Monthly Newsletter of May 2021
Vietnam maintains the dual goal of containing the pandemic and promoting social-economic development
As of May 31, 2021, Vietnam’s Ministry of Health confirmed a total of 7,116 cases of COVID-19 in 31 cities and provinces. The most severely hit areas are Bac Giang Province with 2,155 cases and its neighbor Bac Ninh Province with 843 cases. Vietnam has also recorded 47 deaths due to the pandemic.
The new outbreak was detected in Ho Chi Minh City with 49 new infections. Ho Chi Minh City has decided to apply social distancing for 15 days from 0:00 on May 31, 2021. According to the directive No. 15+ which emphasized from 0:00 on May 31, 2021, the whole city of Ho Chi Minh City will fully implement the social distance and improve some measures such as not gathering more than 5 people in public places; strengthen a number of measures to prevent and control the epidemic, strictly apply the minimum distance of at least 2 meters when communicating.
After the disease broke out, Vietnam has conducted multiple measures and required the engagement of all stakeholders in the fight against the pandemic. The Deputy PM Vu Duc Dam stated that Vietnam prepared plan and sources for 30,000 Covid-19 infection scenario.
To implement the dual goal of containing Covid-19 and developing economy, Vietnam government committed to respond to the outbreak as quickly as possible, impose tough measures, and minimize impacts on people’s livelihood.
Vietnamese people are advised to strictly follow the “5K message” from Ministry of Health: “khẩu trang” (face mask), “khử khuẩn” (disinfection), “khoảng cách” (distance), “không tụ tập” (no gathering), and “khai báo y tế” (health declaration).
The factories in Vietnam can keep operating as usual if they can follow the requirements of the government. One example is at Apple supplier Foxconn Technology Group (Hon Hai Precision Industry), which makes major products like AirPods and panels for Apple devices, has reopened its factories in Bac Giang province (one of the most severely hit areas of the 4th wave in Vietnam) since May 28, 2021. Foxconn representative stated that it would also strengthen measures against the pandemic at the factories in Vietnam and give priority to workers’ health.
In the first four months of 2021, nearly 44,200 enterprises registered for establishment, the highest number in the 2017 – 2021 period with an increment of 17.5% in terms of the number of enterprises, up 41% in terms of registered capital, and up 7.8% in terms of number of employees compared to the same period in 2020.
Source: Ministry of Health, Nhan Dan (People) newspaper and Voice of Vietnam
NEW LEGAL REQUIREMENTS
1. Labor Code
Vietnam’s National Assembly approved a new Labor Code No. 45/2019/QH14 which has been effective since January 1, 2021. After that, the government released Decree No. 145/2020/ND-CP guiding the implementation of the labor code, which has been effective since February 1, 2021. There are the main points summarized as below:
– Why Vietnam’s National Assembly issues the new Labor law?
- Extended the employment relationships.
- Revised to adapt with the Trade Agreements (especially for human rights concerns), such as CPTPP.
- Increased the retirement age.
- Changes about the Union, worker’s representative, collective bargaining process.
- Allowed some agreements between employer and employee, instead of fixed regulations and cannot be negotiated.
- The government will not interfere too much to the wage and bonus policies of the employer; also will not interfere too much about disciplinary practices of the employer.
- Issued more requirements to develop and advance the skills of employees.
– Working hours: Mentions at the article 105 and 107, the New Labor Code states that normal working hours shall not exceed eight hours a day or 48 hours per week. If the employer and employee agree on an overtime deal, the total normal working hours plus overtime working hours shall not exceed 12 hours in 01 day, 40 hours in 01 month and 200 hours in 01 year. For industries such as textile, garment, footwear and electronics in which seasonal orders during certain times of the year require an extensive workload, employers are permitted to organize overtime work of up to 300 hours in a year.
– Leave with pay:
- The New Labor Code adds one day off to the National Holiday, on 1 or 3 September. Therefore, the total of public holidays is 11 days with full payment. The schedule of National Holidays and Lunar New Year Holidays will be decided on an annual basis by the Prime Minister (Article 112).
- The employer does not need to pay unused annual leave as old Labor Law, unless worker resigns.
– Labor contracts:
- New definition of “employee”: employee means a person who works for an employer
under an agreement, is paid, managed and supervised by the employer.
