As a socialist country, it is unsurprising that the Vietnamese legal system is highly protective of workers’ rights and conditions of employment. Since the mid-1980s, Vietnam has gradually moved towards a market economy, resulting in a radical shift in the manner, and terms and conditions, of employment. In some respects, Vietnamese employees enjoy an even higher standard of legal protection than employees in other countries.
The adoption of market principles relating to employment has moved rather slowly. The grounds on which employees can be dismissed is narrowly defined. The Labour Code and other legislation contain a considerable amount of law that is at best complementary and at worst conflicting. For many employers, labour compliance is a major concern due to the complex maze of laws, decrees, circulars, decisions and other legal documents.
A new Labour Code came into force from 1 May 2013. One of the most significant changes introduced is the recognition of the concept of labour “outsourcing”, a significant step which may well provide a flexible staffing option for foreign investors and enterprises doing business in Vietnam.
We draw your attention to a legal update we have previously prepared on the New Labour Code. Please click here if you would like to read this summary.
Advising on expatriate issues including the structuring of assignments and secondment, employment contracts, performance issues and labour disputes.
Advising a major foreign-invested enterprise on its ability to terminate an employment contract in accordance with the laws of Vietnam and minimising the client’s financial obligations.
Reviewing internal labour regulations, collective labour agreements and HR manuals of various clients from different industry sectors.
Advising a foreign invested company in relation to its intention to set up a recruitment services company in Vietnam.
Conducting a series of seminars and training sessions for the personnel of a major multi-national FMCG company in respect of compliance with anti-bribery and anti-corruption laws.
Advising a foreign multinational corporation on the restructuring of its operations from an employment perspective. As a direct result of the restructuring and due to a change in operations of the company, certain labour contracts were terminated and employees retrenched. Labour contracts for employees continuing in the restructured company were amended to reflect the company’s restructuring and all relevant dialogue with the applicable labour authorities was maintained during the restructuring process.
Advising on Vietnamese regulatory issues in relation to a Performance Share Plan offered to employees in Vietnam.
Advising a leading publisher of scientific and medical literature on potential employment issues arising from the proposed opening of a representative office in Vietnam, and on the legality of specific roles for employees engaged by the Representative Office and the scope for bonus payments to be made to employees based on a global sales incentive scheme.
Advising on the legality in Vietnam and process for establishing a bonus scheme to be paid to a company’s CEO by one of the company’s main shareholders, a foreign entity, in addition to the CEO’s annual salary. The bonus was to be paid offshore and was to be a confidential arrangement between the CEO and the shareholder.