Despite amendments in 2002, 2006 and 2007, a number of provisions of the Labour Code are no longer suited to the economic environment created by Viet Nam’s accession to the World Trade Organisation (WTO). Therefore, the Government has drafted a new code to further amend the current Code and better protect the legal rights of both parties in the labour relationship.

The draft provides that during any probationary period, an employee must be paid at least 80 per cent of the regular salary for the job and no less than the lawful minimum wage in effect. The draft also prohibits employers from requiring their employees to provide any security for the labour contract. The term "security" is deemed to include mortgaged assets, originals of personal identify papers, degrees or certificates, or forcing employee to make commitments that may limit any of their other legitimate rights.

The Draft dedicates an entire chapter to training and job skills improvement. Under this chapter, it is the employer’s responsibility to organise training to improve the job skills of its current employees and to retrain those employees who are redeployed to new jobs within the enterprise. In order to increase the skill levels of workers, Vietnamese enterprises which offer apprenticeships and on-the-job training shall receive tax exemptions (Article 71).

The draft code also raises the maximum number of overtime hours an employee can be required to work in a year from 100 to 300 hours. It also modifies and clarifies the minimum requirements for rest breaks during working hours, breaks for shift changes, public holidays, personal leave, and nighttime working hours. For instance, night hours from Thua Thien-Hue to the north are defined as 10pm to 6am, but from Da Nang to the south, they are as 9pm to 5am.

The draft promotes the employment of women workers, introducing low-interest rate loans, aid packages from the national employment settlement fund and tax reductions for enterprises which employ between 10 and 100 women and in which women constitute over half the enterprise’s total workforce, or more than 100 women where women constitute over 30 per cent of the enterprise’s total workforce.

The draft also clarifies the employer’s responsibilities when hiring disabled workers. Under Article 183 of the draft code, the enterprise must ensure that disabled workers make up at least 2-3 per cent of their average monthly workforce. An enterprise which fails to meet this quota shall be required to contribute a sum of money to the local employment fund established for the purpose of creating jobs for the disabled. The amount of this contribution shall be determined by multiplying the regional minimum wage by the number of disabled workers that an enterprise should have hired according to the quota.

The draft also dedicates a chapter to foreigners working in Viet Nam. A foreigner working in Viet Nam must: (i) be at least 18 years of age. (ii) possess technical skills and knowledge appropriate to the work requirements, (iii) be healthy to work, (iv) have no criminal record either inside or outside Viet Nam, and (v) possess a work permit.

The draft code entitles an employer to unilaterally terminate a labour contract due to economic reasons. However, this provision may only be if the enterprise, following best efforts, has no choice but to scale down production and reduce its workforce (Article 46.3).

While the current draft includes progressive measures in terms of women and disabled workers, further consultation with the relevant authorities, enterprises and the public will be required before the draft code can be submitted to the National Assembly for consideration.

(Source: VietNamNet)