Below are some significant new points under the New Labour Code which will come into force from 1 May 2013:

• For     matters requiring input from the grassroots trade union (công đoàn cơ sở) such as labour     usage plan or dismissal of certain employees, enterprises, which have not     established a grassroots trade union, will need to consult with the trade     union at the directly superior level (usually the provincial trade union)     instead. In the past, it is not clear whether an enterprise who does not     have a grassroots trade union will need to obtain input from higher trade     union authority.

• The     New Labour Code has recognized the service of “labour outsourcing” or     secondment services. Accordingly, an employee recruited by an enterprise     licensed to conduct labour outsourcing [the sub-lessor] thereafter works     for another employer [sub-leasing employer, and is subject to management     by such other employer but maintains the labour relationship with the     labour outsourcing enterprise. Under the Old Labour Code, the authority     takes the view that labour outsourcing service is not permitted because     there must be an employment contract between the employer and the     employee.

• If     no new contract has been signed within 30 days upon expiry of a seasonal     or a definite labour contract with period of less than 12 month labour     contract, such labour contract will become a 24 month contract under the     New Labour Code instead of an indefinite one under the Old Labour Code.

• A     written notice 15 days must be given to the employee before the expiry     date of his/her definite labour contract.

• The     minimum wage during probationary period is now set at the rate of 85% of     the wage as agreed, higher than 70% under the Old Labour Code.

• Apart     from the structural or technological changes as currently provided in     Article 17 of the Old Labour Code, an employer may now have a very new     ground being “economic reasons” for their legitimate retrenchment of many     employees.

• More     clearly than the Old Labour Code, the New Labour Code specifies that the obligation     to prepare the labour usage plan belongs to (i) the succeeding employer in     case of merger, consolidation, division or separation of an enterprise or     (ii) the previous employer in case of transfer of ownership or right to     use assets of an enterprise.

• Under     the New Labour Code, the employees are entitled to five days of Tet     Holiday rather than four days as prescribed by the Old Labour Code,     increasing the number of public holidays up to 10 days in total.

• Regarding     the maternity leave, the New Labour Code now sets a common prenatal and     postnatal leave length which is 6 months for all female employees.

• Compared     to the Old Labour Code, the New Labour Code removes one type of labour     discipline being “transfer to another position with a lower wage for a     maximum of six months”. Nonetheless, more circumstances for application of     dismissal are given: gambling, deliberate violence causing injury, using     drugs at the workplace, infringement of intellectual property rights of     the employer, or being guilty of conduct which threatens to cause     particularly serious loss and damage to property or interests of the     employer.

• Under     the New Labour Code, the maximum duration of a work permit is two years,     lesser than that prescribed in the Old Labour Code which is 36 months.     Besides, no exemption from a work permit will be applied to the foreign     employees entering into Vietnam to work for a period of less than 3 months     except when they do so in order to offer services.