One of the core foundational practice areas at Le & Tran is Vietnam labor law, our Vietnam labor lawyers are a top-ranked in labor counseling and dispute resolution of a wide array of employment matters. With years of experience in litigation and arbitration, Le & Tran’s labor lawyers are skilled at identifying a labor law issue and recommending the necessary steps to take before an issue becomes seriously damaging or costly.
In the employment relationship, there is always the potential for conflicts between the employer and the employee. Depending on the circumstances, there is the real possibility that this disagreement may lead to a labor dispute.
In the beginning, the conflict may arise over very small personal matters. However, these minor issues may culminate in a worker’s strike by a group of employees if the issues are not timely and suitably resolved. If the strike becomes public knowledge, it may ultimately damage the reputation of the business and cause its customers and clients to form the wrong impression of the company regardless whether the strike was complaint with the Vietnamese labor law or not.
Businesses need to be extremely cautious when handling a labor matter in compliance with the labor law of Vietnam. There have been cases that have arisen where employees have not only filed a lawsuit with the court and also used criminal procedures (such as denouncement) to convict the employer for operating a business in an illegal fashion for the sole purpose of reducing the prestige of the company. In other cases, the employer may be given negative media coverage due to the press’ desire to create a scandal. Besides damaging the company’s reputation, it may cause confusion and anxiety to existing employees.
Our Vietnam labor lawyers at Le & Tran are skilled with spotting these serious, non-apparent issues in the employment relationship before they develop into more unpredictable matters. However, should the issue be taken to the courts, Le & Tran’s successful track record over the years ensures that an equitable resolution in the best interests of the client will nearly always be obtained under the Vietnam labor law.
Summary of Vietnam labor law
Vietnam labor law is constantly evolving to meet the needs of the rapidly developing economy. Over the last two decades, the country has witnessed astounding economic growth and foreign investment. With a population nearing 100 million, the growing workforce consists of approximately 1 million adults entering the workforce yearly. Although young and generally well-educated, only approximately 12 to 14 percent of these workers are considered skilled or trained. Nevertheless, there is increasing potential for the future that strongly attracts foreign investment with the continuing development of infrastructure, predictable financial, investment and labor laws, and the growing prevalence of English language education, among other factors.
Vietnam labor law has risen to meet the demands of growth and its implementation in practice is well developed. Nearly all aspects of labor relations are covered in the Vietnamese labor laws including terms of employment contracts, internal labor rules, worker leave, maximum working and overtime hours, minimum wage, trade unions, collective bargaining agreements, social insurance, and many other provisions. There is a new labor code in Vietnam that was passed in 2019 and went into effect on January 1st, 2021 which revises and supplements several provisions of the current labor law including broadening the definition of “employee”, probationary employment contracts, increasing overtime hour limits, retirement age, terms of work permits, unilateral termination, and other important amendments.
Under the labor law in Vietnam, employees and employee rights are generally well-protected compared to other countries in the region. For instance, unilateral termination of an employee by a company is a very complex process and procedures must be strictly followed before it is approved. The Vietnam labor law for foreign workers makes no distinction in labor contracts rights for foreign workers, who are treated on the same footing as Vietnamese workers. However, foreign workers do not have the protection of having a fixed term labor contract automatically revert to an indefinite term labor contract like Vietnamese workers, due to the duration of work permits for foreigners. In addition, the labor law of Vietnam offers some protection to vulnerable groups of employees, such as women, disabled persons, the elderly and veterans.
Further, Vietnam is a member of the WTO and a number of Free Trade Agreements which have called for Vietnam to implement international labor standards. An example is that the recent Labor Law of 2019 codifies certain provisions regarding democratic features and the mandatory dialogues between employers and employees. These provisions are intended to elevate global economic and political trust and legal certainty and to attract foreign investment to Vietnam.
What are the practices of Vietnam labor lawyers?
Labor or employment lawyers provide a number of critical legal services to employees and employers related to the labor laws. Some of the typical areas where labor lawyers in Vietnam assist both companies and individual employees include:
Advising the employee of rights under the labor laws
A labor lawyer can advise an employee as to his or her rights under the labor laws of Vietnam. This includes explaining the applicable laws to the facts of the dispute and the actions available to the client, which may include negotiation, filing a regulatory complaint, litigation or other measures. They also represent employees who are filing a lawsuit against their employer due to discrimination, wrongful termination, denied benefits and wage and hour claims. A labor lawyer can also explain the advantages and disadvantages of each option labor laws in Vietnam and provide advice about the best approach each case.
