The Labor Code 2019 No. 45/2019/QH14 passed by the National Assembly will take effect on 1th, January 2021. There are some new points and noticeable changes in the Labor Code 2019 compared to the Labor Code 2012 as follows.
CHANGES IN GENERAL PROVISIONS
1. Expand the scope of regulation and regulated entities
Besides regulated entities in the applicable Labor Code, the new one adds more types of regulated entities including wokers without labor relations. In particular, worker without labor relations means a person who works on a non-employment basis. (Article 2 Labor Code 20191)
2. The rights of Employees are regulated in a more favorable way for Employees
The Labor Code 2019 supplements more rights in fovor of employees as follows:
Employees are not suffered for forced labor, sexual harassment in the workplace.
Employees refuse to work if he/she finds that the work directly threatens his/her life or health.
(Point a, d, g; Clause 1; Article 5; Labor Code 20192)
3. Additional regulations on labor relations
Apart from organizations developing labor relations in the current Code, the Labor Code 2019 adds authorized organizations in labor relations including: Vietnam Chamber of Commerce and Industry, Vietnam Cooperative Association, and other employer representative organizations that are lawfully established shall represent, protect the lawful rights and interests of employers, and participate in development of progressive, harmonious and stable labor relations.
(Clause 4, Article 7, Labor Code 20193)
4. Supplement of fobbiden actions in labor field
The new Code adds more fobbiden actions in labor field: Persuading, inciting, promising advertising or otherwise tricking employees into human trafficking, exploitation of labor or forced labor; taking advantage of employment brokerage or guest worker program to commit violations against the law.
(Clause 6, Article 8, Labor Code 20194)
NEW POINTS IN FAVOR OF EMPLOYEES
5. Seasonal contracts will be eliminated from 01/01/2021
From 01/01/2021 onwards, employers and employees may negotiate and enter into the employment contract in one of the following types of contacts:
An indefinite-term employment contract;
A fixed-term employment contract; in which the two parties fix the term of the contract for a duration of up to 36 months from the date of its conclusion.
Thus, compared to the applicable Code, the new Labor Code removes seasonal contracts.
(Clause 1, Article 20, Labor Code 20195)
6. Acceptance of employment contracts in the form of electronic data having the same value as that of a physical contract.
According the new regulations of the Labor Code 2019, electronic contracts are permitted. Specifically, an employment contract in the form of electronic data conformable with electronic transaction laws shall have the same value as that of a physical contract.
Additionally, the new Labor Code has regulations in employment contracts which are more favorable for employees. In particular, Article 13 adds that “Before recruiting an employee, the employer shall enter into an employment contract with such employee”.
7. Supplement of regulations in prior notice period when unilaterally terminating the employment contract.
For employees, when unilaterally terminating the employment contract pursuant to Clause 2, Article 376, they have to notice the employer in advance:
At least 30 days in case of an employment contract with a fixed term; at least 03 working days in case of an employment contract with a fixed term of under 12 months in cirscumstances issued at point d and đ, clause 1 this article.
Clause 2, Article 35 in this Labor Code regulates the right of employees to unilaterally terminate the employment contract without prior notice in 7 cirscumstances in Clause 2, Article 35.
For employers, they will not have to notice the employees in advance when unilaterally terminating employment contract in following cases:
The employee is not present at the workplace after the time limit specified in Article 317 of this Labor Code;
The employee quits his/her fails to go to work without acceptable excuses for at least 05 consecutive working days;
8. Additional regulations on probationary duration
In Article 258, each probation lasts for the maximum duration of 180 days with regard to employees hired to hold corporate administration positions as provided in the Law on Enterprises, the Law on Management and Use of State Capital Investments in Enterprises.
9. Additional cases of temporary deferral of the employment contract
In Article 309, there are more 4 cases in which employees are entitled to deferral of employment contracts, including:
– The employee is called up for military or militia or self-defence service
– The employee is appointed to a manager of a single-member limited liability company of which charter capital is wholly owned by the State.
– The employee is authorized to implement rights and responsibilities of representatives of owners of state capital invested in enterprises.
– The employee is authorized to implement rights and responsibilities on behalf of an enterprise to their share of capital invested in another enterprise.
10. Enter into a verbal labor contract
The Labor Code 2012 allows the parties to enter into a verbal contract of employment for temporary jobs with a term of less than 3 months.
However, when the Labor Code 2019 comes into effect, the parties can only enter into a verbal labor contract for contracts with a term of less than 1 month, except for:
In respect of seasonal works or certain jobs which have a duration of less than 12 months, a group of employees aged 18 or older may authorize the representative of the group to conclude the employment contract, in which case such employment contract shall be effective as if it was separately concluded by each of the employees.
Must conclude a written labor contract with the employee under 15 years old and his / her legal representative.
The employer shall enter into a written employment contract with the domestic worker.
