Question 1: Why do workplace democracy regulations matter?

The Government of Vietnam requires higher standards of democracy to fulfill its commitments regarding labor standards in free trade agreements, including the EU-Vietnam Free Trade Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.  As a result, starting from January 1, 2021, the Labour Code of 2019 and its implementing provisions mandate dialogues in the workplace and the establishment of democratic regulations.

In addition to annual periodic dialogues, employers must conduct ad-hoc dialogues upon the request of either the company or its employees.  Furthermore, employers are required to organize ad-hoc dialogues with employees in the following seven circumstances:

• Issuing regulations for evaluating employee job performance.
• Terminating employment due to restructuring.
• Implementing a labor usage plan in the event of restructuring.
• Formulating wage scales, wage tables, and labor norms.
• Issuing a bonus scheme.
• Establishing internal labor regulations.
• Temporarily suspending work to investigate an employee’s violation of labor discipline.

To facilitate the required dialogues mentioned above, employers must establish workplace democracy regulations that outline the principles, participants, and procedures for conducting these dialogues.

Question 2: What happens if employees disagree with their employers’ opinions during discussions?  Will the employer have to concede to them?

The dialogue is only a formality requirement to obtain the opinions of the employees, their consent is not impactful to the decision of the company.  The employee’s consent is not mandatory.

Question 3: Does the workplace democracy requirement focus solely on holding dialogues?

 No, it does not.  While holding dialogues is important, employers are also required to share a wide range of labor information and documents to facilitate these discussions.  This includes:

• Information about the employer’s production and business situation.
• Labor documentation related to the rights, obligations, and responsibilities of employees, such as collective labor agreements, internal working regulations, wage scales and tables, labor norms, and other internal regulations and rules.
• Details about the allocation and use of reward funds, welfare funds, and any other funds contributed by employees, if applicable.
• Information regarding the collection and payment of trade union dues, as well as premiums for social insurance, health insurance, and unemployment insurance.
• Emulation, commendation, and rewarding, as well as disciplining, and addressing complaints and grievances related to employees’ rights, obligations, and interests.
• Any other content as prescribed by law.

Question 4: The publication of such a wide range of information is obviously not what the employer wants to do.  What suggestions do you have for helping the employer mitigate the impact?

Here are some tips:

• Provide a summary instead of detailed information;
• Use a channel that employees typically do not access, although it is publicly available.

Question 5: We acknowledge that dialogues and workplace democracy are essential.  What if the employer fails to comply with these requirements?

Failing to conduct these dialogues can render an employer’s actions illegal.  For example, a layoff due to restructuring could be deemed unlawful if the dialogue requirements are not met, resulting in significant compensation liabilities for the employer to affected employees.

An administrative fine of up to 20 million VND (approximately 800 USD) will be imposed for failing to issue workplace democracy regulations or conduct dialogues.