The amendment of the Labor Code 2012 passed through the legislature with 90.06% approval from the National Assembly Deputies on 20 November 2019. These amendments shall take effect from 1 January 2021.
The most important change in the revised Labor Code is the freedom of association whereby employees may form or join a representative organization of their choosing that is independent of the State-run Vietnam General Confederation of Labor. This amendment is a part of Vietnam’s efforts to conform to labor standards laid out in various new-generation free trade agreements that it has signed. These include; the EU-Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). However, until the issuance of further implementing guidance by relevant agencies, the practical exercise of this right is still pending.
Some other basic and significant changes are also made in this amended Labor Code, particularly regarding working hours, public holidays and the age of retirement. These changes are as follows:
- Regarding working hours, normal and overtime working hour limits remain unchanged. However, the amended Labor Code imposes a new obligation on employers to notify their employees in advance, when deciding whether employees are to work on a daily or weekly basis.
- The amended Labor Code also entitles workers, from 2021 onward, to an additional national holiday, with full salary payment, on the day preceding or following Independence Day (2 September) holiday, bringing the total to 11 public holidays per year.
- The roadmap to increasing the retirement age is also demonstrated in this amendment. Under this, the retirement age for men and women will be adjusted annually to reach 62 and 60 years of age respectively, under normal working conditions, by 2028 and 2035 respectively (currently, the compulsory retirement age is 60 years old for men and 55 years old for women). The retirement age will be raised each year by three months for men and four months for women. Beginning in 2021, the retirement age will be 60 years and 3 months for men, and 55 years and 4 months for women.
Head of the Regional Employment & Labor Practice
Regional Legal Adviser
The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.