The Vietnam Labor Code revised in 2019 was approved by the National Assembly on November 20, 2019 and took effect from January 1, 2021. This new code has many changed regulations, in order to support and protect the interests of employees in the best way.
Enterprises and employees need to understand the new contents of this Code in order to exercise their labor rights and obligations in accordance with the law. The following are the most important new points to pay attention to in the Labor Code 2019.
- Employees are allowed to authorize others to receive salary on their behalf
The Labor Code 2019 stipulates: “In case an employee cannot receive a salary directly, the employer may pay the salary to the person legally authorized by the employee”.
Previously, the Labor Code 2012 did not stipulate this content. However, in case an employee is sick or has an accident and cannot directly receive salary… it is very necessary to allow authorized person by the employee to receive salary.
- Supplementing the form of signing an electronic labor contract
In order to keep up with the trend of industrialization 4.0 and the development of science and technology, the conclusion of labor contracts is no longer merely in the form of documents, words or acts. Article 14 of the new Labor Code has further recognized the form of signing a labor contract through electronic means and has the same legal validity as a regular written contract.
In addition, in cases where the two parties agree by another name but with the content showing paid work, salary and the management, administration and supervision of one party, it is still considered a labor contract.
- Employers are not allowed to sign Labor Contracts to clear debts
“Forcing employees to perform a labor contract to pay debts to the employer” is clearly stated in Clause 3, Article 17 of the Labor Code 2019 which regulates the acts that the employer is not allowed to do when entering into and performing the labor contract.
Therefore, the employer does not have the right to force the employee to sign the Labor Contract for the purpose of clearing debt.
- Roadmap to increase the retirement age for employees
Compared to the 2012 Code, the retirement age of employees has been increased significantly. In addition, specific jobs are also more clearly defined in terms of early retirement.
Article 169 of the new Labor Code specifically stipulates: “The retirement age of employees under normal working conditions is adjusted according to the roadmap until reaching 62 years of age for male employees in 2028 and 60 years of age for female employees in 2035. From 2021, employees’ retirement age under normal working conditions is 60 years and 3 months for male; 55 years and 4 months for female. After that, each year increases by 03 months for male employees; 04 months for female employees”.
However, for people with reduced working capacity or those who do heavy, hazardous, dangerous or especially heavy, hazardous or dangerous jobs or work in places with difficult socio-economic conditions, they may retire at a lower age but not exceeding 05 years of age as prescribed in Clause 2.
- Seasonal labor contract is abolished
In Article 20 of the latest Labor Code, a Labor Contract can only be entered into under one of the following categories:
- An indefinite term labor contract is a contract in which the two parties do not determine the term and the time of termination of the contract’s validity.
- A definite term labor contract is a contract in which the two parties determine the term, the time of termination of the contract’s validity within 36 months from the effective date of the contract.
Thus, it can be seen that the content of a seasonal contract or a job with a term of less than 12 months has been abolished.
- Increase the time of National Independence Day holiday, September, 2
In order to create conditions for employees to have more time to participate in activities to celebrate the National Independence Day, increase political significance, and enhance national pride. At the same time, meeting the aspirations of employees who need more time to rest, reunite with their families and help children and students prepare for the opening day of the new school year.
Point đ, Clause 1, Article 112 of the Labor Code 2019 stipulates that on National Independence Day, September 2, employees will have 02 days off (September 2 of the calendar year and 01 day immediately before or after).
Therefore, the total number of upcoming annual holidays and Tet will be increased to 11 days. Employees will be given leave from work but still receive full salary during these holidays and Tet.
- There must be a detailed statement when paying employees’ salary
In order to increase transparency and clarity when paying employees, the latest Labor Code 2019 additionally stipulates: when paying salary, the employer must notify a detailed salary statement to the employee, which clearly states salary, overtime salary, nighttime salary, content and amounts deducted (if any). Regarding the form of payment, the employee and the employer can agree with each other, can pay by time, product or contract.
