How do labour disputes in Vietnam get resolved?

How do labour disputes in Vietnam get resolved?

A labour dispute is a disagreement between parties in an employment relationship regarding their rights, responsibilities, and interests. Individual labour disputes between employees and employers and collective labour disputes between employers and labour collectives are examples of labour disputes. The measures and principles of labour dispute resolution outlined in Chapter XIV of the Labour Code 2012 will be used by the competent agency, organization, or individual to settle any labour dispute.

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The following are methods for settling labour disputes: negotiation, grassroots conciliation, settlement of individuals and organizations competent to settle labour disputes.

People's Court's labour conciliator is a person or organization with the authority to settle individual labour disputes. conciliator of labour; Chairman of the People's Committee in the district; Concerning labour rights and conciliators, collective labour disputes can be settled by the People's Court; Collective labour benefit disputes can be settled by the Labour Arbitration Council.

Negotiation is a method of resolving a dispute in which the parties to a dispute deal directly with each other in order to reach an agreement on the settlement of the dispute. In fact, this is the most widely used solution. During the negotiation process, the parties will discuss issues related to the dispute, and propose solutions to resolve that dispute. The decision is made on the basis of agreement between the parties themselves and is not the result of any external pressure.

Conciliation is a strategy for resolving disputes involving third parties; however, conciliators do not make decisions; rather, they only support and direct the parties as they negotiate. Except for disputes regarding disciplinary measures in the form of dismissal or disputes regarding the unilateral termination of the labour contract, individual labour disputes must go through the conciliation procedure of a labour conciliator before requesting a court to settle them, as stated in Clause 1, Article 201 of the Labour Code of 2012. benefits, damages, and compensation when a labour contract is terminated; between employers and domestic helpers; on health insurance in accordance with the law; on social insurance in accordance with the law; on health insurance in accordance with the law on the payment of damages incurred by labourers and businesses and other entities that contract labour abroad. The labour conciliator is required to keep a record of the successful conciliation if the two parties reach an agreement. On the other hand, if the parties are unable to come to an agreement, the labour conciliator will propose a conciliation plan for them to consider. If the parties accept the conciliation plan, the labour conciliator will record that the conciliation was successful. The labour conciliator is required to keep a record of the unsuccessful conciliation if either of the parties rejects the plan for conciliation or if a disputing party has been properly summoned twice but is still absent without a reasonable explanation.

When a request for resolving a collective labour dispute regarding rights is made, the dispute resolution procedure that should be followed is that of the Chairman of the district People's Committee. To consider and resolve labour disputes dynamically, district-level People's Committee chairpersons must base themselves on labour laws, collective labour agreements, registered labour rules, and legal regulations and agreements.

For collective labour benefit disputes, the competent authority is the Labour Arbitration Council. There must be representatives from both sides of the dispute at the Labour Arbitration Council meeting. It is the duty of the Labour Arbitration Council to assist the parties in self-negotiation. The Labour Arbitration Council must document the successful mediation and issue a decision acknowledging the parties' agreement if the parties reach an agreement or accept the mediation plan. The Labour Arbitration Council is obligated to record a mediation that was unsuccessful and give the labour union the right to initiate procedures for a strike within three days if the two parties are unable to come to an agreement or if one of the disputing parties has been summoned for a second time but has not shown up for any reason that could be considered plausible.

Individual labour disputes and collective labour disputes over rights are resolved through trial, in which the Court issues a judgment or decision to settle the case. After the dispute has been settled in other stages without success, the most common method of resolving it is through litigation. In accordance with the stringent guidelines laid out in the Civil Procedure Code of 2015, a judicial body with special state power resolves labour disputes at the Court. The fact that the court's decisions regarding labour disputes are guaranteed to be enforced by state coercive measures is this method of dispute resolution's greatest advantage.

