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SOME NOTEWORTHY POINTS FOR AGREEMENT WITH COLLABORATORS / FREELANCERS FROM 2021

According to Article 22 of the Vietnam Labor Code 2012, employees and employers can create labor relations through a seasonal labor contract or under a certain job with a duration of under 12 months. (usually called a work-specific labor contract).

However, from 1st January 2021, when the Vietnam Labor Code 2019 is officially applied, the seasonal contract will no longer exist. All labor relations with jobs under 36 months are entered into a definite-term labor contract.

Thus, when setting up contracts with consulting service individuals, collaborators, freelancers, consultants, or contractors of the enterprise, it is necessary to clearly define the “relationship” between the two parties, in particular: Labor relations or Service relations.

The current laws in Vietnam have no definition of a collaborator / freelancer contract. Therefore, there will be a careful consideration based on the content of the two-party agreement. When this relationship is defined as a “service”, those collaborators / freelancers will not be treated as employees of the enterprise, and in this case, the Service Contract can be used to sign. Enterprises can refer to this further with specialized law consultants.

According to Civil Code 2015, a service contract is an agreement between parties whereby a provider will perform work for people who use the service. The service user must pay the service fee to the provider. The payment is calculated based on the number of hours of service. The enterprise does not manage working time, workplace, and does not comply with the labor obligations, labor discipline regulations,…

Thus, depending on the actual work and the content of the signed contract, if the enterprise recruits “workers” in the form of collaborators / freelancers, it must still be considered as labor relations and must not sign service contracts. For example, there is an agreement on the rights and obligations of each party in labor relations, binding compliance with the labor regulations, labor discipline, etc., according to new regulations from 2021, the enterprise needs to sign a definite-term labor contract.