(Clause 2 Article 1410, Clause 2 Article 1811, Point a Clause 1 Article 14512 and Clause 1 Article 16213 of the Labor Code 2019)
11. Additional regulations in prohibited acts by employers during conclusion and performance of employment contracts
Employers, during conclusion and performance of employment contracts, are not allowed to keep the employee’s original identity documents, diplomas and certificates as well as request the employee to make a deposit in cash or property as security for his/her performance of the employment contract.
Besides, they are not accepted to force the employee to keep performing the employment contract to pay debt to the employer. It is addeed in Clause 3, Article 1714, Labor Code 2019.
12. Employees have a right to unilaterally terminate employment contracts without cause
As prescribed in Clause 1, Article 3515, employees can unilaterally terminate an employment contract without cause provided that he/she meet requirements concerning prior notice period.
At least 45 days in case of an indefinite-term employment contract.
At least 30 days in case of an employment contract with a fixed term of 12 – 36 months.
At least 03 working days in case of an employment contract with a fixed term of under 12 months.
This, in the new Code, employees can unilaterally terminate an employment contract without cause and this is its notable point.
13. Additional cases of taking fully paid personal leave
Apart from cases of taking a fully paid personal leave as the applicable Code (Marriage: 03 days; Marriage of his/her biological child or adopted child: 01 day; Death of his/her biological parent; death of his/her spouse’s biological parent; death of spouse: 03 days). In Article 11516 of this new Code adds a case of adoptive parents’ death.
Employees takes 3 days off as the cases of death of biological parents and spouse’s biological parents).
14. Authorized person can receive salary for the employee
If the employee is unable to receive wages or salaries in person, he/she may authorize others to act on their behalf to receive their wages or salaries pursuant to Clause 1, Article 9417, Labor Code 2019. However, it has to meet 2 requirements:
– Such authorization must be legitimate;
– Employers agree or disagree as the Law regulates that employers “may”, not “are obliged to”, pay wages or salaries via authorized persons.
The new regulations in Article 94 helps improve the limitations of the Labor Code 2012, when it just allowed emplyees to receive salary in person or through bank account, not through an authorized person.
Also, in Article 94, Employers must not restrict or interfere their employees’ spending of their salaries; must not force their employees to spend their salaries on goods or services of the employers or any particular providers decided by the employers.
15. Enterprises hiring employees must pay the costs of account opening.
In the 2012 Labor Code, in case of payment of wages or salaries via bank accounts, this Law allows enterprises to negotiate with employees on who will pay fees for opening and retaining bank accounts.
However, the Labor Code 2019 shall pay these fees.(Clause 2 Article 9618)
16. The retirement age of employees is adjusted, reaching full 62 year males and full 60 year for females.
This is the newly added content of the Labor Code 2019 compared to the 2012 Labor Code. Specifically, according to the Labor Code 2019, every time the salary is paid, the employer must notify the list of salary payments to the employee, clearly stating the salary, overtime salary, night work salary, content and amount deducted (if any).
Regarding the form of payment, employers and employees can agree on the form of time, product or contract payment. Salaries are paid in cash or through the employees’ personal accounts opened at the bank. In case the salary is paid through the employee’s personal account opened at the bank, the employer must pay fees related to the account opening and remittance.
17. The retirement age of employees is adjusted, reaching full 62 year males and full 60 year for females.
Pursuant to the Labor Code 2019 being effective from 01/01/2021, in normal working condition, the retirement age for males is full 60 years 3 months, and full 55 years 4 months for females.
After, for each year it will increase 3 and 4 months for males and females, respectively.
18. 2 days-off to celebrate the National Day
Article 11219 of the Labor Code adds 1 day off to the National Day, on 1/9 or 3/9 depending on a particular year.
1 Article 2. Regulated entities
1. Employees, trainees, apprentices and other workers without labor relations.
3. Foreign employees who work in Vietnam.
4. Other organizations and individuals directly related to labor relations.
2 Article 5. Rights and obligations of employees
- An employee has the rights to:
a) work; freely choose an occupation, workplace or occupation; participate in basic and advanced occupational training; develop professional skills; suffer no discrimination, forced labor and sexual harassment in the workplace;
d) refuse to work if he/she finds that the work directly threatens his/her life or health;
g) exercise other rights prescribed by law.
3 Article 7. Development of labor relations
4. Vietnam Chamber of Commerce and Industry, Vietnam Cooperative Association and other employer representative organizations that are lawfully established shall represent, protect the lawful rights and interests of employers, and participate in development of progressive, harmonious and stable labor relations.
4 Article 8. Forbidden actions
6. Persuading, inciting, promising advertising or otherwise tricking employees into human trafficking, exploitation of labor or forced labor; taking advantage of employment brokerage or guest worker program to commit violations against the law.
5 Article 20. Types of employment contracts
1. An employment contract shall be concluded in one of the following types:
a) An indefinite-term employment contract is a contract in which the two parties neither fix the term nor the time of termination of the contract;
b) A fixed-term employment contract is a contract in which the two parties fix the term of the contract for a duration of up to 36 months from the date of its conclusion.
