17 Important New Points in the Labor Code 2019 in Vietnam

2019 LABOR CODE (APPROVED) IN VIETNAM

1. Increasing the retirement age to 60 for women, 62 for men in Vietnam

According to Article 169 of the 2019 Labor Code, the retirement age for employees under normal working conditions is adjusted according to a roadmap until reaching 62 years old for men in 2028 and 60 years old for women in 2035.

From 2021, the retirement age for employees under normal working conditions is 60 years and 3 months for men and 55 years and 4 months for women; thereafter, 3 months will be added annually for men and 4 months for women.

Employees who have reduced labor capacity; work in especially heavy, hazardous, dangerous occupations; work in harsh economic and social conditions can retire at a lower age but not more than 5 years earlier than the stipulated retirement age, except as otherwise regulated by law. Conversely, highly qualified technical professionals and certain special cases can retire at a higher age but not more than 5 years later than stipulated, except as otherwise regulated by law.

Thus, from 2021, the retirement age will be increased annually by 3 months for male teachers and 4 months for female teachers until reaching 62 years for men in 2028 and 60 years for women in 2035.

2. From January 1, 2021, Vietnamese officials, public employees, and employees are entitled to 2 days off for National Day (September 2)

Regarding the increase of one more public holiday in the year, the Standing Committee of the National Assembly has proposed that the National Assembly choose an additional day adjacent to the National Day (September 2).

This means that on our National Day, workers will get two days off. This is Independence Day and also an opportunity for workers to have more time to participate in commemorative activities celebrating National Day (September 2). This content is specified in Clause 1 of Article 112 of the 2019 Labor Code as follows:

Article 112. Public holidays and New Year holidays

1. Employees are entitled to paid days off during the following public holidays and New Year holidays:

a) New Year's Day: 1 day (January 1 of the solar calendar);

b) Lunar New Year: 5 days;

c) Victory Day: 1 day (April 30 of the solar calendar);

d) International Labor Day: 1 day (May 1 of the solar calendar);

e) National Day: 2 days (September 2 of the solar calendar and 1 adjacent day, either before or after);

f) Hung Kings Commemoration Day: 1 day (March 10 of the lunar calendar).

Thus, from January 1, 2021, Vietnamese officials, public employees, and employees will be entitled to a total of 11 public holidays and New Year holidays annually, including 2 days off for National Day (currently, employees are only entitled to 1 day off for this occasion).

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3. Employees in Vietnam can unilaterally terminate labor contracts without prior notice

According to the 2019 Labor Code, employees have the right to unilaterally terminate labor contracts but must inform the employer in advance as follows: At least 45 days for indefinite-term labor contracts; at least 30 days for fixed-term labor contracts with a duration of 12 to 36 months; at least 3 working days for fixed-term labor contracts with a duration of less than 12 months, and for specific industries, the notice period is regulated by the Government of Vietnam.

However, employees have the right to unilaterally terminate labor contracts without prior notice in the following cases:

- Not being assigned the right job, workplace, or not guaranteed working conditions as agreed;

- Not being fully paid or paid on time;

- Being mistreated, beaten, or verbally abused by the employer, or actions that affect health, dignity, or honor; being forced laborers;

- Being sexually harassed at the workplace;

- Female employees who have to quit work as prescribed in Clause 1 of Article 138 of this Code;

- Reaching the retirement age, unless otherwise agreed by both parties;

- The employer providing false information under Clause 1 of Article 16 of this Code, affecting the performance of the labor contract.

4. No more seasonal labor contracts from January 1, 2021 in Vietnam

From the effective date of the 2019 Labor Code, labor contracts can only be concluded as one of the following types:

- Indefinite-term labor contracts, where the two parties do not determine the term, or the time of the contract's termination;

- Fixed-term labor contracts, where the two parties determine the term, or the time of the contract's termination within a maximum of 36 months from the effective date of the contract.

Thus, the 2019 Labor Code has eliminated the seasonal labor contract type. From January 1, 2021, there will only be 2 types of labor contracts: fixed-term and indefinite-term labor contracts.

