Balance to find with overtime reform in Vietnam

Balance to find with overtime reform in Vietnam

(Vietnam) Over the past year at least, enterprises have faced serious issues in business development and production, especially those in the seafood, footwear, or textile industries.
Realising these problems, the Vietnamese government has proposed to increase overtime hours for employees, which could contribute to stabilising production and business, as well as creating momentum for development.

The government has submitted that the number of overtime hours worked in a month by employees is no more than 72 hours (an increase of 80 per cent compared to the current regulation, which is no more than 40 hours); and the number of overtime hours in one year of employees is not more than 300 hours and is applicable to all business lines. According to current regulations, only in some industries such as textiles, leather, shoes, and seafood processing can employees work 200-300 overtime hours per year.

Impacts of the increase in overtime on the rights of employees

Firstly, the employee is considered to be in a weak position in the relationship with the employer. The regulation that overtime work does not exceed 40 hours in a month and 200 hours in a year (300 hours for some industries) is to avoid the case that the employer abuses and forces the employee to work too much overtime, which employees must agree to ensure their work.

From that, they may not have more time to rest. Therefore, increasing the overtime limit up to 72 hours a month will affect the employee’s rights for rest and recovery time.

Besides that, if the bill on increasing overtime hours is approved, the government should have regulations to strictly ensure the principle of agreement between employees and employers. This is because employees are always in a weak position in negotiating with employers, as well as ensuring a better working environment for employees to facilitate working overtime such as increasing wages or supporting nutritional shifts and accompanying policies.

Another impact on the rights of employees is overtime working for hazardous industries. The regulation on increasing the limit of overtime for such environments can seriously affect employees’ health and increase the possibility of occupational accidents. Therefore, it is still necessary to have regulations for these industries to ensure the rights of workers.

Last but not least, increasing the overtime limit could cause many other workers to lose their jobs. Indeed, by allowing skilled workers to work more hours, businesses can cut down many employees at many stages, thereby reducing labour costs, operating costs, and departmental expansion costs. Therefore, the government should have appropriate policies to ensure jobs for workers and avoid the case where too many workers lose their jobs.

Despite these impacts on workers’ rights, increasing the overtime limit is nevertheless a necessary and urgent solution for domestic employers but also for foreign-invested enterprises and employees.

The disruption of production and supply chains in the past two years has hamstrung many businesses. The increase in the limit on overtime hours helps businesses reduce human resources but still ensure production. Hence, if there are employees working overtime, businesses (especially foreign-invested groups in seafood, footwear, and electronics) can still ensure urgent orders without having to increase personnel.

This helps businesses become more proactive in arranging and making overtime plans depending on the current situation of the business in terms of raw materials and the labour force.

Secondly, this is also a proposal from the government based on the actual needs of employees, because the pandemic constraints mean most employees now want to work overtime to improve their incomes.

In general, this is a necessary and urgent policy to help businesses and employees prosper as well as recover production and supply chains. However, the government still needs to regulate strictly and appropriately to avoid the abuse of working overtime that affects the rights of workers.

ASL LAW is the top-tier Vietnam law firm for Anti-dumping & countervailing. If you need any advice, please contact us for further information or collaboration.

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