Amended Labor Code 2019: new outstanding regulations

On 20th of November 2019, Nation Assembly has ratified the Amended Labor Code 2019, including 17 chapters, 220 articles, which will enter into force on 1st of January 2021 with the following remarks:

amended labor code 2019: new outstanding regulations

1. AMENDMENT RELATING TO LABOR CONTRACT:

i. Broadening the scope of regulation and subjects of application of the Labor Code to employees without labor relations

According to new regulations, others agreements, which are not named as a labor contract, but demonstrate the contents of job descriptions, wage and the management, control, supervision of one party, shall be determined as a labor contract.

ii. A labor contract could be executed by mean of electronic media

A labor contract, which is executed by mean of electronic media in the form of a data message in accordance with Law on E-transactions, shall be considered as a labor contract in written form.

Accordingly, in addition to the regulations of the Labor Code, the parties stipulated in a labor contract must ensure compliance with Article 35, 36, 37 of Law on E-transactions 2005.

iii. Repealing the provision of the seasonal labor contract

The Amended Labor Code 2019 regulates that a labor contract must be executed in one of the two following forms: an indefinite-term labor contract or a definite-term labor contract. In details, an indefinite-term labor contract is a contract, in which the two parties do not determine the duration and the time of termination of the contract. A definite-term labor contract is a contract in which the two parties determine the duration and the time of termination of the contract, but not exceeding the period of 36 months.

The form of seasonal labor contract is no more referred to under the Amended Labor Code 2019.

2. NEW REGULATIONS ON THE PROBATION

i. The probation period of an enterprise manager does not exceed 6 months

According to the Amended Labor Code 2019, the probation period does not exceed 180 days for posts of an enterprise manager as defined under the Law on Enterprises 2014.

ii. Officially recording the agreement of probation in labor contract

The Amended Labor Code 2019 provides that if there is an agreement on probation, the parties shall either enter into a probation contract, or agree on the provision of probation in the labor contract.

In case the probationary job is satisfactory, the employer shall sign a labor contract with the employee or shall continue performing the signed labor contract.

In contrasts, if the probationary job fails to meet the requirements that have been agreed by the two parties, the signed probation contract or labor contract shall be terminated.

3. SUPPLEMENTING CASES OF EMPLOYEE WORKING OVERTIME NOT EXCEEDING 300 HOURS PER YEAR

Regarding the current regulation, the overtime working hours of the employee must not exceed 200 hours per year, except some cases in which overtime working hours must not exceed 300 hours per year.

Accordingly, the Amended Labor Code 2019 has supplemented some cases, which extends the overtime working hours of employee not exceeding 300 hours per year:

  1. In case of solving such tasks require professional and high technical qualification, which the labor market is not able to provide sufficiently, promptly.
  2. In case of solving emergency tasks which cannot be delayed, due to the seasonality and timing of raw materials, products or dealing with works arising due to unforeseen objective factors as consequence of weather, natural disasters, enemy sabotage, fire, lack of electricity, lack of raw materials, technical problems of production lines.

4. REPEALING AND SUPPLEMENTING CASES OF TERMINATION OF A LABOR CONTRACT

i. Employee is eligible to terminate the labor contract without reason

The Amended Labor Code 2019 has repealed specific cases enabling an employee to unilaterally terminate the labor contract under the current Labor Code, instead, the employees are required to notice the employer within a statutory time, without the requirement of giving reasons and being eligible for the unilateral termination cases as specified under current law,.

ii. Cases in which employees are allowed to unilaterally terminate the labor contract without prior notification

Employee may be allowed to unilaterally terminate the labor contract without prior notice in the following cases:

  1. He/she is not assigned to the job or workplace or provided the working conditions as agreed in the labor contract;
  2. He/she is not paid in full or on time as agreed in the labor contract;
  3. He/she is maltreated, beaten, or abused by the employer, abusive acts, acts affecting health, dignity and honor; subjected to forced labor.
  4. He/she is sexually harassed at workplace;
  5. A female employee who is pregnant and must take leave;
  6. He/she is at the age of retirement accordance with the law;
  7. An employer, who provided false information that effects the performance of the labor contract.

iii. Broadening cases of unilateral termination the labor contract by an employer:

  1. An employee, who is at the age of retirement accordance with the law and is not required to meet the conditions on the period of payment of social insurance stipulated under the current Labor Code 2012;
  2. An employee, who has been absent from work without permission and plausible reason for 5-continuing-working-day and more;
  3. An employee, who provided false identity information at the execution of the labor contract that has effected the employer’s recruitment.

5. INCREASING OF THE RETIREMENT’S AGE: REACHING FULL 62 YEARS OF AGE AT 2028 FOR MALES AND REACHING FULL 60 YEARS OF AGE AT 2035 FOR FEMALES

The Amended Labor Code 2019 has increased the age of retirement with a long-term purpose to proactively face with the population aging in Vietnam.

Accordingly, from 1st of January 2021, the age of retirement of an employee in normal working conditions is full 60 years and 03 months of age for males and full 55 years and 04 months of age, for females. Afterwards, increasing 03 months per year for males and 04 months per year for females until 2028 when males reach full 62 years of age and until 2035 when females reach full 60 years of age.

6. ESTABLISHMENT OF AN INDEPENDENT TRADE UNIONS

An employer has the right to establish, participate in the employee’s representative organizations.  The employee’s representative organizations include grassroots level trade unions and employee’s organizations in enterprises.

The Amended Labor Code 2019 allows the establishment of an independent trade unions, which do not belong to Vietnam General Confederation of Labor – the only current trade unions. This regulation contributes to improve the efficiency of representing and protecting the rights and legitimate interests of employees in labor relations, in line with the International Labor Organization (ILO) Conventions, facilitate the process of international integration.