5. More cases where employees in Vietnam are entitled to leave with full pay

Under the 2019 Labor Code, employees are entitled to leave with full pay and must notify the employer in the following cases:

- Getting married: 3 days off;

- Biological or adopted child getting married: 1 day off;

- Death of biological father, mother; adoptive father, mother; father-in-law, mother-in-law; spouse; biological or adopted child: 3 days off.

Thus, the 2019 Labor Code expands to 2 additional cases where employees are entitled to leave with full pay, specifically, the case of the adoptive father or mother passing away. Additionally, the 2019 Labor Code clarifies earlier provisions under the 2012 Labor Code, such as including both biological and adopted children getting married, and specifying adoptive fathers/mothers of a spouse.

6. Employers cannot enter into labor contracts to offset debts in Vietnam

Under the 2019 Labor Code, one of the prohibited actions for employers when concluding and performing labor contracts is “forcing employees to perform labor contracts to repay debts to the employer.” This is a new regulation introduced in the 2019 Labor Code compared to the 2012 Labor Code. From January 1, 2021, employers cannot require employees to sign labor contracts to offset borrowed amounts or, in other words, to repay debts.

Employers in Vietnam cannot enter into labor contracts to offset debts (Illustration)

7. Break time during working hours is not counted as working time

Under the 2019 Labor Code, employees who work for 6 hours or more per day under normal working hours are entitled to at least 30 minutes of continuous break; those working night shifts are entitled to at least 45 minutes of continuous break and it does not count as working time; for shift workers, break time is counted as working time. Thus, from January 1, 2021, break time will only be counted as working time for shift workers, not for those working normal hours.

Currently, under the 2012 Labor Code, break time for employees working normal hours is still counted as working time.

8. More dialogue forms between employees and enterprises from 2021 in Vietnam

Under the 2019 Labor Code, workplace dialogues between employees and employers can be organized in the following forms:

- Periodically at least once a year; (Currently every 3 months)

- Upon the request of one or both parties; (Currently upon the request of one party)

- When there are cases stipulated in point a, clause 1 of Article 36; Articles 42, 44, 93, 104, 118, and clause 1 of Article 128 of this Code. (This is a new form introduced in the 2019 Labor Code)

Additionally, the 2019 Labor Code encourages employers and employees to conduct other dialogue forms besides those mentioned above.

Thus, compared to the 2012 Labor Code, the 2019 Labor Code offers more diverse dialogue forms between employees and employers for more convenience.

9. More cases of labor contract termination in Vietnam

Besides the cases of labor contract termination stipulated in the 2012 Labor Code, from January 1, 2021, labor contracts can also be terminated in the following cases:

- Foreign employees working in Vietnam are expelled according to court judgments or decisions by competent state authorities;

- Employers who are not individuals have no lawful representative or authorized person as informed by the state business registration authority;

- Expired work permits for foreign workers in Vietnam;

- Failure in probation as agreed or termination of the probation agreement by either party.

10. Training and apprenticeship periods for employees with employers in Vietnam are limited

Under the 2019 Labor Code, vocational training with employers involves employers recruiting individuals for training at their workplaces; the training period follows training programs regulated by the Law on Vocational Education. Apprenticeship for working with employers involves employers recruiting individuals for job guidance and skill practice at their workplaces; the apprenticeship period should not exceed 3 months.

Compared to the current provisions under the 2012 Labor Code, the 2019 Labor Code adds stipulations on the training and apprenticeship periods for employees. From January 1, 2021, the apprenticeship period cannot exceed 3 months, while the training period follows the training programs tipulated by the Law on Vocational Education.

11. Amendments and supplements on handling illegal strikes in Vietnam

To be specific, under the 2019 Labor Code, within 12 hours of receiving notice of an illegal strike, the Chairman of the district-level People’s Committee shall lead and direct the state labor management authority to cooperate with the same level trade union and relevant agencies and organizations to meet with the employer and representatives of the worker’s representative organization at the workplace to hear opinions and support the parties in finding solutions to resolve the issue, restoring normal business operations, specifically:

- If there are law violations, a record should be made, and violations should be handled or recommended to competent authorities for handling according to the law.

- For labor disputes, guide and support the parties in carrying out procedures for resolving labor disputes as stipulated in this Code.

