Since 01/01/2021, the 2019 Labor Code recognizes only two types of labor contract. As a result, almost every dispute about an "expired contract", "consecutive signing" or "notice of resignation" comes back to one question: which type is the contract, and what stage is it in? This article helps enterprises answer that question correctly, based on Article 20 of the 2019 Labor Code.
The two types of labor contract under current law
| Criteria | Indefinite term | Fixed term |
|---|---|---|
| Nature | The parties do not state an end date | The parties state a clear end date |
| Maximum duration | None | No more than 36 months from the date the contract takes effect |
| Consecutive signings | Not applicable | May be signed only 01 more time as a fixed-term contract |
| Notice when the employee resigns | At least 45 days | 30 days (12–36 months) or 03 working days (under 12 months) |
| Biggest risk | Hard to adjust when the employee is no longer a good fit | Forgetting to sign a new contract at expiry |
Contracts for a season or a specific job (under 12 months) have not been a separate type since 2021. They are now signed as fixed-term contracts. How to sign temporary workers lawfully is analyzed separately in a follow-up article in this series.
When a fixed-term contract expires: the 30 days decide everything
This is the point enterprises overlook most often. When a fixed-term contract expires and the employee keeps working:
- Within 30 days of the expiry date, the parties must sign a new contract. Until it is signed, rights and obligations continue under the old contract.
- After 30 days without a new contract, the old contract automatically becomes an indefinite-term contract.
- If the parties sign a new fixed-term contract, it is the last one that may be signed. After that, if the employee keeps working, an indefinite-term contract must be signed.
The law also sets out some exceptions to consecutive signing, for example a person hired as a director of a state-owned enterprise, and certain special cases such as older employees or foreign employees. Enterprises should check each case against the original text before applying it.
A practical example
Employee A signs a 12-month contract from 01/03/2025, expiring on 28/02/2026. The company forgets the formalities and A keeps working as normal. By 31/03/2026 (more than 30 days later), A's contract automatically converts into an indefinite-term contract, even though the company never intended that. From then on, to terminate the contract the company needs a statutory ground and must give 45 days' notice.
Which type of contract should you choose?
There is no "best" type for every position. Enterprises can apply the following principles:
- Fixed term (12–36 months) suits newly hired positions, time-limited projects, or when you need to observe long-term capability further. It is also the common choice after the probation period.
- Indefinite term suits core positions, long-standing stable employees, or when the enterprise wants to retain people through stability. This type does not "lock in" the enterprise: the employee may still leave with 45 days' notice, and the enterprise can still terminate when there is a ground under Article 36 of the Labor Code.
- Under 12 months should be used only when the need is genuinely short-term, such as a project or a peak period, because the law still requires compulsory insurance, as for other contracts, if the conditions are met.
Contract addenda: they amend content but not the term
Many enterprises use an addendum to "extend a contract quickly". This approach is not valid. Under Article 22 of the Labor Code, an addendum is part of the contract and is used to detail, amend or supplement clauses, but it may not change the term of the labor contract. To lengthen the term, a new contract must be signed in line with the principles above.
Contract review checklist for enterprises
- Build a tracking table of expiry dates for every fixed-term contract, with a reminder at least 45 days ahead.
- Establish clearly which signing this is among fixed-term contracts.
- At expiry, choose one of two routes: sign a new contract or give written notice of termination. Do not let the contract "drift" past the 30-day mark.
- Do not use an addendum to change the contract term.
- Keep the original contract, addenda and handover records in the personnel file.
If an enterprise has dozens of contracts expiring at different times, tracking them by hand in a spreadsheet makes omissions very easy. Nhân Kiệt's labor legalization and EOR services already include contract lifecycle management for each employee.
Frequently asked questions
What is the maximum duration of a fixed-term labor contract? Up to 36 months from the date the contract takes effect. A fixed-term contract may not state a longer term than this.
What happens if a contract expires and no new one is signed? For the first 30 days, the parties continue under the old contract. After 30 days without a new contract, it becomes an indefinite-term contract.
How many consecutive fixed-term contracts may be signed? After the first contract, only one more fixed-term contract may be signed. If the employee continues working, the next one must be an indefinite-term contract, except in cases where the law provides exceptions.
Can a contract be extended by an addendum? No. An addendum may not change the term of a labor contract. To extend it, a new labor contract must be signed.
Content updated until October 2026. Businesses should refer to the current documents or contact specialists before applying to each specific case.