The Covid-19 pandemic has caused various negative impacts on groups of people including enterprises who have suffered from serious reduction in their income and revenue, temporarily closed, or declared bankruptcy. The Vietnamese government has made great efforts in managing to control Covid-19 pandemic together with reviving the economy, ensuring the stable development and social security of the nation. There are a number of legal policies enacted to assist Vietnamese enterprises in response to the Covid-19 pandemic.
1. Provisions under the Labor Code 2019 support enterprises in maintaining and organizing employment.
Major pandemic” is a unforeseeable and unprecedented situation that is prescribed in Vietnamese law as a force majeure event. Specifically, in order to provide supports for enterprises in maintaining their businesses over damages caused by the pandemic, the Labor Code 2019 allows the employers to exercise the following rights:
– To reassign the employee(s) to a different job from the employment contract: Pursuant to Article 29 of the Labor Code 2019, when an enterprise encounters unexpected difficulties due to a major epidemic, the employer is entitled to temporarily reassign an employee against the employment contract but shall not exceed 60 cumulative working days in 01 year; unless otherwise agrreed by the employee in a written consent.
– To suspend the labor contract upon agreement with the employee(s) according to Article 30.1.h of the Labor Code 2019. Salary paying shall follow the agreement and provision under Article 99 of the Labor Code 2019.
– To apply provisions of changes in structure and technology pursuant to Article 42.1 of the Labor Code 2019. If such a change may affect many employees, the employer shall build and implement a labor utilization plan.
– To terminate the labor contract due to mutual agreement with the employee(s), according to Article 34.3 of the Labor Code 2019.
– To unilaterally terminate the contract with the employee: In the case of a major pandemic, the employer, having sought all remedies but still forced to reduce the workforce has the right to duly unilaterally terminate the employment contract according to Article 36.1.c of the Labor Code 2019.
2. Other legal policies for enterprises response to the Covid-19 pandemic
In addition to the general legal framework presribed in the Labor Code, the competent authorities have issued many detailed policies response to Covid-19 situation, specifically:
Resolution No.68/2021/NQ-CP on specific policies to support employers and employees in difficulty due to the Covid-19 pandemic, dated 01 July 2021 (“Resolution 68”): is as the latest compilation of several supportive policies issued by competent authorities. Resolution 68 allows employers to contribute to the occupational accident and disease insurance fund for 12 months (from July 1, 2021 to the end of June 30, 2022) with the rate of 0% of the salary budget. All the deducted amount is used to support employees. With regards to the retirement and death fund, the employer can be allowed to proceed suspending payment but shall not exceed the total period of 12 months. Employers can also borrow money from the banks for severance payment with the interest rate of 0% until the end of March 2022.
– Decree No. 52/2021/ND-CP extending the due date for payment of value added tax, corporate income tax, personal income tax and land rental fee in 2021, which is in force on April 19, 2021: the duration of payment for tax increase, corporate income tax and land rental fee of enterprises shall be extended in 2021, the extension period fslls between 3 and 6 months. In addition, Clause 2, Article 5 of the Decree also clearly states: “Credit institutions, foreign bank branches shall exercise solutions to support customers being businesses, organizations and individuals affected by the Covid-19 pandemic according to regulations of the State Bank of Vietnam.”
– Decree No. 44/2021/ND-CP, Resolution No. 128/2020/QH14 and Circular No. 41/2021/TT-BTC on the deduction of expenses related to Covid-19 from the taxable income of enterprises: Expenses paid by enterprises, for sponsor in cash or assests to the preventions of Covid-19 pandemic, through duly organizations that are authorized to receive donations and sponsorships according to Vietnamese regulations, will be deducted when determining taxable income subject to corporate income tax.
Decision No. 1941/QD-NHNN dated November 16, 2020 announcing the refinancing procedures of the Bank for Social Policies (VBSP) to let employers borrow money to pay wages in accordance with Decision No. 15/2020/ QD-TTg dated April 24, 2020 and Decision No. 32/2020/QD-TTg dated October 19, 2020. The order of implementation is simplified with only 2 steps: Step 1: VBSP sends directly or via postal service 01 copy of the loan application for refinancing to the headquarters of the State Bank; Step 2: Within 03 working days upon receipt of the VBSP’s Refinance Loan Application, the State Bank of Vietnam shall issue a Decision on the refinancing application by the VBSP.
– Official Letter No. 2059/TLD postponing the time of paying trade union dues for enterprises affected by the Covid-19 pandemic: Allow enterprises affected by the Covid-19 pandemic (with 50% or more of the total number of employees subject to compulsory social insurance contributions must be laid off) to extend the time of paying trade union till December 31, 2021.
Official Letter No. 4237/LDTBXH-BHXH dated October 27, 2020 guiding the temporary suspension of contributions to the retirement and dead benefit funds: The Ministry of Labor, War Invalids and Social Affairs provides specific guidance on conditions and time for temporary suspension of contributions to the retirement and dead benefit fundsfor employers affected by the Covid-19 pandemic, replacing the guidance in Official Letter No. 1511/LDTBXH-BHXH dated May 4, 2020. The period to defer payment to the retirement and dead benefit funds is dated from the written request sent by employers but shall not exceed 03 months.
Thanks to these policies and legal regulations, enterprises in Vietnam have been relieved of the burden and damage caused by the pandemic and have received the motivation to stabilize their business and continue to develop.


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