The Ministry of Labor, Invalids and Social Affairs has submitted a report to the government regarding the draft Law amending and supplementing certain articles of the Labor Code, which demonstrates the necessity of enacting the Law to amend and supplement certain articles of the Labor Code as well as presenting various contents that have undergone different opinions during the drafting process. To be specific:
Article table of contents
Right to Unilaterally Terminate a Labor Contract by the Employee
According to Article 37 of the 2012 Labor Code, the employee has the right to unilaterally terminate the labor contract provided the reasons for termination conform to the provisions of the Labor Code, and they comply with the notice period (except for indefinite term labor contracts which only requires compliance with the notice period, but no reason is needed).
Regarding this matter, some opinions suggest retaining the current provision, while others propose abolishing the requirement of having a reason. Employees could then resign for any reason as long as they adhere to the notice period to ensure better job choices for employees and to prevent forced labor.
Termination of Labor Contract for Employees Eligible for Pension
Article 36, Clause 4 of the 2012 Labor Code states that the unilateral termination of a labor contract is permitted if the employee meets the two conditions of age and insurance contribution time. Currently, many businesses face difficulties in arranging production and legal violations, as labor laws prohibit the use of labor in heavy, hazardous, and dangerous industries. Therefore, during the drafting process, two options have been proposed: either remove the given regulation or retain it but add the employer’s right to unilaterally terminate the labor contract if the employee is of working age.
Minimum Wage
The Labor Code stipulates that the minimum wage must meet the minimum living needs of the employee and their family. However, determining the actual minimum living needs is difficult to quantify, and the current minimum wage does not yet meet these needs.
During the drafting process, some suggestions proposed amending the minimum wage regulations to ensure a minimum standard of living and recommended adding elements to determine the regional minimum wage as a basis for the National Wage Council to study and propose.
Increasing Overtime Hours
The maximum overtime hours stipulated in the Labor Code are no more than 30 hours/week and no more than 200 hours/year, with special cases not exceeding 300 hours. The draft law amending and supplementing a number of provisions of the Labor Code has proposed increasing overtime hours for the following reasons:
- To meet the needs of the majority of businesses;- To satisfy the desires of a significant portion of employees who wish to work extra hours to increase their income;- To enhance the competitiveness of the Vietnamese labor market compared to neighboring countries.
Currently, the draft law presents two options for increasing retirement age as follows:
- Option 1: Ensure that the combination of regular working hours and overtime working hours does not exceed 12 hours per day and no more than 5 consecutive days for each overtime session; however, the total number of overtime hours must not exceed 600 hours/year;- Option 2: Ensure that the combination of regular working hours and overtime working hours does not exceed 12 hours per day and no more than 5 consecutive days for each overtime session.
Increasing Retirement Age
Currently, the retirement age in normal working conditions is 60 for men and 55 for women. Increasing the retirement age is a significant issue that has been proposed multiple times during the drafting process but has yet to be approved: 2006 Gender Equality Law, 2012 Labor Code, and 2014 Social Insurance Law.
There are many contentious opinions about increasing the retirement age. Those who disagree with increasing the retirement age argue that currently a large number of young workers (new graduates) face unemployment. If the retirement age continues to increase, it would be difficult for these young workers to find opportunities, raising questions about resolving unemployment issues. Those who agree with increasing the retirement age base their support on international experience where some countries raise the retirement age to 67; life expectancy in our country has increased significantly compared to previous stages; our country’s population is transitioning from a golden population period to an aging population; if the current retirement age is maintained, the pension and survivorship fund will not be sustainable in the long term...
Two proposed options are to maintain the current retirement age of 60 for men and 55 for women, or to increase the retirement age to 62 for men and 58 for women, with a roadmap of increasing 3 months annually to ensure the increase in retirement age does not cause significant disruption to labor arrangements and usage.
