Answer:
The Labour Code and the guiding regulations do not have specific and consistent instructions on how to record the term or calculate the LC term. Therefore, in practice, there will be many cases where the LC records the same term of implementation but have different commencement dates and ending dates. For example, a LC has the term of 12 months (also recorded as 01 year), from 01 January 2019 to 31 December 2019; or a LC with the term of 12 months (also recorded as 01 year), from 01 January 2019 to 01 January 2020.
1. Regarding the term of LC:
A definite-term LC is a LC of which the parties define the term, the limitation period of the LC does not exceed 36 months[1]. Thereby, the term of the LC according to the provisions of the Labour Code must be recorded by reference to months, not years. Therefore, the way recording the LC term on yearly basis (for example, 01 year, 02 years, etc.) that some enterprises habitually use is not accurate because 01 year will be interpreted as 365 days[2]; meanwhile, the actual number of days determined for each month varies (February has 28 or 29 days, March has 31 days, etc., for example), regardless of whether a year has 365 days or 366 days.
2. Regarding how to calculate the LC term:
According to Articles 147.2 and 148.3 of the Civil Code prescribing the commencement and ending date of a time limit, “Where a time limit is stated by reference to days, weeks, months or years, the first day of the time limit must not be taken into account and the time limit must commence from the day immediately following the stated date”,”Where a time limit is stated by reference to months, the time limit must end at the last moment of the corresponding day of the last month of the time limit. If the month in which the time limit ends does not have a corresponding day, the time limit must end on the last day of such month”. However, the calculation of the time limit as provided in accordance with the Civil Code as above is only applicable if otherwise agreed by parties or otherwise provided by law[3]. Therefore, the method of calculating the term of a LC will lead to two cases as follows:
- The first case: The LC only records the contract term but does not specify which date will be the commencement date and which date will be the ending date.
In this case, the term of the LC will be calculated according to the above provisions of the Civil Code. Specifically, if the LC is entered on 01 January 2019 with the term defined as 12 months, the start date of the term will be 02 January 2019 and the end date will be defined as “the corresponding day of the last month of the time limit” i.e. 01 January 2020. However, in practice, when entering into the LC, the enterprise often considers the effective date of the LC (01 January 2019) as the first working day of the Employee and obviously, the last working day when the full term of 12 months expires will be 31 December 2019. Therefore, in respect to the LC which states only the 12-month term, the enterprise may face legal risks when terminating the LC with its Employee upon expiration of the LC. Accordingly, based on the above provisions of the Civil Code, the Employee can argue that 01 January 2020 is his or her last working day and the enterprise terminating the LC on 31 December 2019, preventing the Employee from entering the workplace to continue working may be considered unilaterally terminating the LC illegally.
In addition, the duration of the LC, the commencement and ending date of the LC are considered as 03 compulsory contents that must be recorded in the LC[4]. Conclusion of the LC without any 01 of the 03 main contents mentioned above can result in an administrative penalty of up to VND50 million[5].
- The second case: the LC contains the contract term and its commencement and ending date.
With respect to the LC including the term of the contract, its commencement and ending date, according to the Civil Code, the method to calculate the LC term in such case will be in accordance with the agreement of parties if any instead of the method of the Civil Code as above-mentioned in the first case. In other words, the parties can completely make a mutual commitment whose term is 12 months, from 01 January 2019 to 31 December 2019.
Besides, regarding the end of the last day of the time limit, according to Article 148.6 of the Civil Code, the end of the last day of the time limit is determined at 24 o’clock of that date. However, as cited in Article 145.1 of the Civil Code, the aforementioned end will apply only when no otherwise agreement is reached.
As one of the main mandatory contents of the LC, the working time of an Employee must be recorded clearly in the LC upon the conclusion of the LC. Therefore, in case a LC specifies working hours, it is clear that parties have reached an agreement on the end of the last day of the term. Consequently, if the agreed working time of an Employee is from 08 AM to 12 PM and from 01 PM to 05 PM every working day, the end of the LC will be at 05 PM of the last day. The end at midnight as instructed in the Civil Code is inappropriate in this case. Why is this important? Because there are some cases the Employee for some reasons refuses to leave the workplaces upon the end of the working hours of the last working day with the belief that the LC is still valid until 12 AM of the next day, which allows that person to stay at the office until midnight.
[1] Article 20.1 (b) of the Labour Code
[2] Article 146.1 (a) of the Civil Code
[3] Article 145.1 of the Civil Code
[4] Article 3.4 of Circular 10/2020/TT-BLDTBXH of the MOLISA dated 12 november 2020
[5] Article 8.1 of Decree 28/2020/ND-CP of the Government dated 01 March 2020
