Vietnam Legal Update: Draft Amendment to Labour Code | DFDL Legal, Tax & Investment Expertise

On 28 April 2019, the Ministry of Labour – Invalids and Social Affairs published a draft law amendment to the Labour Code (the “Draft Amended Labour Code”). A considerably substantive amendment, this Draft Amended Labour Code is comprised of 17 chapters and 221 articles. This amendment will be officially submitted to the National Assembly at the 7th session in May 2019 and will potentially be passed in November 2019. The Draft Amended Labour Code once finalized and passed would replace the current Labour Code No. 10/2012/QH13 of the National Assembly dated 18 June 2012 (the “Labour Code”).

Major changes proposed in the Draft Amended Labour Code:

(i) Expanded maximum overtime hours (Article 108 of the Draft Amended Labour Code)

Under the Labour Code, the number of overtime hours for any employee is capped:

Per day: 50% of the normal working hours in one day. If the employer stipulates work on a weekly basis, the total of normal working hours and overtime hours must not exceed 12 hours in one day.
Per month: 30 hours.
Per year: 200 hours per year, except in special cases regulated by the Government where up to 300 hours in one year is allowed.

Under the Draft Amended Labour Code, in special cases as regulated by the Government, the maximum is 400 overtime hours in one year.

(ii) Later retirement age (Article 170 of the Draft Amended Labour Code)

Under the Draft Amended Labour Code, from 1 January 2021, the retirement age of employees in normal working conditions would be 60 years and three months for men and 55 years and four months for women. Thereafter, the retirement age would be increased to 62 years for men and 60 years for women.

Additionally, the Draft Amended Labour Code revises the provision on early retirement of employees due to dangerous work to allow them to retire up to five years sooner than the retirement age stated above.

(iii) Public holiday (Article 113 of the Draft Amended Labour Code)

a. Addition of one public holiday
Under the Draft Amended Labour Code, the Vietnam’s War Invalids and Martyrs Day (27 July) will be added to the public holidays bringing the total number of public holidays to 11.

b. Lunar New Year Holiday
Under the Draft Amended Labour Code, it is proposed that:
Option 1: The current provisions prescribed under the Labour Code would remain unchanged; or
Option 2: Employees would be entitled to five days off during the Lunar New Year; irrespective of whether a day of the Lunar New Year holidays coincides with a day on weekend, they will not be compensated with a weekday holiday.

(iv) Representative organization of employees at the grassroots level (Chapter XIII of the Draft Amended Labour Code)

The Draft Amended Labour Code brings three major changes:

increased employee rights on establishment and participation in representative organizations;
additional provisions for conditions/requirements of leadership and organizational leaders; and
clearer objectives regarding the mission, purpose, and charter of the representative organization.

(v) Improved employee rights for unilateral termination (Article 35 of the Draft Amended Labour Code)

Under the Draft Amended Labour Code, an employee may unilaterally terminate his/her labor contracts at any time and without reason, subject to a notice period of at least 45, 30, or 3 working days in advance, for those working under indefinite-term, definite-term and seasonal labor contracts respectively.

Additionally, employees may unilaterally terminate their labor contracts at any time without any prior notification to employers in the following special cases:
a. The employee is not assigned to the correct job or workplace or is not ensured the working conditions agreed in the labour contract;
b. The employee is not paid the wages due in full or on time as agreed in the labour contract;
c. The employee is maltreated, sexually harassed, or is subject to labour coercion; and
d. A female employee is pregnant and must cease working on the advice of a competent medical consultant or facility.

The information provided in this article is for information purposes only and is not intended to constitute legal advice should be obtained from qualified legal counsel for all specific situations.

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