Impacts of Decree No. 337/2025/NĐ-CP on Electronic Labour Contracts

The Government’s promulgation of Decree No. 337/2025/ND-CP (“Decree 337”) on electronic labour contracts marks an important milestone in the ongoing process of completing the legal framework for digital transformation in the labour sector. The Decree not only introduces a legal mechanism governing a new form of contract formation, but also reflects a shift in the State’s regulatory approach toward greater reliance on data and digital platforms in the governance of labour relations.

In the context of accelerating administrative reform and the strong promotion of a digital government, a comprehensive assessment of the impacts of Decree 337 is necessary from multiple perspectives, including legal implications, corporate governance considerations, and the protection of employees’ rights and legitimate interests.

1. Electronic labour contracts: an encouraged, not mandatory, policy

One point that should be clearly emphasized is that Decree 337 does not impose an obligation to convert all labour contracts into electronic form. Under the current legal framework, both written (paper-based) labour contracts and electronic labour contracts continue to be recognized in parallel, with equal legal validity.

This approach demonstrates the legislator’s prudence in light of the significant disparities in technological infrastructure and digital skills among different groups of enterprises and employees. By limiting the policy to an “encouragement” rather than a mandatory requirement, the regulation allows the market sufficient time to adapt, while avoiding excessive compliance pressure on small and medium-sized enterprises.

2. A shift in regulatory focus: from internal storage to centralized digital platform–based management

A notable innovation introduced by Decree 337 is the establishment of a mechanism for managing electronic labour contracts through a platform organized and operated by a state authority. Accordingly, once an electronic labour contract is executed, it must be transmitted for recording and assigned an identification code (ID), thereby becoming part of a unified management database.

This approach reflects a transition from the traditional model of “enterprise self-retention and self-responsibility” toward a data-driven, centralized management model. In essence, an electronic labour contract is no longer merely a bilateral agreement between the parties, but also an object of administrative management.

Such a mechanism enhances the State’s capacity for supervision, verification, and data exploitation for regulatory purposes, while also helping to prevent fraudulent practices relating to the timing of contract execution or the legal status of labour contracts—issues that have historically posed challenges in labour inspections and dispute resolution.

3. Enhanced identity authentication requirements and legal accountability of signatories

Another notable feature of the Decree is the elevation of authentication standards for the execution of electronic labour contracts. The linkage of the signing process with electronic identification methods and biometric authentication reflects a regulatory trend toward strengthening the connection between an electronic signature and the actual legal subject behind it.

This requirement plays a significant role in reinforcing the principle of non-repudiation in electronic transactions. The signatory — in particular, the enterprise’s legal representative — must personally carry out the authentication process, thereby clearly establishing individual legal responsibility for the contents of the contract.

From a corporate governance perspective, this requirement compels enterprises to revise their internal procedures, limiting uncontrolled delegation or the purely formal use of digital signatures. At the same time, it imposes higher technical standards on providers of electronic contracting services, who must ensure compliance with enhanced identification and authentication requirements.

4. Transitional provisions and the treatment of existing contracts

Decree 337 introduces transitional arrangements aimed at maintaining the stability of existing labour relations. Accordingly, electronic labour contracts concluded prior to the effective date of the Decree remain legally valid until their expiry, without the need to be re-executed under the new templates or procedures.

With respect to paper-based contracts, the law does not impose a mandatory obligation to convert them into electronic form. Digitisation is carried out only where enterprises have such demand and must follow prescribed procedures to ensure the integrity and authenticity of the electronic version in comparison with the original hard copy. This approach allows enterprises to proactively assess costs and benefits before deciding whether to digitise their entire archive of labour records.

5. Implications for enterprises: balancing governance benefits and new compliance burdens

On the positive side, electronic labour contracts enable enterprises to streamline human resources processes, shorten execution timelines, reduce storage costs, and minimise the risk of document loss. Standardised and interconnected data may also facilitate the future automation of labour-related reporting obligations, thereby significantly reducing administrative procedures.

However, these benefits come with new costs and compliance requirements. Enterprises must invest in technological infrastructure, pay service fees to electronic contracting service providers, and ensure interoperability among internal management systems. For foreign-invested enterprises in particular, challenges may arise in meeting identification and authentication requirements applicable to their legal representatives.

In addition, personal data protection obligations become a central compliance concern. Labour contracts contain a substantial amount of sensitive personal data; therefore, their processing, storage, and sharing through third-party platforms require enterprises to establish robust internal control mechanisms in line with applicable personal data protection laws.

6. Social impacts and the protection of employees’ rights

From another perspective, Decree 337 has the potential to enhance the level of legal protection afforded to employees. The storage and retrieval of labour contracts on a digital platform enable employees to more easily access information relating to their employment relationships, thereby reducing situations in which contracts are not provided to employees or are lost, as has occurred in practice.

Moreover, authenticated contract data may serve as a convenient basis for employees when carrying out other administrative procedures, such as proving income or employment status.

Nevertheless, challenges related to the “digital divide” remain. Not all employees possess adequate technological resources or digital literacy to use electronic tools safely and effectively. In addition, the collection and processing of biometric data raise heightened requirements for transparency, clear explanation, and informed consent, in order to safeguard privacy rights and prevent potential disputes.

Overall, Decree No. 337/2025/ND-CP should be viewed not merely as a technical instrument governing the execution of electronic labour contracts, but as reflecting a significant shift in the regulatory mindset toward a data-driven and digitalised model of labour relations management.

In the short term, its implementation will inevitably pose challenges in terms of costs, infrastructure, and enforcement capacity. In the long run, however, if applied flexibly and accompanied by an appropriate roadmap, the Decree may contribute to enhancing transparency, regulatory efficiency, and the level of legal protection in Viet Nam’s labour market.

Time of writing: 30/12/2025

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• Essential clauses in an overseas processing contracts
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