On 14 December 2020, the Government issued a new decree to implement the regulations on labor conditions and labor relationship under the Labor Code 2019 (Decree 145/2020). Decree 145/2020 will take effect as from 1 February 2021. We list below some notable changes to labor regulations under Decree 145/2020. This post is written by Nguyen Hoang Duong and Le Vo Thuy Tien.

New method for labor usage declaration

The employer now can include its first declaration of labor usage in a company registration application in accordance with new procedures for coordinating various business commencement steps of a company under Decree 122/2020.

Regarding the periodical reports on change to the labor usage, the employer now can submit its declaration formulated in prescribed form to the labor authority via National Public Service Portal.

Employee book

The employer is now required to maintain a number of separate employee books (sổ quản lý lao động) at its head office, and each branch and representative office.

Labour contract of a director of SOE

Under the old labor law, employees who are engaged to act as directors of wholly State-owned enterprises (SOE) would be subject to a specific treatment in term of contents of their labor contracts with such SOEs. Under Decree 145/2020, such specific treatment now also apply to those of enterprises having State owns more than 50% of charter capital or of the total number of voting shares. This change appears to follow the new classification of SOEs under the Enterprise Law 2020.

Prior notice period upon unilateral termination of labor contracts

Under Decree 145/2020, employees working in special business or having special jobs will be subject to longer advance notice period. In particular,

At least 120 days in the case of an indefinite term labor contract or a labor contract with a term of 12 months or more; and
At least a period equal to a quarter of the term of the labor contract in the case of a contract with a term of less than 12 months.

The special business and special jobs include:

Aircraft crew; aircraft technical maintenance staff and aviation repair staff; flight dispatch and flight operational staff;
Enterprise managers as prescribed in the enterprises law and in the law on management and use of state capital invested in production and business in enterprises;
Crew working on Vietnamese ships operating overseas; and seafarers hired by Vietnamese enterprises to work on foreign seagoing vessels; and
Other cases stipulated by law.

Dealing with a labor contract which is declared partially invalid and the parties fail to amend invalid contents

Under Decree 145/2020, if a labor contract is declared partially invalid and the parties fails to reach agreement on amending the invalid contents, then

(1) such partially invalid labor contract will be terminate;

(2) right, obligations, benefits of the parties as from beginning of work under the partially invalid labor contract until its termination will be governed by the collective labor agreement (CLA) or labor law, if there is no CLA; and

(3) the employee is entitled to severance allowance in accordance with law.

Decree 145/2020’s new approach seems to suggest that in case the relevant parties fail to agree on amending the partially invalid labor contract, the other valid contents of such labor contract will also be ineffective in the first place. If this is the case, then there may be several issues arising from this regulation:

A labor contract may contemplate various rights and obligations which are not provided under relevant CLA or the labor law, but still valid. Accordingly, it is not reasonable to restrict the parties from performance of valid contractual rights and obligations;
Decree 145/2020’s approach seems to be inconsistent with the Civil Code 2015. Under Article 130 of the Civil Code 2015, when a civil transaction is partially invalid, the invalidity of one part of the contents of such transaction does not affect the validity of the remaining parts; and
The party wishing to exit the employment relationship may rely on this regulation to refuse the performance of its obligations which are not provided or not clear under the CLA and the labor law.
Time periods included in paid working hours

Article 58 of Decree 145/2020 provides new types of time periods which are included in paid working hours. In particular,

Time periods over which trainees and apprentices directly perform or participate in performance of work;
Time periods over which employees who are members of the management board of the internal employee representative organization are employed to perform their duties;
Time spent on health check, medical examination for occupational diseases, medical evaluation for determination of work capacity reduction due to occupational accidents or diseases if arranged or required by the employer; and
Time spent on registration and medical examination for military service if the employees are paid for as prescribed by military service laws.

Employees’ consents on working overtime

Except for special cases provided by the Labor Code 2019, when organizing overtime work, the employer must obtain the employee’s consent on (1) overtime hours, (2) overtime location, and (3) overtime works.

Cases in which overtime work exceeding 200 hours but not exceeding 300 hours are permissible

In addition to the cases provided under the Labor Code 2019, the employer may also organize overtime work exceeding 200 hours but not exceeding 300 hours in the following cases:

The works are urgent and cannot be delayed due to objective factors that are directly relevant to performance of state agencies and units, except the cases specified in Article 108 of the Labor Code 2019;
Provision of public services; medical services; educational and vocational training services; and
Production and business operation works at enterprises whose normal working hours do not exceed 44 hours per week.

Salary payable to untaken annual leave

Under Decree 145/2020, the salary as the basis for paying an employee for untaken annual leave is now the salary written in his/her employment contract of the month preceding the month in which the employee loses his/her job or is retrenched. This new regulation seems to suggest that in order to have a clear basis to claim full salary for untaken annual leave, an employee should demand a written amendment to his/her labor contract if there is any salary increase.

Room for milking and breast milk storage

Employer having 1000 female employees or more must maintain a room for milking and breast milk storage.

Sexual harassment in workplace

Decree 145/2020 introduces a new set of regulations on preventing sexual harassment in workplace. In particular,

Sexual harassment may occur in the form of a request, demand, suggestion, threat, use of force to have sex in exchange for any work-related interests; or any sexual acts that thus creates an insecure and uncomfortable work environment and affects the mental, physical health, performance and life of the harassed person;
Sexual harassment in the workplace includes: (1) actions, gestures, physical contact with the body of a sexual or suggestive nature; (2) verbal sexual harassment: sexual or suggestive comments or conversations in person, by phone or through electronic media; and (3) non-verbal sexual harassment: body language; display, description of sex or sexual activities whether directly or through electronic media;
The internal labor rules of the employer must contain the regulations on preventing and combating sexual harassment in workplace; and
Other rights and obligations of the employer and employees regarding preventing and combating sexual harassment in workplace.

Vietnam Business Law