According to the provisions of the Labor Code 2019 No. 45/2019/QH14 (“Labor Code 2019”), Vietnamese employees with remaining annual leave days will no longer be paid by the enterprise for the excess leave days. Accordingly, a part of Vietnamese employees wonders if they can transfer their annual leave to the following year.
Currently, the law does not have a mandatory provision for allowing Vietnamese employees to reserve their annual leave for the following year.
Clause 4, Article 113 of the Labor Code 2019 only stipulates that the employee can agree with the employer on the combined leave of many annual leave days. Specifically:
“4. The employer is responsible for stipulating the annual leave schedule after consulting the employee and must notify the employee in advance. The employee can agree with the employer to take annual leave in installments or take a combined leave of up to three years at a time.[…]”
Accordingly, if there are remaining annual leave days, employees can negotiate with the employer to reserve and take a combined leave in a big vacation. However, the above regulation has clearly stated that this is just an agreement, the employer has the right to refuse based on the specific situation.
The term lump-sum leave for a maximum of three years can also be construed as just an example of an agreement between two parties. If the employer allows, the employee may have other agreements such as reserving annual leave to the following year.
For example, in 2022, if an employee has 7 days of leave left over, they can negotiate with the employer to transfer those 7 days of leave to 2023, totaling 12 + 7 = 19 days of leave (For normal cases) or they might transfer part of the remaining leave days (e.g. 3/7 days to 2023).
Currently, a few Vietnamese enterprises apply the reserve of annual leave until the end of the first quarter of the following year, i.e. the end of March. Accordingly, employees will have 15 months to use the leave instead of 12 months. Until April of the following year, if the employee takes leave, they will be calculated the leave according to that year.
Flexible annual leave days are welcoming
The flexibility for employees in terms of the number of leave days is welcome for Vietnamese businesses. Agreements on leave benefits in favor of employees are accepted even though there are no provisions in the law or the law has provisions but the bias is unfavorable to the employees.
Example of the salary payment system for the employee’s unused and remaining leave days.
Currently, the law stipulates that only those employees who quit or lose their jobs within a year will be paid for the unused annual leave. If there are days of leaves remaining at the end of a year, it will not be paid.
However, if the enterprise considers that the employees have devoted themselves and have a good relationship with the enterprise, they might make a decision to pay the remaining annual leave days at the end of the year even though the employees do not quit their job. This is completely welcomed by Government agencies and organizations that protect the interests of employees and are completely legal.
About the flexibility of annual leave will depend on the specific situation of the business but will also be completely welcomed because this flexibility is beneficial for employees, contributing to ensuring the rights and increasing the interests of employees.