Vietnam: Expansion of Employee Rights Proposed

 

By © Herbert Smith Freehills LLP August 2, 2019
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​In May, a draft amendment ("Draft No. 2") to the current Vietnamese labor code was submitted to Vietnam's National Assembly, pending approval in November. If passed, Draft No. 2 would replace the current labor code. Major changes proposed in Draft No. 2 are explained below.

Clarification of Labor Contracts

The definition of "labor contract" is expanded in Draft No. 2 to cover any agreement having contents of scope of work, salary, management, administration and supervision from one side to the other. Labor contracts can be made via instant electronic message (e.g., WhatsApp) or, if for less than one month, verbally. Parties are not allowed to enter into annexes for the purpose of amending the term of a labor contract.

Representative Organizations

Draft No. 2 introduces three key amendments for representative organizations (ROs):

  • Increased employee rights on establishment and participation in ROs, including a general right for employees to join any RO of their choosing.
  • Additional requirements for RO leaders.
  • Clearer objectives regarding the mission, purpose and charter of ROs.

Reducing Discrimination Against Female Employees

Under Draft No. 2, female employees are no longer prohibited from doing specific jobs and instead it is prohibited to assign women "work which has an adverse effect on the ability to bear and raise a child." A definition of sexual harassment in the workplace is also provided, having not been expressly recognized in the labor code.

Employee Rights for Unilateral Termination

An employee may end his or her labor contract under Draft No. 2 by providing the following notice:

  • For an indefinite-term labor contract, 45 workdays.
  • For a definite-term labor contract, 30 workdays.
  • For a seasonal labor contract, three workdays.

Employees may also end their labor contracts without notice under Draft No. 2 if: not assigned to the correct workplace; not paid contractually agreed wages; mistreated, harassed or coerced; or, unable to work because of pregnancy.

Other changes in Draft No. 2 include: an increase in maximum overtime hours from 300 to 400 hours per year; an increase in the retirement age from 60 to 62 years for men and 55 to 60 years for women; and, the inclusion of one public holiday for the Vietnam War (bringing the total number of public holidays to 11).

Key Takeaways

Employers should keep a lookout for updates on Draft No. 2 that is anticipated to be passed in November and ensure that their employment arrangements are compliant with legislative changes.

Herbert Smith Freehills LLP is a leading global legal services firm with 27 offices worldwide, including offices in Asia. © 2019 Herbert Smith Freehills LLP. All rights reserved. Reposted with permission of Lexology.

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