On 14 December 2020, the Government promulgated Decree No. 145/2020/ND-CP detailing and guiding the implementation of a number of articles of the Labor Code regarding labor conditions and labor relation (“Decree 145”). Such Decree provides for labor management, labor contract, labor outsourcing, dialogue at workplace, salary, working hour & rest hour, labor discipline & material liability, female employees & gender equality, domestic worker and labor dispute.

Decree 145 will be effective from 01 February 2021 and contains the following noteworthy points:

1. Report on labor usage

Deadline for submission of periodic reports on changes of employees: before 5 June (for biannual report) and before 5 December (for annual report). Report is made in accordance with the template stipulated in Decree 145 and could be submitted via National Public Service Portal.

2. Advance notice period upon unilateral termination of labor contracts regarding special works and business lines

With respect to some works in aviation industry (aircrew members, aircraft maintenance technicians, etc.), enterprise managers as specified by Law on Enterprises, crewmembers working on Vietnamese vessels operating overseas, crewmembers dispatched to foreign vessels by Vietnamese dispatching agencies, advance notice period required when the employer or employee unilaterally terminates the labor contract is:

• For an indefinite term labor contract or a labor contract with a term of 12 months or more: at least 120 days.

• For a labor contract with a term of less than 12 months: at least ¼ of the contractual term.

3. Severance allowance

The employer shall not have to pay severance allowance in the following cases:

• The employee is eligible to enjoy pension in accordance with the Labor Code and laws on social insurance.

• The employee is absent from work without justified reasons for a period of 5 consecutive working days or more.

4. Actual working period used to calculate severance allowance, job loss allowance

• Probationary period is considered as actual period working for the employer.

• Rounding rule for actual working period is changed in comparison with current provisions. Specifically, a period of up to 6 months shall be rounded up to ½ year, a period of more than 6 months shall be rounded up to 1 year.

• Supplementing specific provisions on calculating actual working period in some special cases such as the employee works under consecutive labor contracts, the employee keeps working after company division, separation, merge or consolidation.

5. Salary used to calculate severance allowance, job loss allowance

For an employee working under consecutive labor contracts as stipulated in Article 20.2 of the Labor Code (i.e. the employee keeps working upon expiration of a definite term labor contract), salary used to calculate his/her severance allowance or job loss allowance is the average salary of the last 06 months before the last labor contract is terminated. In case the last labor contract is declared as invalid due to lower salary than the regional minimum salary announced by the Government or the salary specified in the collective labor agreement, salary used to calculate severance allowance or job loss allowance shall be negotiated by both parties but must not be lower than the regional minimum salary or the salary specified in the collective labor agreement.

6. Settlement of invalid labor contracts

• Removing provision that within 03 working days from the date of receiving decision on declaration of partial invalidity of a labor contract, the parties have to amend and supplement such labor contract.

• Removing the limitation of 12 months as maximum when calculating the actual working period of the employee in order to return the difference between agreed salary and salary stipulated in the labor contract which is declared as invalid due to lower salary than the one stipulated by the laws, internal labor regulations or collective labor agreement.

7.Dialogue at workplace

Comparing with the current provisions, Decree 145 has more detailed provisions on contents of an internal workplace democracy regulations; participants in a dialogue; conditions for holding a periodical dialogue, an ad hoc dialogue when requested by either party or over an incident.

Employers using less than 10 employees do not have to hold employee conferences and issue workplace democracy regulations.

8. Overtime salary

Removing provision on maximum actual working hours in a month (208 hours) when calculating hourly salary in a normal working day to calculate overtime salary. 

9. Time included in paid working hours

The following time periods are included in paid working hours in additions to the ones stipulated by the current laws:

• Time periods over which trainees and apprentices directly perform or participate in the performance of work.

• Time spent on health check-up, 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 employers.

• Time spent on registration and medical examination for military service if the employees are paid for as prescribed by military service laws.

10. Overtime

Supplementing cases in which overtime work exceeding 200 hours but not exceeding 300 hours is permissible:

• Provision of public services; medical services; educational and vocational training services.

• Direct production and business operation works at enterprises of which normal working hours do not exceed 44 hours per week.

Time limit for notification to the Department of Labor, War Invalids and Social Affairs of the overtime work exceeding 200 hours but not exceeding 300 hours is 15 days from the initiation date of the overtime work.

Template of agreement on overtime is also stipulated in Decree 145 for reference.

11. Periods included in working time as the basis for calculation of annual leave & Determination of annual leave days in case an employee has an incomplete month of work

In this regards, Decree 145 has 2 new provisions in comparison with the current ones:

• Suspension period is only calculated if after which the employee is exonerated or exempt from disciplinary actions.

• Removing detention period after which the employee is released and goes back to work after being declared innocent by competent state authorities.

In case an employee has an incomplete month of work, it will be considered a complete month (01 month) when calculating annual leave days if the total working days and paid leave days make up of at least 50% of the normal working days of the month.

12. Salary as the basis for paying an employee for untaken annual leave days

Provisions of Decree 145 are changed in comparison with the current ones. Specifically, the salary used is salary under the employee’s labor contract of the month preceding the month in which the employee resigns or loses his/her job.

13. Internal labor regulations

Employers using less than 10 employees are not obligated to issue written internal labor regulations but have to specify agreements on labor discipline and material liability in labor contracts.

14. Orders and procedures for labor discipline

Supplementing provisions on time limit during which the employer has to notify the mandatory participants of the labor discipline meeting (at least 5 working days before the meeting is held). However, Decree 145 removes provision on time limit during which the mandatory participants have to confirm their participation (current provision: 3 working days from the date of receiving the notification of the meeting).

15. Female employees and gender equality

If a female employee does not have the need to take leave in menstrual period or rest period while nursing a child under 12 months of age and the employer agrees to her working during such periods, she will be entitled to, in addition to the salary paid for the rest time as stipulated by the laws, an extra salary that corresponds to the amount of works done by her during the rest periods.  The untaken menstrual leave shall not be included in the overtime hours.

A room for expressing milk and breast milk storage is mandatory if an employer employs 1000 female employees or more.

16. Preventing and combating sexual harassment in the workplace

Decree 145 has a separate section providing for sexual harassment in the workplace including forms of sexual harassment, definition of workplace, main contents of employers’ regulations on preventing and combating sexual harassment in the workplace.