Vietnam: building-regulations-to-secure-workers-rights-and-interests-1

Vietnam: Building regulations to secure workers’ rights and interests

(Published on Vietnam Investment Review). With the rapid development of digital platforms in the era of Industry 4.0, many companies have been established such as Grab, Now, and GHN Express, which create convenience for customers and jobs for millions of people in Vietnam. And there have already been plenty of people making money working on these digital platforms.

However, at present, these people are facing challenges such as their working conditions, insurance benefits, stable wages, and social security which traditional workers enjoy. That stems from the lack of clear regulations in the law on this issue and leading to disputes between workers and these digital platform companies.

Indeed, people working on digital platforms are not enjoying the same benefits as employees as defined in the Labour Code. This is because the contract between them and digital platforms is considered a business cooperation contract, in which these persons are “independent partners” of companies on the digital platform and these companies are considered the intermediary.

Because of this, this relationship may not be considered a labour relationship under the law. As a result, many of the benefits of digital-based workers are not guaranteed, such as a fixed salary, payment of compulsory social insurance, or unemployment treatment. Even when drivers have an accident on the road while carrying passengers, they are not entitled to occupational accident benefits and it is unclear who will even stand up for them when there is a dispute between both sides. Moreover, they also do not receive the regional minimum wage and the remuneration they earn only comes from their driving times.

In addition, if derived from a business cooperation contract, according to Article 3 of the Law on Investment and Article 504 of the Civil Code 2015, the persons working on the digital platforms can discuss and negotiate the profit with these companies, and the equality of rights and obligations between two sides are the core basis of this contract. However, they are still the weaker party in this contract when it is difficult for them to raise their voice.

Taking Grab as an example, the company is determined to decide the fares, fines, and rewards to the drivers. It raises the question of whether these drivers are Grab’s independent partners or are workers governed and managed by Grab.

Moreover, the driver-Grab relationship has the characteristics of a labour relationship. Firstly, many people working on this platform are attempting to make a living from it, not just join the platform when they have spare time. Secondly, drivers are still subject to strict management of Grab including mandatory uniforms to be worn when carrying passengers, and the scoring of drivers’ behaviour.

With the progress of the Labour Code in 2019, the parties bind a contract with a different name, but the content shows the nature of the contract and it is considered one that is still subject to the Labour Code. Therefore, if there are clear features of the relationship, even though the name of the contract is different, it is still considered a labour contract.

However, considering two important criteria set forth in the Labour Code, there are requirements to distinguish the labour relationship from the business cooperation relationship.

The first criterion is that the labour contract is an agreement between the employee and the employer on paid remuneration, wages, working conditions, and the rights and obligations of each party in the relationship. So the employer must pay the salary, meet working conditions, and exercise the rights and obligations in the contract.

However, in the cooperation contract, working conditions are met by drivers who have to prepare their own vehicle. In addition, this contract does not pay social insurance, health insurance, and unemployment insurance for the driver as in a normal labour relationship.

The second criterion is that the employer must pay the salary directly to the employee. However, here, digital workers receive money from customers, not directly from companies and they are just intermediaries in this case.

These criteria make the relations between service providers and digital platform companies difficult to determine under the regulation of the Labour Code.

With the loopholes of the law, this relationship cannot be regulated by the code; in fact, it can disadvantage people working on digital platforms and lead to them not enjoying the same benefits as traditional workers. Hopefully the code can expand regulations to protect the rights and interests of workers.

Lawyer Pham Duy Khuong is on the list of Vietnam’s 100 top lawyers voted and announced by Asia Business Law Journal. Khuong also led ASL Law to be ranked second in the list of top local law firms in Vietnam as voted by The Legal 500.

With over 10 years of experience in the field of prosecution and strategy, Khuong was also ranked by World Trademark Review 1000 (WTR) as the leading lawyer in Vietnam on trademark litigation and strategy.

WTR 1000 is a website and magazine about international trademark law. This is a monthly magazine with news, featured articles, and legal news updates from a group of trademark experts around the world.

In the Vietnamese market, WTR also honours law firms and trademark lawyers who have many achievements in effectively supporting clients’ projects.

Along with providing domestic legal services, ASL Law also supports customers in Singapore, China, the United States, Australia, the European Union, and many other markets.

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


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