Question 1. How to understand the hiring and employment between the Employer and the Employee under the regulation of the labour law?


Article 3.5 of the Labour Code prescribes that an employment relationship is a social relation arising from hiring workers, employment and payment of salary between an Employee, an Employer and the organisations of the parties, competent State agencies, labour relationship comprises individual labour relationship and collective labour relationship. However, the Labour Code has not defined the term “hiring worker”, hence, hiring worker could be interpreted in a common way as an Employee provides his or her labour to the Employer in return for being paid salary and other employment benefits.

An employment relationship begins to exist when an Employer recruits an Employee to work for the Employer and maintains during the entire period of employment. As prescribed by the Labour Code, some employment relationships come into existence prior to the conclusion of a labour contract, such as probationary agreement in a probationary period, or apprenticeship agreement in an apprenticeship. Depending on specific arrangements between the parties, though the parties may not call their agreements LC, State authorities can conclude that these agreements are the LC based on the employment of workers and salary payment between the parties in reality if disputes arise. If an employment relationship exists as prescribed in Article 3.5 of the Labour Code and the parties do not enter into a LC, an Employer may be subject to administrative sanctions for not signing the LC with an adminitrative fine of VND4,000,000 – VND10,000,000 with respect to the case of 1-10 Employees involved[1].

Thus, although there is no LC entered into between an Employee and an Employer, an employment relationship still exists if there is actual employment of workers and salary payment between the Employer and the Employee.

[1]Articles 5.1 and 8.1 of Decree No. 28/2020/ND-CP of the Government dated 01/03/2020