In May 2019, a draft amendment to the current Vietnamese labour code (the “Draft No 2“) was submitted to the National Assembly, pending approval in November 2019. If passed, the Draft No 2 would replace the current Labour Code No 10/2012/QH13 (the “Labour Code“). Major changes proposed in the Draft No 2 are explained below.

Clarification of labour contracts

The definition of labour contract is expanded in Draft No 2 to cover any agreement having contents of scope of work, salary, management, administration and supervision from one side to the other. Labour contracts can be made via instant electronic message (eg WhatsApp) or, if for less than one month, verbally. Parties are not allowed to enter into annexes for the purpose of amending the term of a labour contract.

Representative organisations (ROs)

Draft No 2 introduces three key amendments for ROs:

  1. Increased employee rights on establishment and participation in ROs, including a general right for employees to join any RO of their choosing.
  2. Additional requirements for RO leaders.
  3. Clearer objectives regarding the mission, purpose and charter of ROs.
Reducing discrimination against female employees

Under Draft No 2, female employees are no longer prohibited from doing specific jobs and instead it is prohibited to assign women “work which has an adverse effect on the ability to bear and raise a child”. A definition of sexual harassment in the workplace is also provided, having not been expressly recognised in the Labour Code.

Employee rights for unilateral termination

An employee may terminate their labour contract under Draft No 2 by providing the following notice:

  1. For an indefinite-term labour contract – 45 working days.
  2. For a definite-term labour contract – 30 working days.
  3. For a seasonal labour contract – 3 working days.

Employees may also terminate their labour contracts without notice under Draft No 2 if: not assigned to the correct workplace; not paid contractually agreed wages; maltreated, harassed or coerced; or, unable to work because of pregnancy.

Other changes in Draft No 2 include: an increase in maximum overtime hours from 300 to 400 hours per year; an increase in the retirement age from 60 to 62 years for men and 55 to 60 years for women; and, the inclusion of one public holiday for the Vietnam War (bringing the total number of public holidays to 11).

Key takeaways

Employers should keep a lookout for updates on Draft No 2 that is anticipated to be passed in November 2019 and ensure that their employment arrangements are compliant with legislative changes.

Fatim Jumabhoy
Fatim Jumabhoy
Partner, Singapore
+65 6868 9822
Gareth Thomas
Gareth Thomas
Partner, Hong Kong
+852 2101 4025
Tess Lumsdaine
Tess Lumsdaine
Senior Associate, Hong Kong
+852 2101 4122
Rebecca Lim
Rebecca Lim
Associate, Singapore
+65 6868 8063

Disclaimer

Herbert Smith Freehills LLP is licensed to operate as a foreign law practice in Singapore. Where advice on Singapore law is required, we will refer the matter to and work with licensed Singapore law practices where necessary.