Keep Up to Date with the Changes from the New Vietnam Labour Code
The Vietnam Labour Code 2019 will officially replace the Vietnam Labour Code 2012 and come into effect on the 1st January 2021. These new changes will have a direct impact on the obligations and rights of both employers and employees, so it is crucial for any business owner with operations in Vietnam to know about the changes.
Key Highlights & Changes from Vietnam Labour Code 2019:
Forms of Employment Contract
- Employment Contracts in the form of electronic data in accordance with electronic transaction laws will be recognised the same as physical contracts.
- Employers and employees can only conclude an oral contract with terms of less than 1 month. Exception:
- Signing an employment contract with a group
- The employee under 15 years old or a helper
Types of Employment Contract
are only two types of contracts:
- Indefinite term labour contracts
- Definite term labour contracts of 36 months or less
(*Seasonal or specific jobs with a duration of under 12-months will be included indefinite-term labour contract)
- Requesting an employee to make a cash or property as security for their employment contract.
- Forcing an employee to keep performing the employment contract to pay debt owed to the employer.
Annex to Employment Contract
- Any annex to the employment contract must not change the duration of the contract.
- Both parties can now sign a separate probation agreement or include a probation clause can into the employment contract.
- The probationary period for executive positions of enterprises can now reach up to 180 days.
- Probation is not permitted if the employee works under an employment contract with a duration of less than 1 month.
- Foreigners who marry a Vietnamese citizen and reside in Vietnam will be exempt from a work permit.
Unilateral Termination of Employment Contract
contracts can be unilaterally terminated by an employer if:
- The employee reaches retirement age
- The employee provides falsified information during the conclusion of the employment contract
- The employee is absent from work for 5 consecutive working days without plausible reason
- Employees can terminate employment contracts without reason but must serve the required advance notice period.
Payment Responsibilities Upon Termination
- Employers are now required to pay termination benefits of 14 working days (previously 7 working days).
- Employers are responsible for providing copies of documents relating to the working period of the employee upon request.
- If salaries are paid by bank transfer, the employer must pay the costs of account opening and transfer.
- In the case where the employee is not able to receive their salary directly, the employer may pay it through a person authorised legally by the employee.
- Employers must not restrict or interfere with the employee’s spending of their salaries.
- Employers are required to set up a salary scheme/scale and discuss it with employee representative organisations (if any). However, enterprises are not required to send the scheme/scale to district level labour department.
- The monthly overtime cap has been increased from 30 hours to 40 hours.
- Employees will receive 2 days off for National Independence Day instead of 1.
- The retirement age for men will gradually increase to 62 and 60 for women. 3 months will be added every year to the current retirement age for men and 4 months for women until the new retirement age is reached. For 2021 the retirement age for men will be 60 years and 3 months, while for women it will be 55 years and 4 months.
- Employers with fewer than 10 employees are now required to have internal labour regulations.
- Sexual harassment must be included in the internal labour regulations and is now defined as a legal ground for dismissal.
*This information intended as a general guide, for more details please visit the government website or contact us now!
Keep Up to Date with the Latest Labour Law Updates
Labour laws are constantly changing in countries across Asia-Pacific and business leaders need to keep up to stay compliant with regulations. To learn more about the Vietnam Labour Code 2019 contact our professional team now or if you would like to know more about the latest labour law updates around the Asia-Pacific region, download our APAC Legislation Comparison Chart for free now!
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