HR

Updates on Vietnam labour code 2021

Tra Mac

May 5, 2021

Coming to employment law in Vietnam, the Labor Code 2019, passed by the 8th session of the 14th National Assembly on November 20, 2019, takes effect from January 1, 2021, with many new contents related to the interests of employees.

  • This Code defines labor standards; rights, obligations and responsibilities of employees, employers, grassroots representative organizations, employers’ representative organizations in labor relations and other relevant relations directly to labor relations; State management of labor.
  • Objectives: Employees, apprentices, apprentices and workers without labor relations; the employer; foreign workers working in Vietnam; Other agencies, organizations and individuals directly related to the labor relation.
  • This Code has extended the applicable object of the person working without labor relations.

Here are some new contents specified in the Labor Code 2019:


Only 2 types of labor contracts are available in the employment law in Vietnam 2021

In order to protect the legal rights of employees, to limit the employer’s evasion of responsibility, not to pay social insurance for employees in the form of entering into seasonal labor contracts (or pretending to sign a contract. services, job contract instead of seasonal labor contract) … Article 20 of the Labor Code 2021 has removed the content of a seasonal labor contract or a job with a term of less than 12 months, only remaining 2 types of contract: indefinite term and fixed term labor contract. In which, an indefinite term labor contract is a contract in which the two parties do not specify the term and the time of termination of the validity of the contract.

Definite-term labor contract: a contract in which the two parties determine the term and the time of termination of the validity of the contract within a period not exceeding 36 months from the effective date of the contract.

When the labor contract defines the expiration period but the employee continues to work:

Within 30 days after the labor contract expires, the two parties must sign a new labor contract; Pending the signing of a new labor contract, the rights, obligations and interests of both parties will be performed according to the signed contract;

If the 30-day period expires from the expiration of the labor contract but the two parties fail to sign a new labor contract, the signed fixed-term labor contract becomes an indefinite-term labor contract;

In case the two parties sign a new labor contract, which is a fixed-term labor contract, only one more time is allowed, then, if the employee continues to work, an unspecified labor contract must be signed. time limit.

Particularly for the elderly employee, Clause 1, Article 149 of the Labor Code 2021 stipulates that the employer has agreed to repeatedly enter into a fixed-term labor contract with the elderly instead of an extension. Term of labor contract or signing new labor contract as before.

Check out our related article: Vietnam Entry Procedure for Foreign Employees Amid the Pandemic


It is possible to contract either electronically or verbally

In accordance with the development of digital science and technology, along with the conclusion of written and verbal labor contracts, the Labor Code 2019 has added the form of entering into labor contracts through electronic convenience. Clause 1, Article 14 of this Code stipulates that: A labor contract is entered into via electronic means in the form of a data message in accordance with the law on electronic transactions as valid as an equal labor contract. 

At the same time, Clause 2 Article 14 of the Labor Code 2021 stipulates that the two parties may enter into a verbal labor contract for contracts with a term of less than 1 month, except for the case specified in Clause 2, Article 18, Point a Clause 1 Article 145 and Clause 1 Article 162 of this Code, instead of entering into verbal labor contracts applicable to temporary jobs with a term of less than 3 months as prescribed by the Labor Code 2012 years ago.


Additional provisions on probationary period

Regarding to manager’s job, Clause 1 Article 25 of the Labor Code 2021 stipulates that the probationary period must not exceed 180 days for the job of an enterprise manager in accordance with the Law on Enterprises and the Law on Management. and using state capital to invest in production and business in enterprises.

For labor contracts with a term of less than 1 month, Clauses 1 and 3, Article 24 of this Code stipulates that the employer and the employee can agree on the probationary content stated in the labor contract or the probation agreement agreement by entering into a probationary contract; Probation is not applied to employees who enter into labor contracts with a term of less than 1 month.

In addition, the Labor Code 2021 adds 4 cases where the employee is entitled to postponement of the labor contract. Specifically, Clause 1 of Article 30 adds cases of postponement of the labor contract, including: 

(1) the employee fulfills the obligation to join the Militia and Self-Defense Force; 

(2) the employee is appointed as an enterprise manager of a one-member limited liability company with 100% of the charter capital held by the State; 

(3) the employee is authorized to exercise the rights and obligations of the representative of the State owner with respect to the State capital in the enterprise; 

(4) employees are authorized to exercise the rights and responsibilities of an enterprise for the capital of a business invested in another enterprise.


The employee is allowed to unilaterally terminate the contract without any reason

According to the employment law in Vietnam, Article 35 of the Labor Code 2021 stipulates that the employee has the right to unilaterally terminate the labor contract without stating the reason, but must notify the employer in advance: 

  • At least 45 days if working work under an indefinite term labor contract; 
  • At least 30 days if working under a fixed-term labor contract with a term of between 12 months and 36 months; 
  • At least 3 working days if working under a fixed-term labor contract with a term of less than 12 months.

