Points to note when signing a contract with an intern
- Ho Thi Y NhiI
At most universities in Vietnam, “internship” is one of the graduation requirements, and companies find, train, and sometimes hire interns. Therefore, it is very common for companies to accept students and have them work as interns at companies. However, the current law does not have any specific provisions regarding contracts between intern students and companies. In this article, we will divide the contract into three cases and explain the appropriate contract form and considerations for each case.
An internship is an opportunity for students studying at university to work at a company as an intern and perform the necessary tasks in order to gain exposure to actual work sites and gain experience in applying the knowledge learned at school to actual work. Refers to piling up. Companies also often recruit interns. For example, find suitable candidates for employment by interacting with students who are actually considering an internship at university, develop human resources during the internship period to be officially hired in the future, and receive support for company operations. We recruit interns for a variety of purposes, such as having them work as temporary workers for a variety of purposes. Therefore, appropriate contract forms are required depending on each purpose. The above three cases will be explained below.
1. Internship agreement
If the main purpose of accepting an intern is based on Article 93, Paragraph 1, a1 of the 2019 Education Act (if the purpose is to fulfill social responsibilities such as establishing internship conditions and supporting schools and students)(*1), It is necessary to conclude an internship agreement based on civil law (not covered by labor law).
When concluding an internship agreement, the following points should be kept in mind.
- -Since the internship agreement is not a labor contract, interns do not have the same responsibilities and obligations as other employees.
- -Since an “internship” is that a company supports a student, there is no obligation to pay the intern a salary during the internship period. However, it is possible to pay for internship support, gasoline, lunch, etc. However, to avoid any suspicion that a labor contract exists with the intern, the company should avoid using the word “salary” when paying these fees.
- -If you want to restrict access to confidential company information, you need to include information security in your agreement or sign a separate non-disclosure agreement (NDA).
- -Companies are not obligated to hire interns after the internship period ends, and interns are not necessarily required to work at the company after the internship period ends. After the internship period ends, if the company wishes to hire you, you will need to propose employment and form a labor contract just like regular candidates.
- -The content of work to be performed during the internship period must be clearly stated in the internship agreement.
2. Vocational training contract
When accepting interns for the purpose of formal employment after the internship period ends, Article 61, Paragraph 2(*2) of the Labor Law applies, and a vocational training contract must be concluded.
The difference between the “internship agreement” and the “vocational training contract” mentioned in the previous section is whether or not there is a purpose for employment after the internship period ends. In this case, the company is allowed to make the intern commit to forming a labor contract with the company after the internship period ends. Furthermore, after the internship period ends, if the intern meets the conditions set by the company, the company is obligated to form a labor contract with the intern.
Article 61 of the Labor Law 2019 and Article 39 of the Vocational Education Law 2014 stipulate that vocational training contracts must include the following:
- a) Name of vocational training or required vocational skills
- b) Place of vocational training
- c) Duration of vocational training
- d) Cost of training provided by the company and how to pay for it (if applicable)
- e) Liability of both parties to compensate for damages if a breach of contract is discovered.
- f) Settlement of the contract
- g) The company’s commitment to fully support the intern during the vocational training period.
- h) Company commitment to hire workers after graduation
- i) Agreement on salary when involved in the company’s product manufacturing activities during the vocational training period
- j) Other promises to comply with laws and social ethics.
Additionally, when signing a vocational training contract, the following points should be kept in mind:
- -Vocational training period must be up to 3 months.
- -Work rules and company internal rules also apply to interns. In addition, based on labor laws, companies must ensure that interns have the same rights as other full-time employees, such as by providing regular health checkups.
- -If you want to restrict access to confidential company information, you need to include information security in your contract or sign a separate NDA.
If a company accepts an intern for the main purpose of “having the intern work as a temporary worker to support the company’s operations”, it is considered to have an employment relationship with the intern. Therefore, the company must form a labor contract with the intern, and the intern will have the same duties and responsibilities as other full-time employees.
When forming a labor contract with an intern, it is necessary to pay attention to the following points.
- -Companies can form short-term labor contracts with interns. However, the maximum number of times a worker can conclude a labor contract is two, and from the third time onwards, the contract must be an indefinite term contract.
- -Companies must fulfill all obligations to interns in accordance with the regulations of the labor council, such as paying salaries, participating in social insurance, and granting annual leave.
In this article, we have explained the format and points to keep in mind for general contracts exchanged between companies and interns. Depending on the purpose of accepting interns, companies need to consider the appropriate contract form. In practice, many companies do not sign labor contracts with interns due to cost considerations. However, Vietnam’s labor market is highly competitive, and many companies want to discover talented people from interns, so hiring interns is considered to be a great opportunity for companies. We hope that this article will help you with hiring interns.
*1 Article 93, Clause 1 a of the 2019 Education Law: The company is responsible for supporting and cooperating with schools to organize educational and scientific research activities, and does not allow teachers and students to visit the company, experience activities, and practice., it is necessary to create the conditions for conducting scientific research.
*2 Labor Law Article 61, Paragraph 2: Vocational training for working under an employer means that an employer recruits a person to provide training and vocational training in accordance with the job.
*This article was translated by Yarakuzen.