Probation and Probation Terms in Vietnam

Probation is a period when both sides “observe” each other: the company verifies actual competence, and the employee assesses whether the working environment fits. It sounds simple, but probation is one of the biggest sources of disputes — from how probation salary is calculated, to the right to stop midway, to whether the company must pay social insurance for probationers.

The Labor Code 2019 devotes Articles 24 to 27 to probationary work, in the spirit of ensuring voluntariness and transparency for both sides. This article analyzes each probation condition from a practical HR management perspective.

Probation Is a Right of Both Parties

Many managers view probation as a company “privilege”: the company sets the terms, the employee accepts or leaves. The law does not see it that way. Probation is a voluntary agreement — the employee also has the right to evaluate the company and proactively stop if it does not fit, without compensation beyond notice as agreed.

The right approach is to treat probation as a full two-way agreement: the company pays the agreed salary and ensures working conditions; the employee performs the work and follows internal rules. When both sides recognize this two-way nature, the probation period becomes more transparent with fewer complaints.

The Golden Rule: One Job, One Probation

Article 24 allows the probation agreement to be recorded in the employment contract or in a separate probation contract, with the most important principle: probation is allowed only once for one job.

In practice, many companies “work around” this by imposing a second probation under a renamed position with unchanged actual work, or by chaining a new probation contract after the old one expires. In disputes, the resolving body examines the actual nature of the work, not its title. If the probation is found unlawful, the company may have to recognize a formal employment relationship from the start of the second probation, with corresponding salary and insurance obligations.

Maximum Probation Periods by Job Group

Article 25 sets probation ceilings for four groups: no more than 180 days for enterprise managers; no more than 60 days for jobs requiring college-level professional or technical qualifications or higher; no more than 30 days for intermediate-level, technical worker and professional staff jobs; no more than 06 working days for other jobs.

These are maximum ceilings, not default periods — companies may agree on shorter periods, and in many cases should. A probation period disproportionately long for the nature of the work not only costs management resources but also creates anxiety for talented employees, pushing them toward employers with clearer policies.

Probation Salary: The 85% Floor

Article 26 provides that probation salary is agreed by the parties but must be at least 85% of the salary for that job — i.e., the salary the employee would receive when working officially in that position, not the regional minimum wage or the company average.

Disputes often arise over the 85% base: if the salary structure combines base salary with allowances, 85% of which total? Best practice is to state the specific monetary salary in the probation agreement, with the calculation referencing the position’s official salary. Writing vaguely “85% of the official salary” without defining what the official salary is leaves room for disputes.

What the Probation Agreement Should Cover

Whether recorded in the employment contract or in a separate probation contract, the agreement should include: the name and description of the probationary job; the specific probation period; salary level and calculation method; performance evaluation criteria; each party’s rights and obligations; and how results are communicated.

Of these, evaluation criteria are most often skipped yet most decisive in disputes. “Unsatisfactory performance” is a subjective judgment without pre-agreed measurable criteria. Companies should build a criteria table for each position — minimum output, output quality, discipline — and communicate it to the employee at the start of probation.

End of Probation: Pass and Fail

Article 27 requires the employer to notify the employee of the result at the end of probation. If the requirements are met, the parties continue performing the concluded employment contract (where probation was recorded in the contract) or conclude a new employment contract (where only a separate probation contract was signed).

If not met, both parties terminate the concluded contract or the probation contract without prior notice and without compensation — a fundamental difference from termination of a formal employment contract. Although the law does not rigidly prescribe the notification form, companies should notify in writing with an evaluation record signed by the direct supervisor.

Cancelling the Probation Agreement Midway

During probation, each party may cancel the agreement without prior notice and without compensation. The condition “failure to meet the agreed requirements” relates to result evaluation at the end of the probation period (Article 27) — when the employer notifies the result and does not continue contracting if the employee fails; the right to stop midway during probation belongs to each party unconditionally. The employee may leave midway if the job does not fit; the company may not impose sanctions such as breach penalties or claims for recruitment costs.

For the company, stopping early upon discovering the probationer is unsuitable saves costs for both sides. However, a mid-probation stop should still rest on documented evaluation, recorded in writing, to avoid claims of discrimination or arbitrary termination.

Probation and Social Insurance: Points to Clarify

This is the most confusing issue in practice. Under the common interpretation, a standalone probation contract is not an employment contract, so probation under a separate probation contract does not trigger mandatory social insurance participation. But if probation is recorded directly in the official employment contract, insurance obligations are assessed under that contract.

The Law on Social Insurance 2024 (No. 41/2024/QH15, effective from 01/7/2025) remains the basis for determining mandatory participants, including persons working under employment contracts of full 01 month or more. The specific application to each probation model may differ depending on the interpretation of the local social insurance authority. Since practice is not fully uniform, companies should consult the social insurance authority where registered or seek legal advice before deciding, rather than assuming probation automatically means no contributions.

Probation for Foreign Employees

Foreigners working in Vietnam may agree on probation like Vietnamese workers, but it must be placed within the overall foreign labor procedures. Under Decree 219/2025/ND-CP, foreigners working as managers, executive directors, experts or technical workers who require a work permit must complete this procedure before starting official work.

Companies must plan so the probation period does not overlap riskily with the permit waiting time: having a foreigner “on probation” that is substantively official work while lacking a permit is punishable. The safe approach is to complete the work permit first, then start counting the probation period.

Common Mistakes That Make Companies Lose Cases

From dispute resolution experience, FLAT LAW FIRM notes recurring mistakes: no written document on probation, so that in disputes each side tells a different story about the agreed period and salary; probation exceeding the statutory ceiling while the employee keeps working without a formal contract being signed; an “unsatisfactory” assessment with no criteria or evidence presented.

Others: applying probation twice for the same job under different titles; deducting salary or fining probationers for internal rule violations — remember that monetary fines and salary deductions in place of disciplinary action are prohibited, and for probationers the company has even less basis to apply them arbitrarily.

A Standard Probation Process for HR

A proper process includes: completing the written probation agreement before the employee’s first working day; on the first day, the direct manager clearly discusses evaluation criteria and expectations, with minutes or a confirmation email; during probation, monitoring and recording periodically and giving feedback on improvement points instead of waiting until the last day to evaluate.

At least a few working days before expiry, complete the final evaluation based on the agreed criteria; notify the result in writing — if passed, sign the official employment contract and complete insurance procedures; if failed, terminate per the agreement and pay in full. This process ensures compliance while creating a professional impression that helps retain good people.

FAQs on Probation