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THE LABOR CODE 2012

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The Labor Code 2012 (“Labor Code 2012”) has been supplemented many important points in labor relationship in Vietnam, such as: labor agreement, termination, disciplines, salary and wages, working time and relaxing time, foreign labors, etc.; and Labor Code 2012 was also added new concept of labor subletting service.

  1. Labor Contracts
      a. Execution of labor contracts
      – Labor Code 2012 requests the parties to negotiate in writing the protection of technology and business secrets if the employment directly relates to these.
      – Labor Code 2012 was supplemented within the prohibited activities of the employer in execution and implementation of labor contracts.
      – Labor Code 2012 defines the term of “specialized or highly technical skills” in appropriate way with the suitable probation. Also, the minimum applicable wage in probation was increased up to 85 percents of the wage for relevant jobs.
      b. Invalid labor contracts
      – The issues of invalid labor contract were put in a separated section in the Chapter of Labor Contract, wherein new particular cases of entirely invalid contracts and their consequences.
      – Particularly, if the labor contract is invalid because the person signing the contract was not fully authorized, the labor management authorities will request parties sign again in accordance with the law.
      – The Court is no longer the only authority to declare a contract invalid. This competence is also granted to the Labor Inspectors.
      c. Termination of labor contract
      The Labor Code 2012 also concerns:
      – To omit the circumstance of unilateral termination in case the employee is disciplined in the form of dismissal and the case of the operation termination of the employer being an organization.
      – To admit the new circumstance wherein the employee does not present him/herself at work within fifteen (15) days after the labor contract suspension period has been terminated, except otherwise agreed between the parties.
      – To supplement the unilateral termination right of the employer in case of restructuring or “economic reason” that makes many employees lose their jobs.
  2. Salary and wage
      – The calculation of wages for night overtime is also changed. Therefore, besides the amounts as before, the employee will receive a new bonus equivalent to 20% of the daytime wage.
  3. Work and rest time
      – The extra working hours may not exceed 30 hours per month and 300 hours per year
      – Tet public holidays will expand up to 5 days
      – Maternity leave will be extended up to 6 months
  4. Labor disciplines
      – There is no longer the penalty for transfer to another position with a lower wage for a maximum period of six months
      – New labor discipline violations are added under penalty of dismiss
  5. Labor safety
      – Employer must organize an annual medical examination for its employees.
  6. Foreign labors
      – There are new changes in foreign labor registration in foreign organization.
      – Work permit will be decreased to not exceed 24 months.
  7. Labor subletting service
      – The business of labor subletting service is a conditional business activity that may be applied for certain types of employment.
      – The term of subletting may not exceed 12 months.
      – The sublease employee must not be paid lower than the others working the same work or having the same level.
      – The sublease employer must not transfer sublease employee to another employer.
      – The labor subletting contract must not have terms or conditions different from the labor contract between the sublease employee and labor subleasor.

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(1)The Labor Code 2012 was promulgated by the National Assembly XIII on 18th June 2012 and will come into effect from 1st May 2013