- New definition of “labor contract”: An employment/labor contract is an agreement between an employee and an employer on a paid job, salary, working conditions, and the rights and obligations of each party in the labor relations. An agreement with a different name is also considered an employment contract if it contains the agreement on the paid job, salary, management and supervision of a party.
- According to the New Labor Code at article 20, there are only two types of labor contracts: definite term labor contracts, with terms of 36 months or less; and indefinite term labor contracts. The definite contract can only be renewed once. Foreigners who have work permits (valid for two years) will also be able to renew only once. Seasonal contracts will no longer be permitted from 2021. However, it can be changed to short-term of the labor contract (less than 36 months).The New Labor Code recognizes the validity of labor e-contracts at article 14 that an employment contract in the form of electronic data conformable with electronic transaction laws shall have the same value as that of a physical contract. Updated at the article 24, employers and employees can now sign a separate probation agreement or include a probation clause in labor contracts. In addition, the probationary period applied to managerial positions of enterprises can now reach 180 days.
– Termination: The New Labor Code, article 34 provides more cases in the article of termination of labor contract, such as: the work permit for a foreign employee expires, the employee fails to perform his/her tasks during the probationary period under the employment contract or gives up the probation.
For unilaterally terminate labor contracts, the New Labor Code in the article 35, 36 provides
more bases for both employers and employees:
Either employers or employees can unilaterally terminate labor contracts upon employees reaching the retirement age; The employer fails to provide truthful information in a manner that affects the performance of the employment contract; The employee provides falsified information on recruitment or being absent from work for five consecutive working days without permission or legitimate reason, are now bases for employers to unilaterally terminate labor contracts; Employees, regardless of the term of contract, can unilaterally terminate a labor contract without providing reasons, provided that they serve the required advance notice.
The New Labor Code also revises provisions on responsibilities upon the termination of labor
contracts with the below notable changes:
- Increases the statute of limitations for employers to pay termination benefits to employees from 7 working days to 14 working days from the termination date.
- Employers are responsible for providing employees with copies of documents relating to their working period upon request. Incurred costs of copies and deliveries are paid by employers.
– Employee skills: Issued more requirements to develop and advance the occupational skills of employees.
– Retirement age: The new Labor Law increases the retirement age for men from 60 to 62 and from 55 to 60 for women. However, workers may retire later or sooner depending on the situation. For example, employees working in dangerous environments or involved in heavy lifting can retire sooner, while those who work in the private sector or in high skilled jobs can retire later. The maximum extension for this will be five years. However, the increment in retirement age will be done gradually for men and women by 2028 and 2035 respectively. The increment in retirement has been done to avoid a labor shortage from 2040 and to address social insurance deficits.
– Discrimination: The new code prohibits discrimination acts on skin color, race, nationality, ethnic group, gender, marital status, pregnancy, political views, disability, HIV status or if in a trade group.
– Sexual harassment: will be an additional violation for dismissal, but shall be specified in the internal labor regulations.
– Maternity benefits: The law provides more maternity benefits for the workers (both male and female), especially for the female workers who work heavy/hazardous jobs.
- Reduce working hours for pregnant worker: pregnant workers (work heavy/hazardous jobs) shall be entitled the above benefit during pregnancy if worker informs to the factory about their pregnant status. Previously, female workers (work heavy/hazardous jobs) were not reduced working hours until they reached the 7th month of the pregnancy.
- Nursing female employees could work overtime: To make it easier for female employees, those that have children under 12 months of age, will be allowed to take a 60-minute break every day from work to breastfeed.
- Menstruation break: Female employees will also be allowed a 30-minute break during their menstruation period. The number of days regarding the time off can be agreed by both parties, but must be a minimum of three working days per month. If female employees do not have time to take the aforementioned breaks and are allowed to keep working, the employee is required to pay additional wages for the work, which is separate from overtime pay.
- Child care allowance: both male and female workers will be paid the monthly child care allowance.
– Elderly worker: Employer can sign one-by-one indefinite contracts with elderly worker, can also arrange elderly worker to work heavy/hazardous jobs (if the elderly worker agrees to). The new Labor Law encourages the employer to recruit the elderly workers by making this change.
– Disabled worker: Employer can arrange disabled worker (from 51% of work ability loss) to work overtime, night time, heavy/hazardous jobs (if the disabled worker agrees to). The new Labor Law encourages the employer to recruit the disabled workers by making this change.
