A labor contract is an agreement between an employee and an employer regarding paid employment, wages, work conditions, and each party’s rights and obligations in labor relations. When is a labor contract invalidated? How we should deal with invalidated labor contracts? In order to clarify this issue, Hong Bang Law Firm would like to send the following advice to Clients:

Legal basis

• Labor Code 2019;
• Decree No. 145/2020/ND-CP dated December 14, 2020 guiding the Labor Code on labor conditions and labor relations.

Cases of invalid labor contracts

The labor contract may be partially or in wholely invalidated:

• The labor contract is completely invalid in the following case:
• The whole contents of the labor contract violate the law;
• The person who concludes the labor contract is not competent or violates the principles of voluntary, equality, goodwill, cooperation and honesty in the conclusion of labor contracts.
• The work concluded in the labor contract is a job that is prohibited by law.
• The labor contract is partially invalid when the contents of that part violate the law but do not affect the rest of the contract.

How to handle an invalid labor contract

When the labor contract is declared partially invalid

• When the labor contract is declared partially invalid, the employer and the employee shall amend and supplement the part of the labor contract that is declared invalid in accordance with the collective labor agreement and the law.
• The rights, obligations and interests of the two parties in the period from the start of work under the labor contract shall be declared partially invalid until the labor contract is amended or supplemented, shall be settled according to the applicable collective labor agreement, in case there is no collective labor agreement, it shall comply with the provisions of law.

In case the labor contract is declared invalid with a lower salary than the provisions of the labor law, the applicable collective labor agreement, the two parties must re-agree the salary in accordance with regulations and the employer is responsible for determining the difference between the agreed salary and the salary in the contract. co-workers are declared invalid to reimburse the employee corresponding to the actual working time under the declared invalid labor contract.

• In case the two parties fail to agree on amendments and supplements to the contents that have been declared invalid:
• Termination of labor contracts;
• The rights, obligations and interests of the two parties from the beginning of work under the labor contract shall be declared partially invalid until the termination of the labor contract shall be fulfilled in accordance with Clause 2 of this Article;
• Settlement of severance benefits as prescribed in Article 8 of Decree No. 145/2020;
• The working time of the employee under the declared labor contract is counted as the time the employee works for the employer to act as a basis for the implementation of the regime as prescribed by the labor law.
• Other matters relating to the handling of partially invalidated labor contracts fall under the jurisdiction of the court in accordance with the Provisions of the Civil Procedure Code.

Handling of labor contracts declared invalid in its entirety

Handling of labor contracts is completely invalid due to the person’s improper authority or violation of the principle of labor contracting

• When the labor contract is declared completely invalid, the employee and the employer re-sign the labor contract in accordance with the provisions of law.
• The rights, obligations and interests of the employee from the start of work under the labor contract shall be declared invalid until the re-signed labor contract is performed as follows:
• If the rights and interests of each party in the labor contract are not lower than the provisions of the applicable law or collective labor agreement, the rights, obligations and interests of the employees shall be exercised according to the contents of the labor contract which is declared invalid;
• If the labor contract contains the rights, obligations and interests of each party that violates the law but does not affect other parts of the labor contract, the rights, obligations and interests of employees comply with Clause 2, Article 9 of Decree No. 145/2020;
• The time the employee works under the declared labor contract invalidated shall be counted as the working time of the employee for the employer to act as a basis for the implementation of the regime as prescribed by the labor law.
• In case the labor contract is not re-signed, the whole invalidation shall:
• Termination of labor contracts;
• The rights, obligations and interests of the employee from the start of work under the labor contract shall be declared invalid until the termination of the labor contract shall be fulfilled in accordance with Clause 2 of this Article;
• Settlement of severance benefits as prescribed in Article 8 of Decree No. 145/2020.
• Other matters relating to the handling of all invalid labor contracts due to the person’s improper authority or violation of the principle of labor contract association falling under the jurisdiction of the court in accordance with the Civil Procedure Code.

Handling of a full invalid labor contract due to the whole contents of the labor contract violating the law or the work concluded in the labor contract is a job that is prohibited by law.

• When the labor contract is declared completely invalid, the employee and the employer conclude the new labor contract in accordance with the provisions of law.
• The rights, obligations and interests of employees from the beginning of work under labor contracts shall be declared invalid until the conclusion of new labor contracts shall comply with Clause 2, Article 10 of Decree No. 145/2020.
• In case the two parties fail to conclude a new labor contract:
• Termination of labor contracts;
• The rights, obligations and interests of the employee from the start of work under the labor contract shall be declared invalid until the termination of the labor contract shall be fulfilled in accordance with Clause 2 of this Article;
• The employer pays the employee a sum agreed upon by the two parties but each working year is at least equal to one month’s regional minimum wage applicable to the working area prescribed by the Government at the time of the decision to declare the labor contract invalid. The working time of the employee to calculate the allowance is the actual working time under the labor contract which is declared invalid as defined under Point a Clause 3 Article 8 of Decree No. 145/2020;
• Settlement of severance benefits for labor contracts before labor contracts declared invalid under Article 8 of Decree No. 145/2020, if any.
• Other matters relating to the handling of the labor contract are completely invalid due to the whole contents of the labor contract violating the law or the work concluded in the labor contract is a job that is prohibited by law under the jurisdiction of the Court under the provisions of the Civil Procedure Code.

Above counsel in circumstances where labor contracts are invalid and how to handle invalid labor contracts.

If you need more detailed advice as well as how to access this service, please contact Lawyer Nhat Nam via hotline: 0912.35.65.75, 0912.35.53.53 or call the legal consulting centre at 1900.6575 or send a service request via email: lienheluathongbang@gmail.com.

We wish you and your family good health, peace and success!

Best regards,