When labour disputes arise, everyone involved emmployers, the labour union, and employees should pay close attention to selecting the best means of resolving them. For efficiency, it is also recommended to consult with lawyers from a labour dispute law firm in Vietnam that specializes in employment law.

 

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Performing Labor Contracts in the Period of Covid-19 Epidemic

The Covid-19 epidemic has seriously affected the development of the economy and society. The situation of businesses being spacing as well as suspension of production and service provision happens regularly in epidemic-affected localities, and that also seriously affects the life stability of employees. Because most enterprises’ financial situations get worse, so the businesses seem like they cannot guarantee income for employees. This is a force majeure and legal event, and the labor law has specific provisions to balance and ensure the interests of employees but also make the best support to enterprises.

 

Performing Labor Contracts in the Period of Covid – 19 Epidemic

 Specifically, according to the provisions of Clause 3, Article 99 of the Labor Code 2019, specific instructions are provided in Official Dispatch No. 264/QHLĐTL-TL of Ministry of Labor – Invalids and Social affairs  about paying salary (known as “ stoppage salary”) for employees during the shutdown period related to the Covid-19 epidemic on July 15, 2021; direct instructions for businesses and employees during the epidemic period, in case of having to suspend work due to an incident that is not the fault of the employer such as a dangerous disease, the employee and the employer agree on the salary according to the following regulations.

In case of having to suspend work for less than 14 working days, the agreed stoppage salary shall not be lower than the minimum wage.

In case of having to suspend work for more than 14 working days, the stoppage salary shall be agreed upon by both parties but must ensure that that salary in the first 14 days is not lower than the minimum wage.

Accordingly, the labor relationship is a civil relationship as well as ensuring the agreement between the parties, however, it is also necessary to pay attention to ensuring the life quality  of the employee, thus stipulating the case of having to suspend work from under 14 days that the parties have the right to agree on a salary which is ensured not lower than the minimum wage; besides, in case of suspension for more than 14 days, this is undesirable in the labor relationship as the damage for the employee is not allowed to work as well as does not guarantee income, and this also for the employer that they are not able to guarantee the output of goods and services provided to the partner, as well as the normal operation of the business, etc. Therefore, the law allows the parties to agree on the stoppage salary in this case.

The epidemic is a force majeure. In the case of having to suspend work for too long as it is unable to judge the progress of the epidemic, to ensure the financial ability of the employer as well as the health and safety of employees, the parties may agree to suspend performing labor contract. The content specified at point h, Clause 1, Article 30 of the Labor Code 2019, allows the parties to agree to suspend the labor contract, therefore we can realize this is also an appropriate regulation in the current epidemic period. Currently, when suspended in performing a labor contract, the employee is not entitled to salary and other rights and benefits as agreed in the labor contract. However, the employee and the employer may have another agreement on employee benefits.

According to Article 31 of the Labor Code 2019, within 15 days after ending the suspension period of the labor contract, the employee must be present at the workplace as well as the employer must accept the employee’s return to resume work under the signed labor contract in case of the valid labor contract, unless otherwise agreed by the parties. Accordingly, the employee and the employer must fully agree on the contents related to the suspension of the labor contract, to avoid issues and disputes arising after ending the suspension period of the performing labor contract.

In addition, Point c, Clause 1, Article 36 of the Labor Law 2019 stipulates that the employer has the right to unilaterally terminate a labor contract in case of natural disaster, fire, dangerous epidemic, enemy sabotage or migration, relocation, or downsizing of production and business under the request of the competent state agency, and the employer has sought all remedies but can’t help reducing personnel. Therefore, in the situation of dangerous epidemics, termination of the labor contract with termination grounds is considered a non – illegal act of unilaterally terminating the labor contract.

However, the grounds for termination because of the dangerous epidemic that the employer has tried all measures to overcome but can’t help reducing the personnel are only necessary conditions that the employer needs to comply with, besides, Employers need to comply with the procedure for unilateral termination of labor contracts in terms of the notice period, as well as done allowances to employees when unilaterally terminating labor contracts according to regulations in law.