Compliance with labor laws and regulations
For labor lawyers who represent employers, one common task is to assist employers in complying with numerous labor laws in the most efficient and cost effective means possible. This includes compliance with Vietnam labor laws in the areas of internal regulations, employment contract terms, fixed term versus indefinite employment contract concerns, unilateral and mutual termination, social insurance, business transfers (ex. as in a merger or acquisition), confidentiality and non-competition contractual provisions, claims for discrimination, workplace safety and many more areas. Further, our Vietnam labor lawyers advise businesses in complying with the new labor laws in Vietnam regarding dialogue with employees and employee organizations. In addition, employment lawyers defend employers, or file lawsuits on their behalf, before governmental agencies and in litigation brought in the court system.
When do you need a Vietnam labor lawyer?
An employee should contact an employment attorney as soon as they are aware of a significant issue affecting their employment or their workplace. Any delay in contacting a labor attorney may prevent the collection and preservation of evidence to prove the conduct committed by the employer. In addition, under Vietnam labor laws, there are time limits to exercising rights and filing complaints under the law and any delay risks losing these rights and the potential to recover damages from the employer.
Some of the circumstances where an individual employee should contact a Vietnam labor lawyer include:
- If an employee is injured during the course and scope of his or her work;
- Discrimination by the employer (ex. pregnancy, nationality) or harassment at the workplace (ex. sexual harassment);
- Retaliation by the employer when the employee exercises their rights under the labor law such as attempting to form or join a trade union or requesting overtime pay or leave;
- When employment has been terminated or dismissed in violation of the employment contract or the labor laws of Vietnam;
- If the employer demands that the employee sign an agreement waiving rights to which they are entitled under the labor laws;
- The employee has not received the benefits to which they are entitled under their employment contract and the Vietnam labor laws.
- Unsafe conditions in the workplace that are not remedied by the employer;
- Amendments or addendums to the employment contract that significantly affect the contract terms or the location and scope of work of the employee.
For employers, the need to contact a labor lawyer or an employment attorney begins before the enterprise even begins operations or hires any employees. Workplaces are subject to many different types of regulation by governmental agencies and must comply with all of the provisions of the labor laws of Vietnam as well as other relevant legal codes that are applicable to their line of business. An employment lawyer can help review or prepare contracts and agreements that you use with your employees such as employment contracts, amendments and waivers. Further, businesses utilize employment attorneys in a number of areas related to the labor laws such as advice on internal regulations, social insurance, taxation, workplace safety, and discipline or termination of employees, to name a few.
- A business may also require the services of an employment attorney in any disputes with employees which may include:
- Representation in collective bargaining negotiations with a trade union pursuant to Vietnamese labor law;
- Defending against employee complaints involving discrimination or harassment;
- Navigating the numerous procedures and steps required under the labor law in Vietnam for unilateral termination or dismissal of an employee;
- Violation of non-competition or non-disclosure agreements by the employee;
- Disputes arising concerning wages or social insurance.
In addition, a proficient Vietnam labor lawyer or employment attorney, who is consulted on a regular basis, may be able to spot different potential problems that are not specifically employment-related such as construction issues, fire protection, food safety, and environmental concerns.
Do you always have to talk with a Vietnam labor lawyer before terminating an employee?
Due to the many provisions of the Vietnam labor laws concerning employee discipline or dismissal, a business that disciplines or unilaterally terminates an employee must seek the advice of competent employment attorney before taking any action.
Unlike in other countries, “at will” termination is not allowable under the Vietnamese labor laws. In fact, an employer is restricted by the labor law in the scope of disciplinary measures. It may only issue a warning, a pay freeze for up to six months, demotion, or dismissal.
Grounds on which employers may dismiss an employee for disciplinary reasons are set out under labor laws of Vietnam and include theft or embezzlement, deliberate violence causing injury, sexual harassment, falsifying information during recruitment, and absence from work without leave (for a period of five days without permission or a legitimate reason). Stringent procedures must be followed in order to perform a lawful dismissal (for example, the notice of hearing and procedures in the disciplinary hearing).
In addition, the labor law in Vietnam states that an employer may unilaterally dismiss an employee for other reasons such as the employee becoming sick, injured or unable to work for a period of 12 months. In these cases, an employer is required to provide 45 days’ notice to an employee with an open-term contract. Employers must also generally pay severance to employees who have been employed for 12 months or more. Further, the new labor law states that foreign employees may be terminated if the employee is expelled from Vietnam due to judgements or decisions of the courts and competent authorities, or upon the expiration of their work permit.
Termination based upon redundancy is another avenue for unilateral termination under the Vietnamese labor laws. Employers utilizing this ground are required to draft a “labor usage plan”, discuss the plan with the trade union (if any), and submit the plan to the local labor authority. Redundant employees that have worked for the employer for 12 months or more must be paid a redundancy allowance.
