Revised Labor Code expected to better protect laborers' rights

The Ministry of Labor, Invalids and Social Affairs (MOLISA) is still working on draft amendments to the 2012 Labor Code, focusing on such issues as the Code’s governing scope, wage and overtime working hours, special labor, establishment of industrial relations, and unscheduled inspection.

Manufacturing electronic components at 4P Company Limited in Vinh Khuc commune, Van Giang district, Hung Yen province__Photo: Pham Kien/VNA

As scheduled, the draft will be tabled to the National Assembly for passage at its seventh session in May next year.

Expanding the Code’s scope of regulation to the informal sector

Compared to the 2012 Labor Code, the revised code would have a broader scope of regulation.

According to the MOLISA, the current Code fails to govern industrial relations in the informal sector. As a result, there are only 13.8 million laborers participating in compulsory social insurance, a modest number in a labor market with 54 million of employed people, of whom approximately 23.2 million are wage and salaried workers.

To address this issue, the governing scope of the revised Code would be expanded to cover new industrial relations which have appeared in the labor market but not yet governed by the current law, e.g., those between freelance drivers and digital technology businesses like Uber or Grab. In addition, the draft would also apply to wage earners in unofficial sectors, domestic workers, agricultural laborers, seasonal workers, sales agents, insurance agents, freelance software engineers, etc. According to experts, such a move would also help guarantee rights and interests of parties to industrial relations and adapt to changes of the labor market in the new context.

Particularly, in order to provide more opportunities for laborers to look for better jobs as well as eradicate forced labor, the MOLISA suggests permitting employees to unilaterally terminate their labor contracts at any time and without reason. They would only be required to inform their employers of the intention to quit jobs at least 45 days, 30 days and 5 days in advance, for those working under indefinite-term, definite-term and seasonal labor contracts, respectively.

Increasing overtime pay  

Worthy of note, the concept of wage would be revised in conformity with the International Labor Organization’s Protection of Wages Convention to be “all sums of money which an employee receives for performance of the agreed job(s).”

Criteria for determination of the minimum wage would be amended in a way that ensures the minimum living standard for laborers and their families, which, however, should be placed in relation to elements of the labor market and socio-economic development situation. Regulations on wage deduction, wage payment, and severance pay would also be further specified so as to protect laborers’ income and wage.    

The draft empowers businesses, including also wholly state-owned ones, to decide on their own wage policy after reaching agreement with employee-representing organizations. However, wage paid by employers to their employees must not be lower than the minimum wage announced by the Prime Minister.

As for overtime working, the draft suggests increasing the maximum allowable overtime working hours to 400 hours per year from current 300 hours. It also proposes raising overtime pay corresponding to the time and duration of overwork.

Specifically, an employee working overtime on weekdays would be entitled to an overtime pay equal to at least 150 percent of his/her wage for the first hour, and 200 percent for the subsequent hours. These rates would be raised to 200 percent for the first two hours and 300 percent for the remaining overtime period if the employee works overtime at weekends. In case the employee has to work overtime on public holidays or paid days off, the overtime pay must be at least 300 percent of his/her wage for the first two hours, and 400 percent from the third hour on. 

Clarifying provisions on female, minor and foreign employees

The draft revises regulations concerning female laborers toward establishing principles to ensure that female employees may perform their jobs equally with their male colleagues. Particularly, the retirement age would be gradually increased so as until it reaches full 62 years, for males, or full 60 years, for females, thus reducing the gender gap in retirement.

As for minor workers, the list of jobs for minor employees and conditions for employing minor employees would be revised so as to prevent and eradicate the worst form of child labor.

For foreign employees, conditions for employment would be amended with a view to guaranteeing foreigners’ employment rights while protecting employment opportunities of local laborers.

Guaranteeing workers’ right to engage in dialogues at workplace

The draft adds provisions on industrial relations which are designed to ensure that all groups of employees have the right and opportunity to express their opinions on issues arising at workplace. Workers’ right to collective bargain through their representative organizations would also be further specified so as to ensure that collective bargain would play the central role in establishment of industrial relations. Meanwhile, provisions on settlement of labor disputes would be revised to be feasible and suitable to reality.

Restoring the unscheduled inspection regime 

Under the 1994 Labor Code, labor inspectors have the right to inspect places and objects under their inspection mandate at any time without having to make advance notice. However, as the 2010 Inspection Law requires competent agencies to notify the time and contents of inspection to to-be-inspected enities in advance, this provision is excluded from the 2012 Labor Code. As a result, labor inspectors can hardly detect violations and protect laborers’ fundamental rights at work. The draft code now restores the 1994’s Code provision, saying that labor inspectors may conduct inspection and investigation of places and objects under their inspection competence at any time and without advance notice.