New Regulations of Decree No.05/2015/ND-CP Guiding the 2012 Labor Code

On January 12, 2015, the Government promulgated Decree No.05/2015/ND-CP detailing and guiding the implementation a number of articles of the Labor Code (“Decree No.05”), which will take effect from March 01, 2015.

The promulgation of Decree No.05 brings back some important guidance from the old Decrees and Circulars guiding the 1994 Labor Code such as: who is the person having the right to sign the labor contract; how to calculate the severance allowance; how to calculate the daily, weekly wage; what is the “other force majeure” events in which the employer can unilaterally terminate the labor contract; etc.

Moreover, Decree No.05 also provides some new guidance.  Here are the ten (10) important ones:

  • The term of the labor contract can be amended only one (01) times without changing the type of the labor contract. This regulation aims to prevent the employer from using an amendment of the labor contract instead of signing a new contract in order to avoid its obligation to sign indefinite-term labor contract with the employee.
  • The employer has to notify the employee about his/her probationary result at least three (03) days before the end of the probationary period except the case in which the probationary period is only six (06) working days under Article 27.3, the 2012 Labor Code.
  • The most common reason to temporarily transfer the employee to another job, which is “due to business and production needs” can only be used if such reason is detailed in the internal labor regulations.
  • The standards to judge whether or not the employee fulfil his/her tasks (as a ground for unilateral termination of labor contract) can be regulated in any internal regulations of the company (not necessary the internal labor regulations) given that such regulations are issued after obtaining the opinion of the grassroots-level employees’ collective.
  • In case of changing structure, technology or economic reasons, if the employer only needs to terminate the labor contract with one (01) employee, the employer is not required to perform the procedure under Article 44, the 2012 Labor Code such as establishing labor utilization plan, notifying the authorities, etc. The economic reasons are also defined as economic crisis, recession or the implementation of state policies regarding economic restructure, international commitments.
  • Decree No.05 now confirms that, in case of terminating the labor contract under Article 44 (changing structure, technology or economic reasons) or Article 45 (merger, consolidation, split or separation, transferring asset ownership or use rights), the 2010 Labor Code, the employer shall pay the employee the job-loss allowance instead of the severance of the allowance. This used to be mistaken by some employers (due to the vague regulations of the 2012 Labor Code) that they have to pay both types of allowance.
  • Collective bargaining has to be held at least one (01) per year, the specific date and time shall be agreed by the employer and the employee.
  • Article 90, the 2010 Labor Code regulates that the wage includes a (i) wage amount which is based on the job or title, (ii) wage allowance(s) and (iii) other additional payments. Decree No.05 provides the detail definitions for such three elements of the wage, which cover everything except for bonus, money for meal(s) which is between shifts, other allowances which are not related to the job or the title in the labor contract.
  • Regarding the disciplinary procedure: the employer has to send the invitations to the attendants at least five (05) working days before the date of the disciplinary meeting. In case the attendant(s) does not come after invited three (03) times, the employer can hold the meeting without such attendant(s).
  • The absence from work without plausible reasons for a total of five (05) working days within one (01) month or twenty (20) days within one (01) year, which is a ground for dismissal, is guided by Decree No.05 as five (05) working days within thirty (30) days or twenty (20) working days within 365 days commencing from the first day of absence.

 –   Written by LE & TRAN | Vietnam’s Premier Boutique Litigation Firm

The Copyright to this document is exclusively owned by LE & TRAN. No part of this material may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of LE & TRAN. We reserve all rights and will take prompt legal action (criminal, civil and commercial proceedings) under all relevant Vietnamese and International laws against any and all infringement(s) by individuals or organizations.