff; and up to 6 working days for any other work.

Under Article 26 the probation salary is agreed by the parties but may not be less than 85% of the salary for the job. Under Article 27, at the end of probation the employer must notify the result. If it is satisfactory, the labour contract continues or, after a separate probation contract, must be signed; if not, probation ends. During probation either party may cancel without notice and without compensation.

Insurance follows the form chosen. Decree No. 158/2025/ND-CP excludes employees working under a probation contract from compulsory social insurance; where probation is written into the labour contract, the common reading is that contributions are due from the start. Personal income tax is withheld on probation pay as well; the withholding rules for employees without a labour contract of three months or more differ from those for regular employees and are described in Personal income tax and expatriates.

Contracts with foreign employees

A foreign employee must be at least 18, have full civil capacity, the qualifications, skills and experience for the job, a health certificate, and no current criminal sentence, and must hold a work permit or a confirmed exemption (Article 151(1)). The employer must sign a written labour contract before the person starts work. Under Article 151(2) the term of the contract may not exceed the term of the work permit, and the two-contract rule does not apply, so a foreign employee may be engaged on a succession of definite-term contracts, each matching a permit or an extension. Article 34 lists the expiry of the work permit among the events that end the contract.

The contract is otherwise governed by the Labour Code in full. A clause choosing a foreign law or a foreign court does not remove the protections of the Code for work performed in Vietnam. Salary may be stated and paid in foreign currency for a foreign employee (Article 95(2)); the tax, insurance and currency consequences are in Wages, minimum wage and payroll. A foreign legal representative needs both work authorisation and the residence arrangements described in Legal representative and governance.

Secondments, service arrangements and labour sub-leasing

Intra-company transferees. A manager, executive, expert or technical worker transferred for a limited period within a foreign enterprise that has a commercial presence in Vietnam, in one of the eleven service sectors in Vietnam's WTO schedule, and who has been employed by that foreign enterprise for at least 12 consecutive months before the transfer, is exempt from the work permit requirement (Article 7, Decree No. 219/2025/ND-CP). Such a secondee works under an assignment letter from the home employer and need not sign a Vietnamese labour contract; Law No. 41/2024/QH15 also exempts intra-company transferees from compulsory social insurance. Recharges of salary costs under the group secondment agreement have tax consequences (Transfer pricing).

Service agreements. A foreign company that supplies services in Vietnam through its own staff, rather than seconding them to the Vietnamese company, pays foreign contractor tax and risks a permanent establishment if its staff stay long or conclude contracts. Its staff still need work permits or exemptions.

Labour sub-leasing. Supplying workers who work under the direction of a client is a separate, licensed business under Articles 52 to 58 of the Code and Decree No. 145/2020/ND-CP. It is a conditional business line: the supplier needs a licence and a bank deposit, may sub-lease workers only for the jobs on the Government's list, and for no more than 12 months per assignment, and the sub-leased worker may not be paid less than the client's own employees doing the same work. For foreign investors it is also a line with market-access conditions, so the position under Appendix I of Decree No. 96/2026/ND-CP should be checked (Market access for foreign investors).