- The right to unilaterally terminate the contract of the employee
Under the current Code, an employee can unilaterally terminate the contract only when working with a definite term labor contract, a seasonal labor contract or a certain job with a term of less than 12 months when falling in the cases specified in Clause 1, Article 37 of the Labor Code 2012.
However, with the new Labor Code, in order to overcome the limitations and difficulties of the employees, Article 35 of the Labor Code 2019 allows the employees to have the right to unilaterally terminate the contract without reason but only need to notify the employer in advance according to the following provisions:
- At least 45 days if working under an indefinite term Labor Contract.
- At least 30 days if working under a definite term Labor Contract with a term of 12-36 months.
- At least 03 working days if working under a definite term Labor Contract with a term of less than 12 months.
- For a number of specific trades and jobs, the time limit for advance notice is prescribed by the Government.
In addition, Clause 2 of Article 35 stipulates a number of cases where the employee has the right to unilaterally terminate the labor contract without prior notice, specifically as follows:
- Not being arranged according to the right job, working location or not guaranteed working conditions as agreed.
- Not being paid in full or not paying on time.
- Being abused, beaten by the employer or having insulting words or acts affecting health, dignity and honor; forced labor.
- Sexual harassment at work.
- Pregnant female employees must take leave.
- Eligible retirement age, unless otherwise agreed by the parties.
- Employers provide untruthful information that affects the performance of the labor contract.
- Increase overtime by month
In the immediate future, the normal working hours of employees will remain the same in accordance with the provisions of the current Code. However, there will be a roadmap to reduce normal working hours at an appropriate time in the near future.
As for overtime, in Article 107 of the Labor Code 2019, the National Assembly decided not to increase overtime hours in the year. As follows:
“Ensure that the overtime hours of employees do not exceed 50% of the normal working hours in a day; if weekly working hours are applied, the total number of normal working hours and overtime hours shall not exceed 12 hours/day; no more than 40 hours/month; no more than 200 hours/year, except for some special cases where overtime work is not more than 300 hours/year”.
The only difference between the Labor Code in 2019 and 2012 is that the number of overtime hours in the month increases to 40 hours instead of 30 hours and more specifically the cases of overtime work up to 300 hours/year such as production, processing and exporting textiles, garments, leather, shoes, electrical and electronic components, processing agricultural, forestry and fishery products; electricity supply, telecommunications, oil refining; water supply and drainage.
- Regulations on the period of apprenticeship and vocational training of employees
Unlike the 2012 Code, the revised Labor Code has added regulations on the duration of vocational training and apprenticeship for employees. The employee’s apprenticeship period will last no more than 3 months and the apprenticeship period of employees under the training program for each level will be implemented in accordance with the Law on Vocational Education.
- Regulations on probation
The probationary period shall be agreed upon by the two parties based on the nature and complexity of the job, but only once for a job and ensuring the following conditions:
– No more than 180 days for the job of an enterprise manager in accordance with the Law on Enterprises, the Law on Management and Use of State Capital invested in production and business in enterprises;
– No more than 60 days for jobs with professional titles requiring professional or technical qualifications from college or higher;
– No more than 30 days for jobs with professional titles that require intermediate professional qualifications, technical workers, and professional staff;
– No more than 06 working days for other jobs.
At the end of the probationary period, the employer must notify the employee of the probation result.
During the probationary period, each party has the right to cancel the signed probationary contract or labor contract without prior notice and without compensation.
- Regulations on payment of unpaid annual leave
The Labor Code 2019 stipulates: “In case of severance or job loss, but have not taken annual leave or have not taken all annual leave days, the enterprise shall pay salary for the unused days”.
Thus, if the employee is still working at the enterprise but has not taken the full annual leave, the employer will not be paid salary for the unused days.
The above is a summary of important new points in the Vietnam Labor Code 2019 that businesses and employees need to pay attention to. If you have any questions, please contact VNC CONSULTING via Website: www.vnc-os.com – Hotline: (+84) 28 6670 3100 – (+84) 902 595 171.