Source of the Case: Precedent 20 – Case No. 01/2017/LD-GDT

Overview:

After probation, if an employee continues to work without a contract with the employer, this circumstance shall be determined that the two parties concluded contractual labor relations.

Material Facts:

On 09 September 2013, L Liability Limited Company – Supermarket L – Branch B (“L LLC”) hired Tran Cong T (“T”) as head of a non-food department in which L LLC and T entered into a probation contract with the probationary period of 60 days. After probation, T stayed on to work for L LLC without an employment contract. On 29 December 2013, L LLC unilaterally terminated the employment contract, then T sued, alleging breach of the Labor Code 2012. The Trial Court found in favor of L LLC. The decision was then affirmed by the Court of Appeals. Eventually, the case was brought to the Supreme Peoples’ Court of Cassation (“Court of Cassation”). The Court of Cassation finally decided for T, not appealable.

Judicial Reasoning and Legal Application:

The Court of Cassation found that there was no employment contract, but that L LLC had made a promise upon which L LLC relied upon, with good will to give T an opportunity to improve his performance.

Based on this fact and its reading of applicable law, Article 27.1 of the Labor Code 2012 regulates:

“The probationary period shall be determined on the basis of the nature and complexity of the work and shall be applied only one time for each employment and must satisfy the following conditions:

1. The probationary period shall not exceed 60 days in respect of work which requires technical qualification of technical college diploma and above.”

Otherwise, the corresponding recognition of L LLC itself that “T was officially de facto employed with the duration of 12 months after the termination of the probationary period”, the Court of Cassation concluded that L LLC and T together established contractual labor relations, even if T was not hired by L LLC with a written employment contract. This is the answer for any argument arising as to how a probation contract become an employment contract.

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