Question 5. The employment contract of the person working under the project, but at the end of the project, the project owner cannot solve the job for the people working, how will it be handled?
First of all, the enterprise needs to identify the contract agreed upon between the enterprise and the employee mentioned above as an employment contract or a civil contract such as a service contract, a cooperation contract, etc.
According to the provisions of the Labour Code 2019, an employment contract is an agreement between an employer and an employee on paid jobs, wages, working conditions, rights and obligations of each party in the employment relationship. In case two parties have an agreement by another name but with contents showing paid employment, salary and the management, administration and supervision of one party, it is also considered an employment contract.
Case 1: The above contract is an employment contract
According to the current regulations of the Labour Code 2019, there are a total of 13 cases of termination of employment contracts between employers and employees. In which, the case "Completed work according to the employment contract" is one of these 13 cases, of course, is a legal basis for terminating the employment contract16. However, the enterprise can only apply this basis provided that the two parties have determined and agreed in advance on the work that the employee must complete under the contract, so that when the project ends, it leads to the completion of the agreed work in the employment contract, the employment contract will also terminate.
However, in case the enterprise cannot apply the above- mentioned legal grounds because the labour contract between the enterprise and the employee does not have a clear definition of the work that the employee must complete, the enterprise may also apply the reason of changes in structure and technology to terminate employment contracts with employees17. Specifically, the following cases will be considered as structural and technological changes:
Changing organisational structure, reorganising labour;
Changing production and business processes, technologies, machines and equipment associated with the employer's production and business lines; and
Change the product or product structure.
Depending on the content of the finished project, the enterprise will determine whether this is a change in process, technology or a change in product or product structure. Nevertheless, enterprises should note that in the case of structural and technological changes that affect the
16 Article 34.2 of the Labour Code 2019
17 Article 42 of the Labour Code 2019.
employment of many employees, the enterprise must develop and implement a labour use plan. In case the enterprise cannot solve the job but must dismiss the employee, it must pay the job loss allowance. In addition, the dismissal of employees can only be carried out after consulting with the internal representative organisations of employees.
Case 2: The above contract is not an employment contract
Numerous businesses now propose to sign other types of contracts with employees such as service contracts, collaborator contracts instead of employment contracts in order to save costs for businesses. Two key conditions to define a contract as an employment contract include: the nature of paid employment, salary and the nature of management, administration and supervision. Therefore, if the contract agreed upon between the enterprise and the employee does not have these two characteristics, it is likely that the contract between the two parties is not an employment contract.
In case the above-mentioned contract is a service contract, according to regulations, a service contract is an agreement between the parties, whereby the service provider performs work for the service user, the service users must pay for the service fee to the service provider18. However, enterprises should note that the service provider must be a registered trader to be allowed to perform a commercial activity instead of an employment relationship19.
Thus, if the contractual relationship between the enterprise and the employee mentioned above is a civil one, the termination will be less binding than the employment relationship. For example, with a service contract, an enterprise may unilaterally terminate the performance of the contract in case the continuation of the
18 Article 513.1 of the Civil Code 2015
19 Article 2 of the Law on Commerce 2005
work is not beneficial to the enterprise, only on the condition that the service provider is firstly informed before a reasonable time20.
According Phuoc & Panerst