Verification of employee’s background information during probation period in Vietnam

Under the Labour Code 2012, an employer and an employee are permitted to agree about working on a probation basis (thử việc) and the rights and obligations of the parties during the probation period. In addition, before entering into the probation contract, the employer may request the employee to submit various information, including full name, age, sex, residential address educational standard, professional qualifications, health status, and other “information directly relevant to the employment agreement”. To select the qualified candidates, the employer may also agree with the employee on a verification for such information, which shall give the employer the right to terminate probation contract in case of unsuccessful verification results. While it is not entirely clear, there is a risk to the employer to be considered as illegal termination. This is because:

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Written by Nguyen Quang Vu On In

Circular 39/2016 - New Lending Regulations for Banks in Vietnam

The State Bank of Vietnam (SBV) issued Circular 39/2016 in late December 2016 replacing the famous Decision 1627/2001 on lending by banks and other credit institutions in Vietnam which has been in force for more than a decade. Circular 39/2016 contains the following developments, among other things:

  • To terminate a loan agreement and accelerate the loan, a bank must prove that the borrower has provided inaccurate information or breached the loan agreement or the security agreements. While further clarifications are still required, this limitation may reduce the ability of a bank to call an event of default under the existing loan agreement. For example, defaults caused by a third party (e.g. a guarantor) may not satisfy the new requirement under  Circular 39/2016.
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Written by Nguyen Quang Vu On In

The Civil Code 2015 – Risks for the party who prepares the first draft of a contract in Vietnam

Article 404.6 of the Civil Code 2015 provides that where the drafting party in a contract inserts into the contract contents which are disadvantageous to the other party, the contract will be interpreted in a manner favouring the other party. This provision not only applies to consumer contracts but also to commercial contracts between two commercially-sophisticated parties. Accordingly, the party who prepares the first draft of a commercial agreement may be subject to the risk of adverse interpretation in future disputes. In addition, parties, when negotiating a contract, may now need to keep track of who drafting which provision in the contract.

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Written by Nguyen Quang Vu On In