In some cases, the employee has the right to unilaterally terminate the contract without prior notice, such as: 

  • Not being arranged according to the right job, working place or not guaranteed working conditions as agreed; 
  • Not being paid in full or on time; 
  • Being mistreated, beaten, or verbally abused by the employer, or behavior affecting health, dignity or honor;
  • Forced labor; 
  • Being sexually harassed at work; 
  • The pregnant female employee must quit her job; 
  • Retirement due, unless the parties agree otherwise;
  • The employer provides dishonest information that affects the performance of the labor contract.

The Code also stipulates two cases where the employer has the right to unilaterally terminate the contract without prior notice: Clause 3, Article 37 of the 2021 Labor Code stipulates that the employer has the right to unilaterally terminate the labor contract without prior notice in 2 cases: 

  • The employee is not present at the workplace within 15 days from the expiration of the period of temporary suspension of the labor contract; 
  • The employee voluntarily quit his job without having a plausible reason for 5 or more consecutive working days.

Increase the retirement age according to the roadmap in the employment law in vietnam

Also according to this Code, the retirement age of employees will increase according to the roadmap from 2021. Accordingly, Article 169 of the Code stipulates that the retirement age of employees in normal working conditions will be adjusted according to the roadmap until they reach 62 for male workers by 2028, and 60 years old for female employees by 2035.

From 2021, the retirement age of the employee under normal working conditions is 60 years and 3 months for men; full 55 years and 4 months for women. After that, each year, it increases by 3 months for male workers; 4 months for female employees.

For an employee with a working capacity decrease; working in heavy, hazardous, dangerous or extremely heavy, hazardous or dangerous occupations or jobs or working in areas with extremely difficult socio-economic conditions may retire before the retirement age, but no earlier than 5 years.


Adjustment of benefits for vacation and overtime hours

To the employment law in Vietnam, Article 107 of the Labor Code 2021 stipulates that the employee’s overtime hours must not exceed 50% of the normal working hours in a day; if applying weekly working hours, the total number of normal working hours and overtime hours must not exceed 12 hours / day; no more than 40 hours / month; not exceeding 200 hours / year, except in some special cases, working overtime not exceeding 300 hours / year.

Thus, the Labor Code 2021 provides for an increase in the number of overtime hours in a month to no more than 40 hours. Keep the number of overtime hours in the year unchanged at no more than 200 hours / year, except for some special cases where the overtime work does not exceed 300 hours / year as prescribed in the 2012 Labor Code.

In the employment law in Vietnam, Article 112 of the Labor Code 2021 stipulates that, employees are entitled to take leave from work and enjoy their full salary in the following holidays and New Year: 1 day New Year (January 1 of the calendar); Lunar New Year 5 days; Victory Day 1 day (April 30 of solar calendar); International Labor Day 1 day (May 1 of solar calendar); Day of Hung Vuong’s death anniversary 1 day (March 10th of lunar calendar). National Day is increased to 2 days (September 2 of solar calendar and 1 day immediately before or after, can be September 1 or September 3 depending on each year).

In the case of taking separate leave with full salary, in the past, according to Clause 1 Article 116 of the Labor Code 2012, an employee is entitled to take separate leave but still enjoy full salary in the following cases: Getting married; Married children: 1 day off; natural father, natural mother, father-in-law, mother-in-law or father-in-law, mother-in-law dies; wife dies or husband dies; Child’s death: 3 days off.

Now, in Clause 1, Article 115 of the Labor Code 2019, the employee is entitled to take a separate leave but still enjoy the full salary and must notify the employer in the following cases: Marriage takes 3 days off; natural children, adopted children get married: take 1 day off; natural father, natural mother, adoptive father, adoptive mother; natural father, natural mother, adoptive father, adoptive mother of the husband or wife; wife or husband; natural children, adopted children die: 3 days off.

Thus, the Labor Code 2021 has added that employees are allowed to take separate leave to enjoy full salary in case an adoptive child gets married and takes 1 day off and in case the adoptive father and adoptive mother die 3 days off.

For the payment if the annual leave has not been completed, the Labor Code 2021 states that only 2 cases are paid: job loss and job severance. This Code abolishes the regulation that employees who are working “for other reasons but have not taken annual leave or have not taken all annual leave days off, they will be paid in cash for the unpaid days” as stated in Clause 1, Article 114 of the Labor Code 2012.

So, those are a cutting – edge overview on employment law in Vietnam update. Please do not hesitate to contact us if you’re coming across any obstacles in your investment process into Vietnam, we are always willing to give you a helping hand with comprehensive commitment!

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