Vietnam: Changes to Labour Regulations

On 15 December 2018, Decree No. 148/2018/ND-CP ("Decree No. 148") came into effect. Decree No. 148 introduced amendments to Decree No. 05/2015/ND-CP, the legislation designed to provide guidance on the implementation of the Labor Code. The key changes are explained below.

Disciplinary process requirements

Decree No. 148 has simplified labour disciplinary proceedings for employers. It provides that the employer only needs to send one invitation to convene a disciplinary hearing, replacing the previous requirement for three invitations, before it can proceed in the employee's absence. The employee has three working days from receipt to confirm their attendance and must provide a legitimate reason for their absence if they cannot attend. The employer will be allowed to conduct the disciplinary hearing in the employee's absence if the employee does not confirm their attendance, does not have a legitimate reason for their absence, or fails to turn up having confirmed their attendance.

Another change introduced by Decree No. 148 is to allow the authorised representative of the employer to sign and issue a labour disciplinary decision on all types of disciplinary measures. Previously only the legal representative had this power, and the authorised representative was only permitted to sign reprimands.

Calculation of severance and job-loss allowances

Decree No. 148 clarifies that it is the total actual working time under employment contracts ("Service Period") that is used to calculate severance allowance and job-loss allowance.

The following periods were removed from the Service Period and no longer count towards the calculation of severance and job-loss allowance:

1. the probation period;
2. the period of apprenticeship and job training; and
3. the period of temporary detention or custody in relation to a case before a competent state agency, where the agency finds the employee not guilty.

Additionally, the following periods were added to the Service Period:

1. the period during which an employee is off from work for treatment and recovery after labour accidents and occupational diseases; and
2. the period during which an employee is off from work to perform paid citizen's obligations as required by law.

Simplification of labour contracts

Other changes introduced by Decree No. 148 include removal of certain mandatory details from labour contracts (for example: salary review and increase; working time and rest time; labour protection equipment; and social, health and unemployment insurance). Parties can now agree to refer to the employer's internal labour rules, regulations or agreements, internal policies or the relevant law.

Key takeaways

Employees should review their disciplinary policies in Vietnam and update them in line with these changes. Similarly, severance policies should be reviewed to ensure continued compliance.