On December 14, 2020, the Government issued Decree 145/2020/ND-CP guiding the Labor Code on working conditions and labor relations. Accordingly, this Decree provides for the settlement upon invalidation of labor contracts as follows:

• For partially invalidated labor contracts: When the labor contract is declared to be partially invalid, the employer and the employee proceed to amend and supplement the part of the labor contract which is declared invalid in accordance with the labor agreement collective action and law. In case the two parties do not agree to amend and supplement the contents which have been declared invalid, the labor contract shall be terminated;
• For a labor contract which is completely invalidated, the settlement method is as follows:

• The labor contract is completely invalid because the person concludes the labor contract or violates the principle of entering into the labor contract: When the labor contract is declared null and void, the employee and the employer re-sign the labor contract in accordance with law. In case of not re-signing the labor contract which is declared to be totally invalid, the labor contract shall be terminated;
• The labor contract is completely invalid because the entire contents of the labor contract violate the law or the work entered into the labor contract is prohibited by law: When the labor contract is declared totally invalid, the the employee and the employer sign a new labor contract in accordance with the law. In case the two parties do not sign a new labor contract, the labor contract shall be terminated.

This Decree takes effect from February 1, 2021.