ANT Lawyers – A labour dispute law firm in Vietnam with international standard, local expertise and strong international network. We focus on customers’ needs and provide clients with a high quality legal advice and services. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.

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How Probation is Regulated in Vietnam Labour Code?

Probation is an agreement between an employee and an employer on a probationary job in a certain period of time in accordance with the provisions of law. Before entering into a labor contract, the employer and the employee should go through a probationary period to determine the long-term cooperation and attachment between the parties. The probation should comply with the provisions of the Labor Code and relevant guiding documents. The Labor Code 2019 comes into force as of January 1^st, 2020, a number of new regulations accordingly are issued in connection to the probation, which each company should review the matter with its labour lawyers in Vietnam for compliance.

 

Regarding the circumstances which are permitted to enter into a probationary contract, this contract is not applicable to the labor term which is below 01 month.  The Labor Code 2012 does not require that the probationary provision must be stipulated in the labor contract. Accordingly, an employer and an employee may negotiate on the probation, the rights and responsibilities of the parties during the probation period. The parties may conclude a probation contract if there is an agreement on the probation. If the probation work meets the requirements, the employer shall conclude an employment contract with the employee. From these provisions, it can be understood that the employee and the employer should make a separate probationary contract. The labor contract should be signed when the probation is completed and the employee meets the recruitment requirements of the employer. According to the latest provisions in the Labor Code 2019, the employer and the employee may agree on the probation stated in the labor contract or a separate probationary contract. If the probationary provision is stipulated in the labor contract, the employer shall continue performing the existing labor contract at the end of the probationary period once the employee satisfies the requirements. Otherwise, a new labor contract shall be entered into.

The Labor Code determined the restriction of the probation period based on the nature and complexity of the job. The probationary period previously was limited to no more than 60 days for jobs requiring a college or higher professional qualification. Currently, the probationary period is permitted to extend up to 180 days for the executives. The executives play an important role in business and operation of the enterprises, including owner of a sole proprietorship, a partner of a partnership company, chairperson or member of the Board of Member, President of a company, President or member of the Board of Directors, Director/General Director, or holder of another managerial position prescribed in the company’s charter (applicable to the enterprise with no state capital)

Another amendment to the cancellation of the probationary contract, the Labor Code 2019 removed the limitation of the right to cancel. Accordingly, during the probationary period, each party has the right to cancel the probationary contract or labor contract entered into without prior notice and compensation. On the contrary, the employee and the employer may cancel the probation if the probationary job does not meet the requirements that the parties have agreed upon under the Labor Code 2012

Probationary periods are primarily designed to test out whether both employer and employee to match each other at the start of an employment relationship. The enterprises as employers need to have a clear understanding of the principles of entering into a labor contract as well as a probationary contract to avoid potential dispute in Vietnam.

ANT Lawyers is a law firm in Vietnam, recognized by Legal500, IFLR1000. We are an exclusive Vietnam member of Prea Legal, the global law firm network covering more than 150 jurisdictions. The firm provides a range of legal services to multinational and domestic clients. 

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Why do we have to undertake background check before recruitment

Recruitment is the process of screening and recruiting qualified people to meet a job in an organization in general and in particular business. Recruitment plays a very important role in business development. Effective recruitment will provide businesses with a team of skilled, active, creative employees and provide human resources in accordance with the business performance of the business. Only when doing well the recruitment stage can we do well in the next stages. Therefore, businesses need to recruit the right people right the first time as well as arrange them in an important position.

 

Most of the information that enterprise has is provided by the employee and there is no verification of the information. And if the enterprise only relies on the information provided by the employee, it is likely that the employee is dishonest, or causes mistakes and avoid responsibility. To recruit “right employee, right job”, enterprise needs to check the applicant’s background.

