"I have just been asked by my company to take an unpaid leave for 2 weeks, citing the reason that the company does not have any orders due to the Covid-19 pandemic. So I would like to ask if the company's action complies with the legal regulations or not?"
Article table of contents
Do employers in Vietnam have the right to request employees to take unpaid leave because of COVID-19 pandemic? (Illustrative photo)
On April 01, 2020, the Prime Minister of the Government of Vietnam issued Decision 447/QD-TTg, which declared the COVID-19 pandemic as an infectious disease of group A, posing a global pandemic risk.
According to Clause 3, Article 98 of the Labor Code 2012:
If due to electricity, water failure not caused by the employer or the employee, or due to other objective reasons such as natural disasters, fire, dangerous epidemics, enemy destruction, relocation of the workplace at the request of a competent state authority, or for economic reasons, the suspension wage shall be agreed upon by both parties but not lower than the regional minimum wage prescribed by the Government of Vietnam.
In the case of a dangerous epidemic like COVID-19, the employer can let employees temporarily stop working but cannot allow them to take unpaid leave. The employer must ensure to pay wages agreed upon by both parties but not lower than the regional minimum wage prescribed by the Government of Vietnam. In other words, not lower than:
- 4,420,000 VND/month for Region I;
- 3,920,000 VND/month for Region II;
- 3,430,000 VND/month for Region III;
- 3,070,000 VND/month for Region IV.
Thus, if an enterprise is affected by the COVID-19 pandemic and cannot operate normally, leading to a surplus of labor, labor laws allow the employer to let employees temporarily stop working. The employer must ensure to pay at least the regional minimum wage to support the employees in maintaining their livelihood without letting them go unpaid.
Additionally, with the complex developments of COVID-19, the Ministry of Labor, War Invalids and Social Affairs issued Official Dispatch 1064/LD-TBXH-QHLDTL guiding wage payment during work stoppage and handling the employee's status during the pandemic-related work suspension. In case an enterprise faces difficulties in sourcing materials, market crises leading to insufficient jobs, the employer can resolve as follows:
- Temporarily transfer employees to other jobs different from their employment contract as regulated in Article 31 of the Labor Code;
- If the work suspension is prolonged, affecting the company's ability to pay, the employer and employees can agree to temporarily suspend the labor contract following Article 32 of the Labor Code;
- If the company has to downsize production, leading to job reductions, it can unilaterally terminate the labor contract as regulated in Point c, Clause 1, Article 38 or Article 44 of the Labor Code.
For other arising cases, it is recommended that the Department of Labor, War Invalids and Social Affairs consider specific contents and cases for guidance under the law or report to the Ministry of Labor, War Invalids and Social Affairs for timely instruction and handling.
It can be seen that legal regulations always aim to create fairness, supporting both the employer and protecting employees. However, if the company genuinely cannot continue to meet employment demands due to legitimate reasons like the pandemic, labor laws permit the company to choose solutions such as letting employees temporarily stop working while still paying wages, transferring employees to different jobs with wage payment. If the company can't pay wages, they can temporarily suspend the labor contract within a specific period, which means allowing unpaid leave. In extreme cases, the employer can unilaterally terminate the labor contract but must fulfill all obligations due.
