What is a Probationary Contract? A Compilation of Standard Forms

A probationary contract is an essential part of the recruitment process, ensuring the rights and obligations of both the employer and the employee. It not only helps the business evaluate the candidate’s capabilities but also helps the candidate get acquainted with the work environment before officially signing an employment contract. To learn more details about probationary contracts and related legal regulations, please refer to the 1Office article below.

1. What is a probationary contract?

A probationary contract is not specifically defined in the law, but according to the provisions in Clause 1, Article 24 of the 2019 Labor Code, it is stated as follows:

“The employer and the employee may agree on the probationary content to be included in the employment contract or agree on the probation by entering into a probationary contract”.

From this regulation, it can be understood that

A probationary contract is an agreement between an employee and an employer regarding a trial period before confirming an official employment position. During the probationary period, both parties must comply with the regulations, terms, and obligations agreed upon in the contract.

2. Essential contents of a probationary contract

The probationary contract form should be presented clearly and include all basic contents to ensure the rights of both the candidate and the business. According to Clause 1, Article 23 of the 2019 Labor Code, a probationary contract must include the following contents:

• Name and address of the employer.
• Employee’s information, including full name, gender, date of birth, residential address, citizen identification card number, or passport number.
• Details of the job to be performed and the workplace location.
• The duration of the probation period as stipulated in the contract.
• Probationary salary, payment method, and payment schedule.
• Regulations on working hours and rest periods.
• Protective equipment that will be provided to the employee.

In addition to the basic elements, a probationary contract may also include clauses on the responsibilities and obligations of both parties throughout the probationary period, as well as regulations on penalties for any breach of the agreement.

3. The latest probationary contract templates

1Office would like to provide you with some probationary contract templates that businesses and employees can refer to and use:

• https://docs.google.com/document/d/1-ykrltYVYlN-RWSzfAGkfKW54bvL9qVkNRchvPDuFC4/edit#heading=h.gjdgxs
• https://docs.google.com/document/d/1R5ukjM27wQ64Codiy-__5RRZpz4asjyNHHTQH-O8I04/edit
• ​​https://docs.google.com/document/d/1dpcTzsfHDV_KHpCgSGGy7skJRdPltVqoYo1PgKsQ1LA/edit

4. Answering some common questions about probationary contracts

4.1. Is it mandatory to sign a probationary contract?

According to Article 26 of the 2012 Labor Code, it is stipulated that:

“The employer and the employee may agree on the probation, the rights, and obligations of both parties during the probationary period. If there is an agreement on probation, the parties may enter into a probationary contract.”

This indicates that signing a probationary contract is not mandatory. The business and the employee can negotiate and clarify the terms of the probationary process through direct discussion, and then decide whether or not to sign a probationary contract. This decision is based entirely on mutual agreement between the two parties.

For example, if a business hires a Marketing employee with relevant experience and wishes to sign an official contract immediately, skipping the probationary period, then signing a probationary contract is unnecessary in this case.

4.2. Is a probationary contract considered an employment contract?

According to regulations, the probationary period is not counted as actual working time at the company. This means that seniority is only calculated once the employee signs an official employment contract. Therefore, a probationary contract is not an employment contract. A probationary contract is essentially an agreement between the employee and the business for a trial period in a job position that both parties have agreed upon.

4.3. How is the salary for a probationary employee regulated?

Another important factor that candidates are often concerned about is the probationary salary. According to Article 26 of the 2019 Labor Code, the salary during the probationary period is agreed upon by the employee and the employer. However, the probationary salary must not be less than 85% of the official salary for that job..

If the employee works for a business in a region with a regional minimum wage, the probationary salary must not be lower than the regional minimum wage and must be at least 7% higher than the regional minimum wage for jobs that require vocational training or education.

Suppose in 2024, you work for a business in Region I, where the official salary is 10,000,000 VND/month and your job has undergone vocational training. In this case, your probationary salary will be calculated in the following two ways:

• Case 1: Based on the official salary, the probationary salary will be 85% x 10,000,000 VND = 8,500,000 VND.
• Case 2: Based on the regional minimum wage, with the 2024 regional minimum wage being 4,960,000 VND, the probationary salary must be at least 7% higher than the regional minimum wage: 107% x 4,960,000 VND = 5,307,200 VND.

If a candidate achieves good results during the probationary period, additional agreements on revenue bonuses should be made to encourage work performance.