Checking employee’s background is to create trust between enterprise and employee. The background check includes: Verify Identification; Verify at home; Verify qualifications and certificates; Verify employment history at old jobs; Verify criminal records in Vietnam.

Verification of the background helps to know personal information, origin, hometown, criminal status of the employee. Thereby, background check will minimize commercial risks; preventing fraud and internal theft better; increase security of data and documents in the enterprise. In particular, for important positions in the enterprise, the confidentiality of enterprise document information is extremely necessary.

Verifying employment history at past jobs is to understand working process and the reason for job termination; obtain an objective view of the necessary competencies, skills and work experience. From there, enterprise could save time in searching for suitable employees as well as saving labor training costs.

In addition, background check improves business efficiency, developes a team of integrity to meet the business requirements of the enterprise. Because recruiting well means finding out people to perform the job with the capabilities and qualities to complete the assigned work, then effective recruitment helps the enterprise perform well its business goal and improve profitability.

Currently, the situation of fraud, diploma trading, or dishonesty in recruitment, many enterprises cannot control and verify all the information that employees provide. Enterprises need to check applicant’s background when recruiting to prevent fraud, internal theft; increasing security of data and documents in enterprises; decrease recruitment time and training costs. Besides, creating trust between businesses and employees; increase employee productivity and product quality as well as increase business profits.  It is suggested to consult with professional background check company with proven track record in Vietnam to help with the local service.

ANT Lawyers – A Law firm in Vietnam has law offices in Hanoi, Ho Chi Minh City and Da Nang.  The lawyers at each law offices in Vietnam have consistently made valuable and important contributions to our profession through the cases we handled on daily basis to facilitate business transaction or represented our clients to access justice.

 

 

 

 

 

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When Should the Employer Send Notice of Termination of Labour Contract to Employee Before Contract Expiration?

Expiration is one of the circumstances which permit termination of labor contract under the Labor Code 2012. Accordingly, the employer must inform in writing to the employee of the terminating date of labor contract at least 15 days prior to the expiration. Termination of labor relationship in each circumstance must follow different conditions and procedures to ensure the interests and obligations of both employee and employer and avoid potential labour disputes.

 

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Previously, an administrative penalty was applied to violations of the labor contract termination notice mentioned above. If the employer fails to inform the employee, the employer will be subject to a warning or a fine with amount from VND 500,000 to VND 1,000,000. However, the Decree 28/2020/ND-CP issued on March 1st, 2020 by the Government has repealed sanction for this behavior.

If the employee continues to work upon expiration of labor contract, both parties will be required to sign a new labor contract within the next 30 days, otherwise the signed contract will become an indefinite-term. Failure of the employer to inform the labor contract termination to the employee does not mean that the labor relationship is automatically extended after the expiration. If both parties fail to sign a new labor contract within the next 30 days, but the employee still do normal assigned job and is paid a full monthly salary, an indefinite-term labor contract is deemed as entered into by them. Any disputes arising out then will be settled based on provisions of indefinite term labor contract and laws.

The Labor Code 2019 repealed the employer’s informing responsibility upon expiration of labor contract except in a few circumstances such as the employee being sentenced to imprisonment, disciplined, expelled, ..., the employer is required to inform the employee in writing the termination of the labor contract.

We are a law firm in Vietnam with international standard, local expertise and strong international network. We focus on customers’ needs and provide clients with a high quality legal advice and services. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.

 

 

 

 

 

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How Mediation and Labor Arbitration Councils Work in Settlement of Labor Disputes?

During and after the Covid-19 pandamic, the financial health of enterprises have been negatively impacted leading to management’s decision to reduce cost through termination of labour contract with employee. The illegal termination of labour contract could lead to disputes between employer and employee which sometime would cost the employer more than it gains. It is important for the employer to engage with labour lawyers to consult before taking the decision to consder factors that would involve. After disputes arise, mediator or labour arbitration councils could be used for resolving disputes.

