Elderly employees

As prescribed in Article 166 and Article 187 of the Labor Code, an Elderly Employee is a person who continues to work after 55 years of age for females and 60 years of age for male. Currently, due to the characteristics of some occupations, the employer wants to enter into, or continues to perform, the labor contracts with this subject. The question is that under current labor laws, whether there are any limitations or specific policies which are applied to employers when using elderly employees. This article would like to summarize the legal regulations and issues that employers should pay attention when entering into labor relations with this subject.

1. Labor contract with elderly employees

As prescribed in Article 186 of the Labor Code and Article 6 of Decree 05/2015/ND-CP dated 12 January 2015 providing details and guidance on the implementation of a number of contents of the Labor Code (“Decree 05”), when an employer has demand for recruitment and elderly employees are in good health under the law, the two parties may agree to extend the term of the labor contract or enter into a new labor contract.

An important point is that employers should note that the labor contract, including indefinite-term labor contract, will only be terminated if the employee meets both conditions for compulsory social insurance contribution and retirement age in accordance with the labor laws. To further clarify, in case the employee has enough time to contribute social insurance premiums and reach retirement age, the labor contract between the employer and the employee shall be obviously considered to terminate in accordance with the Article 36.4 of the Labor Code and then the employee is considered to be pensioner because they meet the conditions prescribed by the Law on Social Insurance.

Accordingly, when an employer has demand for recruitment and elderly employees are in good health under the conclusions of healthcare establishments established and operated under the provisions of the law, both parties shall agree to extend the term of labor contracts or enter into the new labor contracts; and the work agreed in the new labor contract with elderly employees shall not be heavy or dangerous jobs or jobs exposed to toxic substances that adversely affect their health.

With the elderly employees who are old enough to retire but have not yet contributed enough compulsory social insurance premiums to be enjoyed their retirement pensions as prescribed, and both parties wish to continue working, based on the above-mentioned regulations, the employer and employee may agree to enter into new labor contracts. However, an important rule stated in Decree 05 (Article 6.2) provides that when the employer does not have demand for recruitment or elderly employees’ health are not well enough, neither of these reasons is considered the to unilaterally terminate the labor contract by either employer or employee under the applicable laws.

With the above in mind, in case the company does not have demand for recruitment or elderly employees’ health are not well enough, the employer must negotiate and agree with the employee on the termination of the labor contract as stipulated in Article 36.3 of the Labor Code. In other words, the employer must obtain the consent of the elderly employees to terminate the labor contract.

Under the applicable Labor Code, there is no specific provision with respect to type of labor contract which employer is entitled to enter into with elderly employees. According to Article 22.3 of Labor Code: “It is prohibited to sign a seasonal or specific labor contract for a term of less than twelve (12) months in respect of work which is regular and has a duration of twelve (12) months or more, except to temporarily replace an employee who has taken leave of absence for military obligation, is on maternity leave or sick leave, is on leave as the result of a work-related accident, or is on leave for other temporary reasons”. Accordingly, depending on the nature of work, employer could enter into an appropriate type of labor contract with elderly employees.

In addition, the Labor Code does not provide the specific time to terminate the labor contract but providing only as follows: “If the employers have not demaned or the the elderly employees’ health are not well enough, both parties terminate the labor contract”. Based on this spirit, where the elderly employees’healh are not well enough to continue working or employer has no longer demanded for employment, both parties could implement to terminate the labor contract as mutually agreed.

In the context of such current legislation , in order to ensure compliance with the laws and limit risk of employee’s health issuesduring working time, employer and elderly employees may enter into an Appendix where the elderly employee is working or sign a definite –term labor contract with a term of 12 months.

2. Social Insurance

The elderly employee, who has not eligible for retirement pension and has been working under labor contract, their contribution to social insurance, health insurance and unemployment insurance shall be implemented as other employees. Namely:

No. Type of insurance Employer Employee
1. Social insurance 17% 8%
Insurance of work-related accident, occupational disease 0.5% 0%
2. Health insurance 3% 1,5%
3. Unemployment insurance 1% 1%
   Total  21.5%  10.5%


3. Other obligations:

The elderly employee who is one of the special employees having the following preferential treatment for health as provided in labor laws, including:

a. Getting medical check-up at least twice a year (Article 152.2 of Labor Code);

b. Reducing the number of working hours in a day or having the regime of part-time work (Article 166.2 of Labor Code).

Although the current labor law does not provide for how many working hours may be reduced when the labor contract with elderly employee continuously implemented. Nevertheless, according to Article 3.10 of Decree 45/2013/NĐ-CP dated 10/05/2013 stipulating a number of articles of the Labor Code on working hours, hours of rest, occupational safety and hygiene, with respect to the elderly employees, the working hours shall be shorten daily for  at least one (01) hour in the last year prior to retirement. Based on that, employer may refer and consider the working time of elderly employee to ensure the health and legitimate rights of elderly employees.

LuatViet hopes that this article provides companies and employees to have further general knowledge of labor regulations to solve its relevant issues.