1.1 Key statutes
The key statute governing employment law in Vietnam is the Labour Code. Another significant statute is the Law on Social Insurance.
A multitude of separate Decrees, Circulars and other implementing legislation provide guidance on the implementation of the Labour Code and the Law on Social Insurance.
1.2 Probationary period
The probationary period allowed under the Labour Code is a maximum of 30 days, or 60 days for positions which require specialised or highly technical skills. Either party may terminate the employment during the probationary period with immediate effect.
1.3 Minimum wage
There is a prescribed minimum wage, which is adjusted periodically. The prescribed minimum may differ depending on the location of the work, and whether the employer is a Vietnamese enterprise or a foreign invested enterprise.
1.4 Remuneration structure
The wages of employees must be agreed upon in the labour contract, and may be calculated by reference to time (hours, days, weeks, months), on the basis of the number of products produced or upon completed pieces of work. Wages of employees may not be lower than the applicable minimum wage.
1.5 Working hours
Hours of work
The normal working hours of each employee working in normal working conditions are a maximum of 8 hours per day or 48 hours per week. The working hours of an employee are reduced by one to two hours for employees who perform extremely heavy, dangerous or toxic work. The employer has the right to set working hours on a daily or a weekly basis, provided that employees are notified in advance and such right is clearly set out in the employee’s labour contract, labour agreement and in the internal rules of the enterprise.
Rest periods
An employee who works for 8 consecutive hours in normal working conditions or for 6 or 7 consecutive hours in the case that the employee’s working hours have been reduced, is entitled to a break of at least 30 minutes as part of that working period. Those who work the night shift are entitled to a break of at least 45 minutes. If an employee works for 10 hours or more in a day, the employer must provide an additional break of at least 30 minutes during working hours, in addition to the regular break in the normal working shift.
For each seven working days, an employee is entitled to a break of at least one day (24 consecutive hours), which is normally taken on a Sunday. However where, due to the nature of the work, it is impossible for the employees to have one day off per week, the employer must make alternative arrangements to ensure that the employees on average have at least four days off in a month. Employees who work in shifts are also entitled to have at least 12 hours rest between each shift.
Overtime
Overtime may not exceed 4 hours per day, or 200 hours per year. In special cases, where urgent demands of production need to be met or due to other unforeseeable factors experienced by enterprises engaged in the production or processing of exports including textiles, garments, leather, shoes and marine products, the total overtime per year can be more but must not exceed 300 hours a year and is subject to the approval of the relevant State authorities.
Overtime pay on normal working days is 150% of the employee’s regular wage. Overtime pay on weekends or weekly rest days is 200% of the employee’s regular wage. Overtime pay on public holidays or statutory leave days is 300% of the employee’s regular wage.
1.6 Public holidays
Employees in Vietnam are entitled to 9 paid public holidays per annum on the dates prescribed by the government. Where a public holiday coincides with a weekly day off, the employees are entitled to take the following day off.
1.7 Paid annual leave
An employee who has been employed for 12 months is entitled to annual leave of 12 working days. Where an employee has worked for less than 12 months, their annual leave entitlement is calculated in proportion to the number of months that the employee has worked during the year.
Employees working under strenuous, hazardous or dangerous conditions are entitled to annual leave of 14 or 16 working days, depending on the severity of the conditions under which they are working.
The number of annual leave days to which an employee is entitled increases in accordance with the length of service, by one additional day for every five years of employment.
When taking annual leave, the employee may be paid in advance an amount equal to their wages in respect of the days to be taken as annual leave. If an employee does not take their full annual leave entitlement for a given year, they are entitled to be paid in lieu.
The employer is entitled to determine the timetable for the annual leave, provided that the executive committee of the trade union operating in the enterprise is consulted and the employees are notified in advance. The employees and the employer may agree on the annual leave being taken in instalments.
1.8 Other types of leave
Maternity leave
Under the Labour Code and the Law on Social Insurance, a female employee working in normal conditions is entitled to 4 months’ maternity leave. Wages during the maternity leave period are paid by the Social Insurance Fund provided that such employee (and her employer) has paid the relevant social insurance premium for at least 6 months or more within a period of 12 months prior to childbirth.
Sick leave
An employee may take sick leave if they are unable to attend work due to sickness, or due to having to care for their sick child under the age of 7.
The maximum consecutive sick leave period is 12 months for an indefinite-term contract, 6 months for a definite-term contract with a term of 12 to 36 months, and half the duration of the contract for a definite-term contract that is for less than 12 months. The exceeding of these limits may lead to a unilateral termination by an employer of the employee’s labour contract.
An employer is not obliged to pay the employee during the sick leave period. The employee may however be entitled to an allowance paid by the Social Insurance Fund for the leave period, provided that the employee can provide a medical certificate from an assigned hospital in respect of such period of sick leave. The time period of sickness allowance depends on the working conditions of the employee and the rate and period of social security contribution. The amount of sickness allowance is generally 75% of the salary used to calculate the social insurance contributions immediately prior to the leave of the absence period.
Personal leave
An employee is entitled to paid leave for their own wedding (3 days), their child’s wedding (1 day), or in the event of the death of a parent, spouse or child of the employee (3 days).
Unpaid leave
An employee is entitled, with permission of the employer, to unpaid leave of absence.