There are two types of labor contracts under Article 20 of the 2019 Labor Code, specifically:
- Indefinite-term labor contract. This is a contract in which the parties do not determine the term or the time of termination of its validity.
- Definite-term labor contract. This is a contract in which the parties agree on a fixed term, with the time of termination of its validity not exceeding 36 months from the effective date of the contract.
Notes for enterprises: When a definite-term labor contract expires but the employee continues working, the following rules apply:
- Within 30 days from the date of expiry of the definite-term contract, the parties must enter into a new labor contract. Pending the execution of a new contract, the rights, obligations, and interests of both parties shall continue to be governed by the expired contract;
- If, after 30 days from the date of expiry of the definite-term contract, the parties fail to enter into a new contract, the expired definite-term contract shall automatically convert into an indefinite-term labor contract;
- Where the parties enter into a new contract which is still a definite-term labor contract, they may only do so once more. After that, if the employee continues to work, the parties must enter into an indefinite-term labor contract, except for labor contracts with persons hired as directors of enterprises with state-owned capital, and except in the cases provided in Clause 1 Article 149, Clause 2 Article 151, and Clause 4 Article 177 of the 2019 Labor Code.
Accordingly, compared with the 2012 Labor Code, only two types of contracts remain in effect as above. To prevent enterprises from entering into other forms of contract in order to avoid the obligation of paying social insurance, the 2019 Labor Code has abolished the provision on seasonal labor contracts, thereby protecting the legitimate interests of employees and preventing disadvantages in labor relations.