A further ground of termination under the labor laws is when the employee reaches the age of retirement when he or she is entitled to a pension (currently increasing to age 62 for males and age 60 for females).
It is not surprising that, given the difficulties associated with terminating employment, it is common practice for the parties to agree to mutually terminate the employment contract. An employment attorney will also be useful in this capacity in negotiating the proper documentation and a severance package that will comply with the labor laws of Vietnam.
Our Vietnam labor lawyers have over a decade of practical expertise in the provisions of the Vietnam labor laws regarding unilateral termination in the employment context. Both large multinational enterprises to promising start-up companies over the years have trusted our attorneys to provide timely and critical advice in their employment structure and relationships and represent them in any disputes that arise. Further, Le & Tran labor and employment lawyers realize the sensitive nature of employment termination and will utilize their formidable negotiating abilities to explore all legal avenues in order to protect the operations, reputation and long-term goals of their clients.
How much do Vietnam labor lawyers cost?
It is always prudent to consult an attorney versed in the labor laws of Vietnam before your company begins operations. Due to the complexities and employee-oriented provisions of the Vietnamese labor laws, it is imperative that proper procedures for recruitment and hiring, employment contracts, training, compensation and payroll matters, social insurance, and termination procedures, amongst other concerns, are in place before the doors of the business open. In addition, your company needs a competent attorney by its side should any disputes or litigation arise connected to any employment relationship.
At Le & Tran, we offer competitive rates that are set collaboratively with the client, taking into account income, capitalization and future profitability of the business. Our goal at Le & Tran is to establish a long-term relationship with you and your business by earning your trust in our expertise, reliability, hard work, and efficiency. We dedicate ourselves to the belief of founder Stephen Le, who has stated: “Any well trained lawyer can provide legal advice, but only an all-rounded professional can provide you with the tools you need to successfully reach your goals while complying with all the legal requirements”. In short, Le & Tran strongly adheres to the belief that we succeed only if your business is successful.
How are Vietnam labor lawyers and employment lawyers different?
There is a technical difference between the definition of employment lawyer and a labor lawyer. However, the terms are commonly used interchangeably and there is significant crossover between the two areas of practice. A “labor lawyer” typically focuses on laws and litigation concerning unions, collective bargaining, and any other issues regarding organized labor. On the other hand, an “employment lawyer” is usually concerned with the laws and regulations regarding the employee-employer relationship. Often, attorneys will specialize in both employment and labor matters and both types of lawyers utilize various provisions of the labor law in their practice.
When considering retaining a labor or employment lawyer, you should not focus on the terminology, but rather on the background and experience of the professional and their knowledge of Vietnam labor law. For example, does the attorney and law firm primarily focus on the rights of employees or employers? Are they skilled at litigation or focus their practice on advising clients as to proper compliance with the laws? What is their success rate in disputes? Do they possess any testimonials from former clients or awards from the legal community? These questions will serve as more effective guides when choosing the best possible legal counsel for yourself and your business.
How do you find a good Vietnam labor lawyer?
The Vietnam employment and labor attorneys at Le & Tran represent domestic and foreign enterprises on the full spectrum of labor and employment matters. On cutting edge of legal developments, the Firm regularly conducts seminars to inform the business community in Vietnam of the changes to the labor laws and the short and long term implications on their operations. The team is led by Mr. Stephen Le who has been the winner, ranked and shortlisted by a number of independent legal ranking organizations in the South East Asia region including Chambers and Partners- Asia Pacific, Benchmark Litigation and Legal 500.
We assist clients identify potential legal issues and practical risks in managing employer-employee relationships. Our team has extensive experience in representing business and their management before administrative agencies and courts. Le & Tran also advises employers on compliance issues arising under the Vietnam labor laws, thereby assisting clients to ensure that their workplace practices and procedures are up-to-date and conform to applicable laws.
In addition, throughout our years of practice, our Vietnam labor lawyers have encountered a variety of cases involving enforcement of labor judgements. We have successfully settled many complicated cases, assisting enterprises and employees to resolve their disputes, saving time and expense.
Further, our clients have a unique advantage as Le & Tran is a multi-disciplinary law firm covering several critical fields of corporate practice. Our employment and labor attorneys work closely with our tax, corporate and securities, appeals, and international and business litigation groups, which provide the support necessary to overcome the obstacles faced by businesses.
Le & Tran’s Vietnam employment and labor lawyers are internationally recognized and we are always available to answer any of your questions. Our main office is located in Ho Chi Minh City, the business center of Vietnam. Please feel free to contact us at email@example.com to arrange a free consultation.