Thus, compared to the current provisions under the 2012 Labor Code, the 2019 Labor Code adds specific solutions for handling illegal strikes.

12. Amendments and supplements on cases of unlawful strikes in Vietnam 

To be specific, the 2019 Labor Code adds 3 cases of unlawful strikes compared to the 2012 Labor Code: strikes violating procedures; strikes not organized by an authorized worker’s representative organization; strikes not for cases eligible for striking under Article 199 of this Code. Additionally, the 2019 Labor Code removes 2 cases of unlawful strikes stipulated before in the 2012 Labor Code, specifically:

- Not arising from collective labor disputes over benefits;

- Organizing strikes for employees not working for the same employer;

- When a collective labor dispute has not yet been resolved by competent authorities as stipulated in the Labor Code.

13. Employers in Vietnam must inform employees of payroll details when paying wages

This is a newly added provision in the 2019 Labor Code compared to the 2012 Labor Code. To be specific, under the 2019 Labor Code, each time wages are paid, employers must inform employees of the payroll details, clearly stating the wages, overtime wages, night shift wages, and any deductions (if any).

Regarding the form of wage payment, employers and employees may agree on paying wages according to time, product, or piecework. Wages can be paid in cash or via the employee’s personal bank account. If wages are paid through an employee's personal bank account, the employer must bear the fees related to opening and transferring wages.

14. Labor contracts between parties undergo significant changes from January 1, 2021

Under the 2019 Labor Code, a labor contract is an agreement between employees and employers regarding the job to be done, wages, and rights and obligations of each party in the labor relationship. In cases where agreements are called by different names but contain contents indicating paid work and the management, supervision from one party, they are considered labor contracts.

Additionally, the 2019 Labor Code states that labor contracts concluded via electronic means in the form of data messages under the law on electronic transactions have the same legal value as written labor contracts. Parties may conclude oral labor contracts for contracts with a term of less than 1 month, except for hiring employees under 15 years old, domestic workers, and entering into labor contracts with the authorized representative of a group of employees aged 18 or older. (Currently, parties can oral labor contracts for contracts with a term of less than 3 months).

15. Additional regulations on probation periods for employees

Under the 2019 Labor Code, the probation period is negotiated between the two parties based on the nature and complexity of the job but can only be tried once for a job and must meet the following conditions:

- Not exceeding 180 days for jobs of enterprise managers regulated by the Law on Enterprises; Law on Management and Use of State Capital Invested in Production and Business in Enterprises;

- Not exceeding 60 days for jobs requiring professional qualifications of college level or above;

- Not exceeding 30 days for jobs requiring professional qualifications of intermediate level, technical workers, or clerical staff;

- Not exceeding 6 working days for other jobs.

Thus, alongside continuing the provisions on probation periods for employees in the 2012 Labor Code, the 2019 Labor Code adds probation periods for enterprise managers, setting the period to not more than 180 days.

16. Officially Defined Act of Discrimination in Employment

According to the Labor Code 2019, discrimination in employment is an act of discrimination, exclusion, or preference based on race, skin color, national or social origin, ethnicity, gender, age, maternity status, marital status, religion, belief, political opinion, disability, family responsibilities, or based on HIV status or due to union establishment, membership, and activities of the worker organization at the enterprise that affect the equality of employment opportunities or occupation. Discrimination, exclusion, or preference arising from the special requirements of the job and actions to maintain and protect the employment for vulnerable workers are not considered discrimination.

Currently, according to the Labor Code 2012, acts of discrimination in employment are only sporadically stipulated in certain clauses as prohibited acts without a specific definition.

17. Definition of Sexual Harassment in the Workplace Established

According to the Labor Code 2019, sexual harassment in the workplace is any sexual act by any person towards another person in the workplace that is unwelcome or unaccepted by that person. The workplace is any location where the worker actually works according to the agreement or assignment of the employer.

Currently, the Labor Code 2012 mentions sexual harassment acts but only in some clauses as prohibited acts and as one of the grounds for employees to unilaterally terminate the labor contract before the term without a specific definition of this behavior.

Nguyen Trinh

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