In an earlier bulletin, we considered proposed amendments to the Vietnamese Labour Code which were pending approval in November 2019. The National Assembly of Vietnam has since approved amendments to the Labour Code. The amendments will be effective from 1 January 2021. Key amendments to the Labour Code are discussed below.
Broadened definition of employee
The definition of an employee has been expanded to cover any person who has a job, is paid for the job, and is working under the employer's supervision. This closes the gap and ensures all employees are afforded the same protection.
Form of labour contract
Electronic labour contracts will be valid as long as the legal requirements in relation to electronic transactions have been satisfied.
Definite term labour contracts must have a term of 36 months or less and parties are not allowed to enter into annexes for the purpose of amending the term of a labour contract. A definite term contract may only be renewed once: thereafter, the employer must convert the employee to a permanent contract if they are to continue working.
Representative organisations ("ROs")
Employees are able to set up their own ROs with the new amendments. ROs established by employees will be recognised as part of employee ROs at the grassroots level, eliminating the need for employers to consult with the intermediate upper level trade union prior to amending internal work rules and policies.
Additional grounds for employers to effect a unilateral termination have been introduced in the amendments to the Labour Code. The additional grounds are:
- if an employee provides false information for the purposes of recruitment;
- if an employee is absent from work for 5 consecutive working days without a valid reason; and
- if a foreign worker's permit has expired or if the foreign worker is expelled by court judgments/decision.
Employees also have new rights to terminate the employment immediately where the employer fails to pay salary or commits a pregnancy related breach.
Overtime and public holidays
The maximum number of overtime hours that an employee can perform in a month will increase from 30 hours to 40 hours per month. The working hours remain at 48 hours per week and overtime may not exceed 12 hours a day or 200 hours a year. There will also be an additional public holiday to commemorate National Independence on 2nd September.
Increase in retirement age
The retirement age will be increased from 60 to 62 years for men and 55 to 60 years for women.
These are significant changes to Vietnam's labour code and suggest an intention for Vietnam to move closer to international standards. Employers should review their policies and internal labour regulations to ensure that they are compliant with the new amendments.