Exclusive Member of Employment Law Alliance (ELA)

Published: December-2023

We are thrilled to be the exclusive firm in Vietnam to join the esteemed ranks of Employment Law Alliance (ELA), a highly selective global network of independent law firms specializing in employment and labor law.

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Employment Litigation – Attorneys for Labor Law

At Le & Tran, Vietnam labor law is one of our core practice areas, and our team of labor lawyers is highly regarded for their expertise in labor counseling and dispute resolution. With extensive experience in litigation and arbitration, our lawyers excel at identifying labor law issues and providing timely recommendations to address them, preventing potential damage or financial implications.

Within the employment relationship, conflicts between employers and employees can arise. These disagreements have the potential to escalate into labor disputes, depending on the specific circumstances involved.

Initially, conflicts in the workplace may stem from minor personal matters. However, if these issues are not promptly and effectively resolved, they can escalate to the point where a group of employees may go on strike. If news of the strike becomes public, it can potentially harm the reputation of the business and create a negative perception among customers and clients, regardless of whether the strike complies with Vietnamese labor law or not.

Businesses must exercise utmost caution when dealing with labor matters to ensure compliance with Vietnam’s labor law. There have been instances where employees not only filed lawsuits against their employers but also resorted to criminal procedures, such as denouncement, with the intention of convicting the employer for operating illegally and tarnishing the company’s reputation. In some cases, negative media coverage can further exacerbate the situation, as the press may seek to create a scandal. These actions not only damage the company’s reputation but also create confusion and anxiety among existing employees. It is crucial for employers to handle labor issues diligently and seek legal counsel to navigate potential risks and protect their interests.

At Le & Tran, our team of Vietnam labor lawyers excel at identifying and addressing significant but often overlooked issues in the employment relationship before they escalate into more complex and unpredictable matters. However, in the event that the dispute requires court intervention, our extensive experience and proven track record assure clients that a fair resolution, aligned with the best interests of the client, will be sought under the framework of Vietnam labor law. We are committed to advocating for our clients and achieving equitable outcomes in labor-related cases.

Summary of Vietnam labor law

Vietnam’s labor law has undergone significant development to accommodate the needs of its rapidly growing economy. With remarkable economic growth and increased foreign investment in the past two decades, the country has seen a rising workforce, with nearly 1 million adults joining each year. While the workforce is predominantly young and relatively well-educated, only a small percentage possess the necessary skills and training.

Nonetheless, Vietnam presents a promising investment opportunity for the future. Factors such as infrastructure development, stable financial and labor laws, and the growing prevalence of English language education have contributed to the country’s appeal for foreign investors.

To keep pace with growth, Vietnam has implemented comprehensive labor laws that cover various aspects of labor relations. These laws address matters such as employment contracts, internal labor rules, employee leave, working hours, overtime, minimum wage, trade unions, collective bargaining agreements, and social insurance, among others. Notably, a new labor code was passed in 2019, which came into effect on January 1st, 2021. This code introduces revisions and additions to existing labor laws, expanding the definition of “employee,” addressing probationary employment contracts, increasing overtime limits, adjusting retirement age, specifying terms for work permits, addressing unilateral termination, and making other significant amendments.

With this evolving legal framework and the extensive experience of our Vietnam labor lawyers, Le & Tran is well-equipped to navigate and provide expert guidance on matters related to Vietnam labor law. We are dedicated to assisting clients in understanding and complying with the intricacies of labor regulations to ensure a harmonious and legally compliant employment environment.

Vietnam’s labor law provides a relatively high level of protection for employees and their rights compared to other countries in the region. The termination of an employee by a company is a complex process under Vietnamese labor law, requiring strict adherence to procedures before approval is granted. This ensures that termination decisions are fair and reasonable.

The labor law in Vietnam treats foreign workers on an equal footing with Vietnamese workers in terms of labor contract rights. Foreign workers enjoy the same protections and benefits as their Vietnamese counterparts. However, there are certain distinctions related to fixed-term labor contracts. While Vietnamese workers have the advantage of their fixed-term contracts automatically converting to indefinite-term contracts, foreign workers do not have this protection due to the duration of their work permits. Nonetheless, their rights and entitlements are safeguarded under the labor law.

Furthermore, Vietnam’s labor law includes provisions to protect vulnerable groups of employees, including women, disabled individuals, the elderly, and veterans. These provisions aim to ensure equal opportunities and fair treatment for these individuals in the workplace, promoting inclusivity and non-discrimination.

In addition to its domestic labor laws, Vietnam’s membership in the World Trade Organization (WTO) and participation in various Free Trade Agreements (FTAs) have influenced its labor standards and practices. These international agreements have called for Vietnam to adopt and implement certain international labor standards, promoting fair and equitable labor practices in line with global norms.

One notable example is the Labor Law of 2019, which codifies provisions related to democratic features and mandatory dialogues between employers and employees. These provisions aim to enhance transparency, promote effective communication, and foster a collaborative working environment. By incorporating these elements into its labor law, Vietnam aims to strengthen global economic and political trust, enhance legal certainty, and create an attractive investment climate for foreign investors.

What are the practices of Vietnam labor lawyers?

Employment and labor 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 attorney in Vietnam provides valuable guidance to employees regarding their rights under labor laws. They analyze the facts of the dispute and explain the relevant laws, offering options such as negotiation, regulatory complaints, litigation, and more. These lawyers also represent employees in lawsuits involving discrimination, wrongful termination, benefit denials, wage disputes, and other labor-related claims. Additionally, they advise on the pros and cons of each course of action and recommend the best approach for each individual case.

