In most manufacturing companies in Vietnam today with thousands or even tens of thousands of employees, they often make the most of employees’ leave days for corporate activities or unexpected incidents like the Covid-19 pandemic, mass power cuts, etc. So, what exactly is this behavior and does it violate the law?
For example, a new employee working at the company is entitled to 12 days of annual leave as prescribed at point a, clause 1, Article 113 of the Labor Code 2019.
In practice, ordinary workers will have to default to the understanding that they only have about 50-70% of vacation days per year, minus vacation days that the company can ‘requisite’ during the year, for many purposes.
Companies can use employees’ leave days for cases such as company-wide leave for team building, holiday except on workdays or most recently, the direct deduction of employees’ leave days when production companies meet mass power failure.
When the power goes out, the production company cannot operate normally and through that, they have to send workers home. But, if they still pay the full salary to the workers, the damage will increase even more. To minimize losses, they deduct from the employee’s leave. For employees who have used up their annual leave, some businesses may even force employees to take unpaid leave.
However, on the contrary, for some cases where enterprises force employees to work at night, when the power system is stable, they may not charge overtime or overtime pay for employees but only pay according to the correct salary as working during the day.
If the power outage continues, it is more likely that employees will be affected by their benefits except for the basic salary cut when orders are reduced, overtime are cut short (In many businesses, the overtime payment are also applied under the law’s standard to maximize benefits).
Is it legal for a Vietnamese manufacturing company to arbitrarily use the employee’s leave?
Clause 4, Article 113 of the Labor Code 2019 stipulates that the employer is responsible for determining the annual leave schedule after consulting the employee and must notify the employee in advance.
Accordingly, it is legal for enterprises to negotiate with employees on taking their leave for general activities of the company as planned after consultation, and is not prohibited by law.
However, this will depend entirely on the agreement between the two parties. For example, in the case of a decrease in orders before Tet, after Tet, the employer can agree and record the annual leave schedule with the employee about taking more than 5 days off for Tet than prescribed in the law.
Accordingly, it is completely against the law to arbitrarily reduce the employee’s leave for incidents without notice and obtaining the employee’s consent, especially when this violation has a direct impact to the rights of employees such as salary cuts, loss of vacation days.
In case the company violates the regulations on leave and arbitrarily uses the employee’s leave without a legal basis, the company may be considered conducting a violation of the labor law and be responsible before law.