4.4. What is the maximum probationary period? Can it be extended if the probation results are unsatisfactory?

Each business may stipulate a different probationary period, but it must comply with the provisions of the Labor Code, specifically as follows:

• The probationary period does not exceed 180 days for management-level positions, as stipulated by the Law on Enterprises and the Law on Management and Use of State Capital Invested in Production and Business.
• The probationary period does not exceed 60 days for jobs requiring a professional or technical qualification from a college degree or higher.
• The probationary period does not exceed 30 days for jobs requiring an intermediate professional or technical qualification, professional staff, or technical workers.
• The probationary period does not exceed 6 days for other job groups.

The specific probationary period for each business may vary and is often determined based on the candidate’s experience and qualifications. Therefore, qualifications and experience are important factors for businesses to assess the probationary period.

Businesses need to publicly disclose the probationary period and agree directly with the candidate to ensure mutual consent.

In principle, each candidate is only allowed one probationary period for a specific job position. Therefore, the company is not allowed to extend the probationary period again. If you successfully meet the requirements in the first probationary period, the company must sign an official labor contract with you. Conversely, if the company finds you unsatisfactory, they have the right to refuse to sign a labor contract.

4.5. What are the benefits for probationary employees? Are probationary contracts eligible for social insurance contributions?

According to the 2019 Labor Code, personnel during the probationary period are entitled to the following benefits:

• Receive a salary of at least 85% of the official salary, but not lower than the regional minimum wage.
• Be entitled to allowances related to hazardous, dangerous, or strenuous work and other support as stipulated by the company and current laws.
• The probationary period will be counted towards annual leave if the employee continues to work for the business after the probation.

According to Article 4, Article 13, and Article 17 of Decision 595/QD-BHXH, employees during the probationary period are not subject to social insurance (SI) contributions.

4.6. Do employees get a raise after the probationary period ends?

When the probationary period ends and the employee meets the requirements, the employer must sign an official labor contract and pay 100% of the agreed salary. During the probationary period, both parties have the right to terminate the probationary contract without prior notice, and no compensation is required if the probationary work does not meet the agreed-upon requirements.

Therefore, an employee’s salary after the probationary period may be higher than or equal to the probationary salary, depending on their conditions and abilities.

4.7. How to resign during the probationary period? How much notice is required?

After the probationary period ends, the employer is obliged to inform the employee of the results. If the employee meets the requirements, the business will continue to implement the signed labor contract or sign a new one. Conversely, if the employee does not meet the requirements, the labor contract or probationary contract will be terminated.

Both the employer and the employee have the right to terminate the probationary contract or the signed labor contract during the probationary period without prior notice or compensation.

4.8. What to do if the company does not return original degrees during the probationary period?

According to the provisions of the 2019 Labor Code, employers are not allowed to keep original documents or papers of employees. Therefore, if your company has kept the original of your college degree, this is a violation of labor law.

In this case, you have the right to cancel the probationary agreement without prior notice and without compensation. If the company does not return your degree and does not resolve the issue, you can file a lawsuit to seek resolution in court.

The lawsuit file includes:

• A petition.
• The probationary contract and related documents.
• A confirmation from a state agency regarding the defendant’s residential and work address.
• The plaintiff’s national ID card.
• Documents proving the case is still within the statute of limitations for filing a lawsuit (if any).
• Documents related to the legal status of the plaintiff, the parties involved, and other related individuals, including licenses, business establishment decisions, business registration certificates, articles of association, decisions on appointment or designation of representatives of the business or organization.
• A list of documents submitted with the petition, clearly stating the number of originals and copies.

5. How to manage probationary contracts in a business

Managing probationary contracts can be done using various methods depending on the company. Typically, the HR department will store contract files in a filing cabinet and track important information like expiration and renewal dates on Excel. However, this method can lead to confusion, errors, and forgetting contract deadlines or the transition from probation to an official contract.

To overcome these issues, an effective solution is to use human resource management software. Human resource management software 1HRM, developed by the 1Office team, is the ideal tool to help businesses manage contracts and HR databases scientifically and effectively.

Key features of 1HRM include:

• Supports automatic contract generation, saving time and minimizing the risk of human error.
• Easily stores and manages hundreds of thousands of employee records.
• Manages and tracks probationary and official contracts.
• Manages information related to employee insurance matters.
• Integrates and automates payroll processes and compensation policies.
• Tracks and manages information on employee leave and overtime compensation.
• Systematically stores and manages HR-related decisions

Interested HR professionals and managers can find more information and register here to receive a consultation and experience a software demo.

6. Conclusion

The above are the important legal regulations regarding probationary contracts that you need to be aware of before signing and implementing them. Businesses should refer to standard probationary contract templates to create a contract suitable for their organization. Additionally, the management of probationary contracts must be carried out meticulously to protect the rights of both parties and avoid unwanted legal risks.