6 Article 37. Cases in which an employer is prohibited from unilaterally terminating an employment contract
2. The employee is on annual leave, personal leave, or any other types of leave permitted by the employer.
7 Article 31. Reinstatement of employees upon expiry of the temporary suspension of the employment contract
Within 15 days from the expiry of the suspension period of the employment contract, the employee shall be present at the workplace and the employer shall reinstate the employee under the employment contract if it is still unexpired, unless otherwise agreed by both parties or prescribed by law.
8 Article 25. Probationary period
The probationary period shall be negotiated by the parties on the basis of the nature and complexity of the job. Only one probationary period is allowed for a job and the probation shall not exceed:
1. 180 days for the position of enterprise executive prescribed by the Law on Enterprises, the Law on management and use of state investment in enterprises;
9 Article 30. Suspension of an employment contract
1. Cases of suspension of an employment contract:
a) The employee is conscripted into the army or militia;
b) The employee is held in custody or detention in accordance with the criminal procedure law;
c) The employee is sent to a reformatory school, drug rehabilitation center or correctional facility;
d) The female employee is pregnant as specified in Article 138 of this Code;
đ) The employee is designated as the executive of a wholly state-owned single-member limited liability company;
e) The employee is authorized to representative the state investment in another enterprise;
g) The employee is authorized to represent the enterprise’s investment in another enterprise;
h) Other circumstances as agreed by both parties.
2. During the suspension of the employment contract, the employee shall not receive the salary and benefits specified in the employment contract, unless otherwise agreed by both parties or prescribed by law.
10 Article 14. Forms of employment contract
2. Both parties may conclude an oral contract with a term of less than 01 month, except for the cases specified in Clause 2 Article 18, Point a Clause 1 Article 145 and Clause 1 Article 162 of this Labor Code.
11 Article 18. Competence to conclude employment contracts
2. In respect of seasonal works or certain jobs which have a duration of less than 12 months, a group of employees aged 18 or older may authorized the representative of the group to conclude the employment contract, in which case such employment contract shall be effective as if it was separately concluded by each of the employees.
The employment contract concluded by the said representative must be enclosed with a list clearly stating the full names, ages, genders, residences and signatures of all employees concerned.
12 Article 145. Employment of employees under 15
1. When employing a person under 15, the employer shall:
a) Conclude a written contract with the employee and his/her legal representative;
13 Article 162. Employment contracts with domestic workers
- The employer shall enter into a written employment contract with the domestic worker.
14 Article 17. Prohibited acts by employers during conclusion and performance of employment contracts
3. Forcing the employee to keep performing the employment contract to pay debt to the employer.
15 Article 35. The right of an employee to unilaterally terminates the employment contract
1. An employee shall have the right to unilaterally terminate the employment contract, provided he/she notices the employee in advance:
a) at least 45 days in case of an indefinite-term employment contract;
b) at least 30 days in case of an employment contract with a fixed term of 12 – 36 months;
c) at least 03 working days in case of an employment contract with a fixed term of under 12 months;
d) The notice period in certain fields and jobs shall be specified by the government.
16 Article 115. Personal leave, unpaid leave
1. An employee is entitled to take a fully paid personal leave in the following circumstances, at long at is notified to the employer in advance:
a) Marriage: 03 days;
b) Marriage of his/her biological child or adopted child: 01 day;
c) Death of his/her biological or adoptive parent; death of his/her spouse’s biological or adoptive parent; death of spouse, biological or adopted child: 03 days.
2. An employee is entitled to take 01 day of unpaid leave and must inform the employer in the case of the death of his/her grandparent or biological sibling; marriage of his/her parent or natural sibling.
3. The employee may negotiate with his/her employer on taking unpaid leave other than the leave stipulated in Clause 1 and Clause 2 of this Article.
17 Article 94. Salary payment rules
1.Employers shall directly, fully and punctually pay salaries to their employees. In the cases where an employee is not able to directly receive his/her salary, the employer may pay it through a person legally authorized by the employee.
18 Article 96. Salary payment forms
2. Salary shall be paid in cash or transferred to the employee’s personal bank account.
In case of bank transfer, the employer shall pay the costs of account opening and transfer.
19 Article 112. Public holidays
1. Employees shall be entitled to fully paid days off on the following public holidays:
a) Gregorian Calendar New Year Holiday: 01 day (the 1st of January of the Gregorian calendar);
b) Lunar New Year Holidays: 05 days;
c) Victory Day: 01 day (the 30th of April of the Gregorian calendar);
d) International Labor Day: 01 day (the 1st of May of the Gregorian calendar);
dd) National Day: 02 days (the 2nd of September of the Gregorian calendar and the previous or next day);
e) Hung Kings Commemoration Day: 01 day (the 10th of the third month of the Lunar calendar).
2. Foreign employees in Vietnam are entitled to 01 traditional public holiday and 01 National Day of their country, in addition to the public holidays stipulated in Clause 1 of this Article.
3. The Prime Minister shall decide the specific public holidays mentioned in Point b and Point dd Clause 1 of this Article on an annual basis.