Key changes of the new Vietnamese labour code

Expansion of the scope of the Labour Code

Protection now covers workers who are employed but have not been provided with written employment contracts.

Independent unions

The most important change in the revised Labour Code is the ability of workers in enterprises to exercise their right to form or join a representative organization of their own choosing, which does not have to be affiliated to the Vietnam General Confederation of Labour. The representative organization, however, would only be considered legal when it obtains a registration certificate from a competent authority.

Better protection from anti-union discrimination and interference in unions

The employers are prohibited from discriminating against employees and officials of workers’ representative organizations at grassroots level for the reason of establishment, joining and operation of workers’ representative organizations. Employers are also prohibited from interfering and manipulating in the process of establishment, election, development of work plan and implementation of activities of workers’ representative organizations at grassroots level or discrimination among the worker’s representative organizations at the grassroots level.

Clearer processes and encouragement for collective bargaining

Including collective bargaining with participation of several enterprises via Collective Bargaining Council

New definition for ‘sexual harassment at workplace’

In line with the new ILO convention 190 on violence and harassement, the new Vietnamese law specifies that employers have an obligation to prevent sexual harassment in the workplace and requires processes and procedures for addressing violence and sexual harassment in the workplace.

Wages

• Minimum wage will be adjusted based on minimum living standard of employees and their families.
• The employers must be proactive in building wage scales, payroll and labour norms on the basis of negotiation and agreement with employees.
   

Working hours

A topic of debate was the potential increase of allowed overtime hours to 400 a year. Thanks to efforts of trade unions and other stakeholders, the law now stipulates overtime work cannot exceed 200 hours a year. However, the code has also provided specific regulation for extending the overtime to 300 hours a year for industries such as the production of textile and clothing, footwear, electronics, agro-forestry-fishery businesses—in which seasonal orders require more intensive workloads during certain times of the year. Furthermore, the employer has the obligation to make sure that workers’ overtime hours must not exceed 50 per cent of the hours of their normal working day in a normal working week and cannot be over 12 hours a day, 40 hours a month (the current law is 30 hours/month).

Gradual increase of retirement age:

The retirement age of employees shall be adjusted with a roadmap of increments 03 months of age for male employees and 04 months of age for female employees per year until reaching 62 years of age for male employees by 2028, and 60 years of age for female employees by 2035.

Women are no longer prohibited from doing certain jobs.

Room for improvement remains in realising principles on non-discrimination and gender equality at work. The right to freedom of association, still limited in this Labour Code to workers in enterprises, will also be gradually expanded.

The new labour law will come into effect on 1 January 2021. Fair Wear and CNV Internationaal will continue working with its local partners and brands towards a fairer industry in which labour rights are respected.  We will further support development of the implementation decrees and will continue supporting our partners with knowledge on how to translate the law into practice.