Hanoi, Vietnam

The Implications of the New Labour Code for Foreign Companies in Vietnam

By David Lang and Nga Dinh, Viettonkin Consulting

Vietnam has approved an amended Labour Code, which came into effect in January 2021. Most of the code remains the same; however, changes have been introduced in respect of hiring and firing employees. This is a big step towards aligning with international labour standards, as the government integrates into the larger global economy.

1. Hiring the employees

Regarding working hours, the new code states that normal working hours cannot exceed eight hours a day or 48 hours per week. However, the working hour limit remains the same at 48 hours per week. As seasonal labour contracts have been removed, employers have only two forms of labour contract: indefiniteterm labour contracts and definiteterm labour contracts of a maximum of 36 months. Moreover, electronic labour contracts in data message form are now formally accepted.

From a recruitment perspective, probationary periods can last up to 180 days for managerial positions, which greatly favour an employer. Employers and foreign employees may enter into multiple definite-term labour contracts. For example, the maximum duration of a work permit is two (2) years, instead of four (4), and can be renewed on an unlimited basis. This regulation aims to guarantee that the term of the expat employee’s labour contract shall be consistent with his/her obtained work permit.

2. Unilateral termination by an employee

From an employee perspective, an employee now has the right to unilaterally terminate a labour contract ithout any reason, under the Labour Code 2019. However, employees need to give their employers’ proper notice in advance: at least 45 days in the case of an indefiniteterm labour contract, at least 30 days in the case of a definite-term labour contract of 12 to 36 months, and at least three working days in the case of a definite-term labour contract of fewer than 12 months.


David Lang

David Lang

GGI member firm
Viettonkin Consulting
Auditing and Accounting, Tax, Law Firm Services, Advisory
Hanoi, Vietnam
T: +84 94 5086038
E: This email address is being protected from spambots. You need JavaScript enabled to view it.
W: viettonkinconsulting.com

Founded in 2009, Viettonkin is a multidisciplinary group of consulting firms specialising in accounting, legal, and a one-stop solution to FDI enterprises worldwide. The FDI consulting company aims to facilitate and connect investors in Southeast Asia with the rest of the world.

David Lang is the Founder and CEO of Viettonkin. He has over 10 years of experience, focused on FDI investment and supporting worldwide enterprises.
Nga Dinh

Nga Dinh

GGI member firm
Viettonkin Consulting
Auditing and Accounting, Tax, Law Firm Services, Advisory
Hanoi, Vietnam
T: +84 94 5086038
E: This email address is being protected from spambots. You need JavaScript enabled to view it.
W: viettonkinconsulting.com

Nga Dinh is an HR Manager at Viettonkin with considerable expertise in employee relations and legislation.


Published: Employment Law Newsletter, No.10, Spring 2021 l Photo: Hanoi Photography - stock.adobe.com

Ggi Logo 150x109px

GGI Global Alliance AG

Sihlbruggstrasse 140
6340 Baar
Switzerland

Contact

T: +41 41 7252500
F: +41 41 7252501
This email address is being protected from spambots. You need JavaScript enabled to view it.
www.ggi.com