Compliance with labor laws and regulations

Labor lawyers representing employers play a crucial role in ensuring compliance with Vietnam’s labor laws in a cost-effective manner. They assist employers in various areas, such as developing internal regulations, drafting employment contracts, addressing concerns related to fixed-term and indefinite employment contracts, managing unilateral and mutual termination, navigating social insurance requirements, handling business transfers (e.g., mergers or acquisitions), establishing confidentiality and non-competition provisions, addressing discrimination claims, ensuring workplace safety, and more. These lawyers also provide guidance on complying with the new labor laws concerning employee dialogue and organizations. Furthermore, they defend employers before governmental agencies and handle litigation on their behalf in court proceedings.

When do you need a Vietnam labor lawyer?

Employees

An employee should contact an employment lawyer 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.

Employers

Employers have a critical need for labor lawyers or employment attorneys even before their operations commence or they hire employees. Compliance with the labor laws of Vietnam and other relevant legal codes applicable to their industry is essential, and these legal professionals can provide valuable assistance. They can review and draft contracts and agreements, including employment contracts, amendments, and waivers. Additionally, employment lawyers offer guidance on various aspects related to labor laws, such as internal regulations, social insurance, taxation, workplace safety, and employee discipline or termination. Their expertise spans a wide range of areas to ensure businesses adhere to legal requirements and mitigate risks.

• A business may also require the services of an employment lawyer 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.

Moreover, an experienced Vietnam employment and labor lawyer, regularly consulted by businesses, can also identify potential issues beyond employment matters. These may include construction issues, fire protection, food safety, and environmental concerns. By having a comprehensive understanding of various legal areas, the lawyer can provide valuable insights and guidance to ensure compliance and mitigate potential risks in these non-employment related aspects as well. Their expertise extends beyond labor laws, making them a valuable resource for businesses seeking to navigate a range of legal challenges and maintain regulatory compliance.

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 a 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.

Under the labor laws of Vietnam, employers have specific grounds on which they can dismiss an employee for disciplinary reasons. These grounds include theft or embezzlement, deliberate violence causing injury, sexual harassment, falsifying information during recruitment, and unauthorized absence from work for a certain period of time. However, it is important for employers to follow strict procedures to ensure a lawful dismissal, such as providing a notice of hearing and following proper disciplinary hearing procedures. Adhering to these procedures is crucial to maintain compliance with labor laws and ensure a fair and legal dismissal process.

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. A labor rights 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.

With over a decade of practical expertise in Vietnam labor laws related to unilateral termination, our experienced labor lawyers at Le & Tran have earned the trust of both large multinational enterprises and promising start-up companies. We provide timely and critical advice on employment structures and relationships, and represent our clients in any disputes that may arise. Recognizing the sensitivity of employment termination, our attorneys employ their strong negotiating skills to explore all legal avenues and protect the operations, reputation, and long-term goals of our clients.

How are Vietnam labor lawyers and employment lawyers different?

While there is a technical difference between employment lawyers and labor lawyers, the terms are often used interchangeably, and there is significant overlap between the two areas of practice. Labor lawyers typically handle matters related to unions, collective bargaining, and organized labor, while employment lawyers focus on laws and regulations concerning the employee-employer relationship. Many attorneys specialize in both areas and draw from various provisions of labor law in their practice.

When choosing a labor or employment lawyer, it is important to focus on the professional’s background, experience, and knowledge of Vietnam labor law, rather than getting caught up in the terminology. Consider whether the attorney and law firm primarily advocate for the rights of employees or employers, their expertise in litigation or advising on compliance, their success rate in disputes, and any testimonials or awards they have received from former clients or the legal community. These factors will guide you in selecting the most suitable legal counsel for your needs and business.

How do you find a good Vietnam labor lawyer?

The Vietnam employment and labor attorneys at Le & Tran are experienced in handling a wide range of labor and employment matters for both domestic and foreign enterprises. They are well-versed in the latest legal developments and regularly conduct seminars to educate the business community about changes in labor laws and their implications.

The firm provides assistance in identifying potential legal issues and practical risks related to employer-employee relationships. They have extensive experience representing businesses and management before administrative agencies and courts. Compliance with Vietnam labor laws is also a key area of their expertise, ensuring that clients’ workplace practices and procedures are in compliance with applicable laws.

Le & Tran’s labor lawyers have encountered various cases involving the enforcement of labor judgments and have a successful track record in settling complex disputes, providing efficient resolutions for enterprises and employees while saving time and expenses.

Overall, the firm’s labor and employment law services cover a broad spectrum of issues, helping businesses manage legal risks, ensure compliance, and resolve disputes effectively.

Why engage labor law attorneys from Le & Tran?

The clients of Le & Tran benefit from the firm’s multi-disciplinary approach, as it encompasses various fields of corporate practice. In addition to employment and labor law, the firm’s attorneys collaborate with other practice groups such as tax, corporate and securities, appeals, and international and business litigation.

This integrated approach allows for comprehensive support and assistance in addressing the diverse challenges faced by businesses. By leveraging the expertise of different practice areas, Le & Tran is able to provide holistic solutions and overcome obstacles that may arise in the employment and labor context.

The collaboration between various practice groups within the firm ensures that clients receive well-rounded and effective legal counsel, tailored to their specific needs and circumstances. This comprehensive approach sets Le & Tran apart and enables them to provide comprehensive support across different areas of corporate practice.

Le & Tran’s lawyers in Vietnam 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. In addition to our labor legal services, our law firm can also assist in a variety of situations including construction contract disputes and shareholder disputes resolution.  Please feel free to contact us at info@letranlaw.com to arrange a free consultation.