In practice, instead of providing rights and obligations of the employees specifically in the labour contract, an employer may cross-refer to its existing “internal regulations” (quy chế) to impose such internal regulations on the employees. Unfortunately, there is no clear definition of the internal regulations as well as a legal basis for issuing the internal regulations by an employer under labour law. However, there are various provisions, which suggest that employer has rights to issue the internal regulations (such as bonus regulations, regulation on raising wage grade, recruitment, etc).

Article 5.2(b) of the Labour Code 2012 provides that employees have obligation to be subject to the lawful management by the employer. From the view of the employer, one may argue that the issuance of internal regulations is to manage the employees. Theoretically, a labour contract which cross-refers to the employer’s internal regulations will be valid if:

·         The employees have agreed with the contents of such internal regulations before entering into the labour contracts; and

·         The contents of such internal regulations comply with relevant laws.

That being said, there are some legal issues arising from the labour contracts which are entered into on the basis of cross-referring to employer’s internal regulations. In particular,

·         Other than internal labour rules, the labour law is silent about mandatory procedures for issuing, amending and examining the contents of the internal regulations. The Labour Code 2012 generally requires the employer must consult the trade union before issuing regulations related to the rights, obligations, and benefits of employees. Therefore, without the state authorities’ role as an examiner, the employer often has a broad discretion to change the contents of the internal regulations which may cause adverse effects on rights and obligation of the employee; and

·         In the employment relationship, an employee are usually weaker party (who need a job to earn a living). Accordingly, cross-referring to employer’s internal regulations makes the labour contract look like an “adhesion contract” (hợp đồng gia nhập) rather than a fair agreement, which is negotiated and entered into on principles of freedom, fairness in accordance with the Labour Code 2012.

In case of dispute over rights and obligations under such a labour contract discussed above, there is a chance that the Court will rule in favour of employees. Therefore, to mitigate the risks, in addition to making sure all labour contracts and internal regulations comply with the labour law, the employer should specifically provide important rights and obligations of employees in the labour contract instead of cross-referring to the internal regulations.

This post is contributed by Nguyen Hoang Duong, a Venture North Law trainee.