Probation Period: Crucial Notes for Enterprises and Employees

Understanding the legal framework of probation is essential to avoid labor disputes. The following article from Jurion & Partners provides a comprehensive guide to resolve all concerns regarding this legal process.

I. What is probation?

According to Article 24 of the Labor Code 2019, a probation period is an agreement between a worker and an employer regarding trial work, as well as the rights and obligations of both sides during the trial period.

Key legal characteristics:

• Form of agreement: Parties can conclude a separate probation contract or include probation contents within a labor contract.
• Exemptions: Probation does not apply to workers who sign a labor contract with a duration of less than 01 month.
• Frequency: An employer can only apply probation one time for a single job position.

II. What should an enterprise note?

To ensure legal compliance and optimize human resource management, an enterprise must pay close attention to the following three factors:

Maximum probation duration

The Labor Code 2019 specifies time limits based on the nature and complexity of a job:

• No more than 180 days: For the position of enterprise manager as defined by the Law on Enterprises.
• No more than 60 days: For jobs requiring a professional or technical qualification of junior college level or higher.
• No more than 30 days: For jobs requiring an intermediate professional or technical qualification, or for technical workers and professional staff.
• No more than 06 working days: For other types of work.

Probation salary

The agreed probation salary must meet the statutory minimum of 85% of the salary for the relevant job. Review the compensation components and written terms rather than assuming that every allowance is excluded.

Conclusion of the trial period

When the probation period ends, the enterprise must notify the worker of the results:

• Satisfactory results: The employer must continue to implement the signed labor contract or sign a new labor contract.
• Unsatisfactory results: The employer has the right to terminate the probation agreement without prior notice at any point during the probation period and without paying compensation.

III. What should an employee note?

To protect their own interests when entering a new environment, workers should remember these regulations:

The right to unilateral termination

During trial periods, probation worker has the right to cancel a probation agreement without prior notice and without paying any compensation if the job is not suitable or the employers fails to fulfill their initial commitments.

Social Insurance (SI) issues

• For a separate probation arrangement, check whether it is genuinely a probation contract or is legally an employment contract despite its label. The applicable compulsory-insurance position should be assessed from the actual contract and working relationship.

• Where probation is included in an employment contract, assess insurance participation under the relevant scheme, contract and worker-specific conditions. Do not assume that the word probation alone establishes either universal coverage or an exemption.

Salary and allowances

Ensure that the probation salary is not lower than 85% of the official salary. Furthermore, agreements regarding allowances (lunch, transport) should be clearly stated in the document to prevent future disputes.

IV. Reviewing the proposed probation arrangement

A lawyer can review the job category, proposed duration, pay, contract form and end-of-probation process. Bring the signed documents, actual start date, performance records and payroll evidence if a disagreement has arisen. Insurance participation should be assessed under the scheme and worker-specific conditions rather than inferred from the probation label alone.