Individual labor disputes shall be settled through mediation by labor mediators before being brought to the Labor arbitration council or the Court, except for the following labor disputes which mediation is not mandatory: disputes over disciplining under dismissal or unilateral termination of employment contracts; disputes over damages and allowances upon termination of employment contracts; disputes between a domestic worker and his/her employer; disputes over social insurance in accordance with social insurance laws, disputes over health insurance in accordance with health insurance laws, disputes over unemployment insurance in accordance with employment laws; disputes over insurance for occupational accidents and occupational disease in accordance with occupational safety and hygiene laws; disputes over damages between an employee and enterprises, organization that dispatches the employee to work overseas under a contract; disputes between the outsourcing employee and the employer using outsourcing employee.

The mediator shall complete the mediation process within 05 working days from the receipt of the request from the requesting parties or the authority. Both disputing parties must be present at the mediation meeting. The disputing parties may authorize another person to attend the mediation meeting.

In case the two parties reach an agreement, the labor mediator shall make a written record of successful mediation which bears the signatures of the disputing parties and the labor mediator. In case the two parties do not reach an agreement, the labor mediator shall recommend a mediation option for the disputing parties to consider. Where the two parties do not agree with the recommended mediation option or where one of the disputing parties is absent for the second time without a valid reason after having been legitimately summoned, the labor mediator shall make a record of unsuccessful mediation which bears the signatures of the present disputing parties and the labor mediator.

The disputing parties shall be entitled to request the settlement from Labor arbitration councils in the following cases: a disputing party fails to perform the agreements specified in the record of successful mediation; mediation is not mandatory; the labor mediator fails to initiate the mediation by the deadline; the mediation is unsuccessful.

After the Labor arbitration council has been requested to settle a dispute, the parties must not simultaneously request the Court to settle the same dispute.  If within 07 working days from the receipt of the request, an arbitral tribunal is not established; or within 30 working days from the establishment of the arbitral tribunal, it fails to issue a decision on the settlement of the labor dispute, parties shall be entitled to request the settlement from the Court. In case a disputing party fails to comply with the decision of the arbitral tribunal, the parties are entitled to bring the case to Court.

If the client needs any other information or requires for further advice, our lawyers at ANT Lawyers in Vietnam will be available for service.

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How Law Regulates Employing People with Disabilities in Vietnam?

Disabled people are those who have one or more body parts or functional impairments which are manifested in the form of disability, which makes it difficult for labor, living and learning. The State sponsors the right to labor and creates jobs for disabled workers, has policies to encourage and give incentives to employers to create jobs and to accept workers with disabilities to work in Vietnam.

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The disabled people are inherently disadvantaged compared to other ordinary people, so to compensate for the unfortunate disabled people, the government has established mechanisms and policies for disabled employees and enterprises employing disabled laborers, being regulated in the law as following.

Corporate Income Tax

The company will enjoy corporate income tax exemption for income from goods and services of enterprises with an average number of disabled employees in the year accounts for 30% or more of the total labor of the enterprise.

Financial Support to Improve Work Conditions

Enterprises are provided with financial support to improve working conditions and environment for disabled workers, the support level is based on the proportion of people with stable employment at production and business establishments. The President of the provincial People’s Committee decides the level of funding to support the improvement of working conditions and environment for production and business establishments employing 30% or more of the disabled employees.

Land, Ground, Water Surface Rentals

Enterprises are exempted from land rents, ground and water surface rents for land, ground and water surface in service of production and business activities for production and business establishments employing 70% or more of their disabled employee. Enterprises are entitled to a 50% reduction of land rents, grounds and water surface for production and business activities for production and business establishments employing from 30% to less than 70% of laborers are disabled employees. During the period of exemption or reduction of land rents, premises, water surface, business and production establishments must not convert, transfer, donate, give or lease land use rights, ground and water surface and must not mortgage, pledge, guarantee, contribute capital in, joint venture with land use rights, ground and water surfaces in accordance with the Law on land.

