Vietnam Labor Law: issue of salary cuts, Vietnam Labor Law, issue of salary cuts in Vietnam

Vietnam Labor Law: issue of salary cuts

(COVID 19 Question) In fact, Vietnam law does not have specific provisions for the application of salary cuts to company employees. However, according to the provisions of the Vietnam labor law, the employer can only reduce the salary for the company in two cases: transferring the employee to a job other than the labor contract, And amending and supplementing labor contracts on salary issues.

For the case of the temporary transfer of employees to other jobs, Vietnam labor law has provisions on this issue, specifically according to Clause 1, Article 29 of the Labor Code regulates that: “When facing unexpected difficulties due to natural disasters, fires, dangerous epidemics, apply measures to prevent and overcome labor accidents, occupational diseases, electricity, and water problems or due to production and business needs, the employer is entitled to temporarily transfer the employee to another work compared with the labor contract but must not exceed 60 cumulative working days in 01 year; In case the employee is transferred to a work other than the labor contract for more than 60 cumulative working days in 01 year, it shall only be done when the employee agrees in writing”.

According to this regulation, when the employer encounters difficulties in doing business due to the epidemic, the employer has the right to temporarily transfer the employee to a new work other than the one in the Labor contract. However, the transfer of an employee to a new work under this contract must not exceed 60 cumulative days in a year, unless otherwise agreed by the employee. Besides, one of the other restrictions is that according to Clause 3 of this article, although this employee can receive a salary according to the new work, if the salary of the new work is lower than the salary of the old work, it will remain the same as the old salary within 30 days. The salary according to the new job must be at least 85% of the salary of the old job but not lower than the minimum salary.

Moreover, the condition for applying this measure is that when temporarily transferring the employee to a job other than the labor contract, the employer must:

  • Notify employees at least 03 working days in advance,
  • Clearly state the duration of the temporary employment and
  • Arrange jobs suitable to workers’ health and gender.

When meeting the above conditions and limitations, the employer has the right to temporarily transfer its employees to a new work other than the one in the contract.

This provision of the law is extremely reasonable, many businesses want to circumvent the law and want employees to do jobs other than the signed labor contracts with lower wages. Since this regulation has been issued, the employer must not allow the employee to work for more than 60 days without the consent of the employee and pay at least 85% of the wage of the old job.

For the second case, salary is one of the basic terms of the labor contract. Thus, because of the difficulties caused by the epidemic situation, employers and employees can agree on the salary of a new job. In this case, the employer and employee can choose to amend the salary contract and have an agreement that the employer will pay the salary according to the previous work and labor contract for a certain period of time, or may employees agree to amend the contract to do the new job. Thus, in this case, the employer who wants to reduce the salary through the amendment and supplement of the labor contract must have the consent of that employee.

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

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