– Unions: Vietnam will now allow independent trade unions to operate as opposed to currently being supervised by the state-run Vietnam General Confederation of Labor (VGCL). The independent union will still be required to get permission from state authorities to operate. This is partly seen as Vietnam enters into free trade agreements which require the opening of trade union right
– Collective Bargaining: The contents of a collective bargaining agreement must be contrary to the law, and should provide for the terms and conditions that are more favorable to the employees than those provided by law.
2. New allowance rate for the fire brigade
The new allowance rate for fire brigade was regulated in Decree No. 136/2020/ND-CP:
– Leader and vice leaders of internal and specialized fire-fighting brigade are provided the monthly allowance, which shall be no lower than 20% of the region-based minimum wage.
– Members of internal and specialized fire-fighting brigade may be exempt from their duties and receive full wages and other allowances (if any), and are entitled to an amount equal to 30% of the region-based daily minimum wage on a daily basis.
– Persons mobilized to participate in and support fire-fighting operations directly per a mobilization order by the competent person are entitled to the following benefits:
- Less than 02 hours: 30% of the region-based daily minimum
- From 02 to less than 04 hours: 45% of the region-based daily minimum wage
- For 04 hours or more or for multiple days: 60% of the region-based daily minimum wage every 04 hours
- From 10:00 pm to 6:00 am: twice the above mentioned amount
– When the members of internal and specialized fire-fighting brigade participate in a training or refresher course in fire prevention and fighting operations and got involved in an accident, suffer from bodily harm or are deceased, they are entitled to social insurance benefits, death benefits and funeral payment; if they are eligible social insurance participants, these amounts shall be provided by local government budget or their managing bodies.
In addition, the decree also provided new guidelines other fire safety requirements.
3. National Insurance Database
The Decree No. 43/2021/ND-CP on National Insurance Database was issued on March 31, 2021 and effective on June 1, 2021.
According to this Decree, agencies, organizations and individuals are permitted to use their own information; or personal information of another person if the consent is given in accordance with the law.
Besides, above agencies, organizations and individuals are not allowed to request an individual to provide relevant documents if they have obtained the personal information from the National Insurance Database.
4. VSSID app Vietnam Social Insurance
By installing VISSID app of Vietnam Social Insurance, the participant could use services below:
– Searching information of the insured person
– Employee can use this app to replace the health insurance card
– Searching social insurance payment history
– Searching social insurance regimes
– Searching the history of medical examination using health insurance
– Reading Vietnam Social Insurance news
– Receiving announcement from Vietnam Social Insurance
– Getting 24/7 support
– Using public services
- Requesting for new or renew issuing social insurance cards
- Changing in information of participation in social insurance
1. OneStepVietnam becomes an approved verifier body of The Social and Labor Convergence Program (SLCP)
SCLP is a non-profit multi-stakeholder initiative that aims to eliminate audit fatigue in the apparel & footwear industry. SLCP provides the tools and system (CAF – Converged Assessment Framework) for a high-quality comparable data set on working conditions that can be used by all industry stakeholders. This increases transparency in supply chains, reduces the need for social audits and ultimately allows users to redeploy resources into improving working conditions.
OneStepVietnam has officially become an approved verifier body of SLCP (Social & Labor Convergence Program) coded VB270655. By becoming an approved verifier body of SLCP, OneStepVietnam has full functions to conduct SLCP verifications. For more details and book a verification, please contact us through our website.
2. OneStepVietnam completed an internal audit for a footwear company at HCMC
OneStepVietnam’s audit and consulting team conducted an internal audit and consultation for a footwear company belonging to one of the largest corporations in the world in 03 days from May 19 to 21, 2021.
Performing internal audit and consulting supports the factory evaluates whether its current HR and CSR systems has fully followed the new provisions of the Labor Code 2019 (effective from January 1, 2021 and client’s standards or not.
A footwear factory with more than 20,000 employees produces for one of the world’s largest sportswear brands has been trusted OneStepVietnam to review the management system from payroll, timekeeping system, policies and procedures, health and safety conditions, environmental protection regulations, etc.
OneStepVietnam continues to be a reliable partner of the factory to conduct the internal audit and consultation in the 3rd year since 2019.
OneStepVietnam team – May 2021