Loan Support

The enterprises which have disabled employees may borrow capital from the national fund for employment when meeting conditions such as: having feasible capital borrowing projects competitions in the locality, in line with business and production lines, attracting more workers to work stably; loan project with certification of the competent agency, organization where the project is implemented; secured loan.

Besides, the enterprises which have disabled employers have to follow a number of requirements.  i) do not distinguish between disabled workers and other workers.  The violation of such would be sanctioned from 3 – 5 million VND; ii) ensure that the labor conditions are suitable for people with disabilities, specific businesses must ensure the labor conditions, labor tools, occupational safety, hygiene and labor appropriate for people with disabilities and regularly take care of their health by organizing periodic health check at least 06 months/time; must consult with the defective labor when deciding on the policy relating to them. The violations of such activities will be fined from 1 – 15 million VND; iii) do not use disabled workers who have reduced labor capacity from 51% or more to overtime, working at night, doing heavy, malicious, dangerous or exposed work with hazardous substances.  In the event of a breach of such regulations, the enterprise will be fined from 1 – 15 million VND; iv) arranged for workers with disabilities who are allowed to take leave for 14 days for disabled workers with full 12 working months.

The above provisions are the basic labour regulations applicable to enterprises employing disabled workers.  While there are benefits, there are also challenges in terms of labour regulations compliance.  Consulting with labour lawyers would be needed to help the employer complying including drafting labour contract, drafting internal labour regulations, terminating the employment relationship to best manage the work force in the most effective ways. From the management point of view, the employers need to understand, and be aware of the policies that the state offers for their business as well as the obligations that the business needs to do for disabled workers to utilize and follow.

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New laws on labor dispute mediators

ANT Lawyers employment practice offers counseling service in the Vietnam labour and employment compliance and dispute matters. Our Vietnam employment lawyers often keep track with changes in the Vietnam labour code, the Vietnam employment laws to provide the clients with the best advice. The recently issued Circular 08/2013/TT-BLDTBXH is guiding the selection, appointment, re-appointment for mediators for solving labour disputes and dismissal of labour conciliators as prescribed in Decree No. 46/2013/ND-CP of the Government which details the implementation of a number of articles of the Labor Code on labour disputes in Vietnam.

1.Each district, town and provincial city shall have labour mediators. Based on the number of firms and the level of labour disputes in the area, the Department of Labour, Invalids and Social Affairs shall determine the amount of the labour mediators;

2.Department of Labour, Invalids and Social Affairs is responsible for receiving requests for the mediation of labour disputes, disputes over contracts of labour. The party that is requesting mediation can suggest a labour mediator and the Department of Labour, Invalids and Social Affairs will appoint the mediator to involve in the labour dispute.

3.Dismissal of labour conciliators in one of the following cases:a) There is an application for resignation under the labour mediator model No. 05/HGV attached to this Circular. b) Having 2 years of continuous assessment tasks that are not completed in accordance with Article 8 of this Circular. c) In case there are violations of law, an abuse of their credibility or authority. His responsibility is detrimental to the interests of the parties or the interests of the state during the reconciliation process in one of the following cases: i) One of the provisions of Article 3 of the Law on Anti-Corruption; ii) Perform reconciliation duties not impartial or not objective The Chairman of the District’s People’s Committee, representing the Department of Labour, Invalids and Social Affairs in the district level, shall preside over the meeting to consider the level of illegal labor mediation in the presence of the labour mediator and the parties relating to the violations of labour mediation. Minutes of the meeting must be signed by the labour mediator and the representatives of the involved parties. This Circular takes effect from July 1, 2013.  If Circular 22/2007/TT-BLDTBXH of October 23^rd 2007 of the Ministry of Labour, Invalids and Social Affairs is guiding on the organization and operation of this department and the mediators and labour regulations in a contrary way to this Circular, this Circular shall be effective as from the date when it is effective.

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