A labor contract is considered to be an agreement on the rights and obligations that are signed between the enterprise and the employee, all contractual information will binding responsibilities between the two parties and be drafted based on the current labor law in the country in which it is operating. However, not everyone knows the rules and nature of different types of contracts.
What is a labor contract?
Under the Labour Code 2012, a labor contract is defined as an agreement between an employee and an employer on a paid job, working conditions, and rights and obligations of each party in the labour relationship. The labor contract is signed based on legal transparency and voluntariness, equality between the parties. Regarding the content of the labor contract between the two sides, there will be a general agreement as well as a contract appendix to illustrate the supplementary terms. The contract appendix is considered to be an inseparable part of that contract.
How many types of employment contracts are there?
Based on the term of the contract, labor contracts are divided into 3 types as follows:
- Seasonal Contract: a seasonal contract (or contract for a specific job) is a labor contract with the duration of fewer than 12 months;
- Definite Term Contract: a definite term contract means a labor contract with a duration of 12 months to 36 months. The term of a definite term contract can be extended one time only. Thereafter, the employer must enter into an Indefinite Term Contract; and
- Indefinite Term Contract: an indefinite term contract means a labor contract in which the two parties do not fix the term nor the time of termination of the contract.
For a labor contract to have legal effect, it must be in written form except for the short-term contract (less than 3 months). In general, the two parties are free to negotiate their own employment terms as long as these terms are not less favorable to the employee than the standard set out in the labor laws.
One thing to notice is that A Seasonal Contract may become a Definite Term Contract, and a Definite Contract may become an Indefinite Term Contract if the employee continues to work for the employer after the termination date.
The term of a labor contract is the period of time when the contract signed between the two parties takes effect, is protected by law, and binding between the two parties. Therefore, to have the contract term clearly defined in the contract term will be very helpful in situations of dispute or liquidation of the contract.
Hopefully, you will find the above information helpful.
