Covid 19 _NCOV Labour Dispute_Contract Termination In Vietnam, force majeure events in Vietnam force majeure events in Vietnam, terminate contract, Vietnam labour dispute, labour dispute due to NCOV, labour dispute due to COVID 19, Vietnam: Soft measures before deciding to cut personnel, measures of cutting personnel in Vietnam, how to cut personnel in Vietnam

Vietnam: Soft measures before deciding to cut personnel

The Covid-19 impacts has caused many losses to companies. This made many companies opted for cutting personnel to lessen the finance burden. However, should this situation keeps on, it is expected that there will be 200 million unemployed people all over the globe because of Covid-19, according to the statistic from ILO. These are other soft measures that companies can consider before deciding to cut personnel.

Measure 1: Arrange employees to take leave

This measure can be considered a harmonization between the employer and employee. The employee takes a temporary leave but no contract terminated, which means they at least are assured of continuing the job after the leave. Furthermore, employer still pay employee as agreed, somewhat fulfilling the basic need of the employee.

Advantages:

At the end of the paid leave period as agreed, the employer is not required to pay the employee salary for the remaining of the leave period.

Besides, no need reasons to prove it, but only based on the agreement, employees can be arranged to take alternate leave to save costs.

Disadvantages:

However, the root to make this measure work is the goodwill come from both sides. Should the employees does not meet that goodwill, this will be troublesome to deal with.

Legal consequences:

Employees are allowed to return to work after the leave, assuring their position. However, if it is agreed to be a long leave period, the employees may not receive any salary after the end of paid leave period.

Measure 2: Work suspension

Ngừng việc là tình trạng NLĐ phải tạm ngưng hoặc không được làm công việc được giao theo thỏa thuận trong hợp đồng do nhiều nguyên nhân khách quan lẫn chủ quan. Sau khi hết thời gian ngừng việc, NLĐ có thể tiếp tục quay trở lại làm việc.

Work suspension means the employees has to halt the work according to the contract due to reasons both objective and subjective. After such period, they are allowed to return to work. This can be applied within the following conditions:

– Due to the fault of the employer

– Due to employee’s fault

– In case of that there is an electricity or water problem that is not due to the fault of the employer or employee or due to other objective reasons such as natural disasters, fires, dangerous epidemics, enemy sabotage, relocation of places as the request of a competent state agency or for economic reasons.

Advantages:

Should the applicable conditions occur, many employees may be terminated. Moreover, if natural disasters and epidemics occur without proving difficult problems, employees can still stop working.

Disadvantages:

Paying wages for work suspension to employees despite facing many difficulties due to force majeure issues such as natural disasters and epidemics.

Legal consequences

If it is the fault of the employer, the employee is paid in full;

In the other hand, if it is the fault of the employee, that person will not be paid; other employees in the same unit who must stop working shall be paid at the rate agreed upon by the two parties but must not be lower than the regional minimum wage prescribed by the Government.

Furthermore, if there is an electricity or water problem that is not due to the fault of the employer or due to natural disasters, fires, dangerous epidemics, enemy sabotage, relocation of operation locations at the request of competent state agencies. authority or for economic reasons, the two parties shall agree on the salary for termination of work as follows:

  • In case of stopping work for 14 working days or less, the agreed-upon suspension salary is not lower than the minimum wage;
  • In case of having to stop working for more than 14 working days, the salary for stopping work shall be agreed upon by both parties, but the salary for stopping work in the first 14 days must not be lower than the minimum wage.

Besides, get back the employee when the time off work is over.

Measure 3: Postponing the performance of the labor contract

Postponing the performance of the labor contract means the two parties can postpone the labor contract due to legal reasons or agreement. Employees are allowed to return to work after such period. The contract may only be suspended in one of the following cases:

– The employee must performs the military obligation or the obligation to join the Militia and Self-Defense Force;

– The employee is held in custody or temporary detention in accordance with the law on criminal procedures;

– The employee has to serve a decision on application of the measure of consignment to a reformatory, compulsory drug detoxification center or compulsory education institution;

– Pregnant female employees as prescribed in Article 138 of this Code;

– The employee is appointed as the enterprise manager of a one-member limited liability company in which 100% of charter capital is held by the State;

– The employee is authorized to exercise the rights and responsibilities of the state owner’s representative for the state capital in the enterprise;

– The employee is authorized to exercise the rights and responsibilities of the enterprise with respect to the capital portion of the enterprise invested in another enterprise;

– Other cases as agreed by both parties.

Advantages:

This measure is possible to suspend the labor contract for a long time. Also, it is possible to agree to suspend the labor contract without paying salary. In case of agreement, it is easy to suspend if there is goodwill from employees.

Disadvantages:

If an agreement cannot be reached, it must be in one of the first seven above cases before the employer is entitled to suspend the contract with the employee. In case of agreement, if the employee is not willing, it is difficult to suspend the labor contract.

Legal consequences

The employer gets the employee back when the contract suspension period expires.

Besides, during the period of suspension of the performance of the labor contract, the employee is not entitled to the salary and rights and benefits entered into in the labor contract, unless otherwise agreed upon by the two parties or provided for by law.

Measure 4: Cut salary and bonus

Salary reduction is only applied in 2 cases:

– Transfer employees to work other than the labor contract.

– Agreement to amend the labor contract.

Advantages:

– In case of transferring employees to other jobs:

+ Usually companies specify a lot of cases due to production and business needs in the rules, so when unexpected difficulties occur for the specified reasons, they are easy to use this way to reduce wages of employees.

+ With the consent of the employee, this employee can be transferred to that new job for a longer time.

– In case of modification of labor contract:

+ If the employees are goodwill, the agreement on amendment will be very fast.

Disadvantages:          

– In case of transferring employees to other jobs:

  • Only transfer employees within 60 days.
  • If after 60 days, if the employee does not agree and has to quit, he/she must pay the stoppage salary.

– In case of modification of labor contract: It takes a long time to negotiate with the employee if the employee is not willing to agree to reduce the salary.

Legal consequences:

– In case the employee is transferred to do a job other than the job on the labor contract:

  • Receive salary according to the new job but at least 85% of the salary according to the job in the contract.
  • In case of working more than 60 days but the employee disagrees and has to stop working, the employer must pay the suspension salary according to Clause 1, Article 99 of the Labor Code (full salary).

– In case of modification of the labor contract, the salary will change according to the agreement.

These are 4 measures that companies can consider applying before going to the decision of cutting personnel.

DOWNLOAD THE LEGAL HANDBOOK FOR COVID IN VIETNAM HERE.

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

    CONTACT

    Your infomation


    ***Other service of ASL LAW – full service Vietnam law firm ***
    Retainer service to enterprises International trademark registration
    Oversea investment consultancy for Vietnamese enterprisesPatent in Vietnam
    PCT Patent in Vietnam PCT Patent Vietnam Entry
    Intellectual property services (Vietnam IP Firm) Vietnam Patent Agent
    Trademark in Vietnam Vietnam Patent Firm
    Vietnam Trademark Agent Patent translation in Vietnam
    How to register trademark in Vietnam Vietnam Patent Translation Agent
    Copyright in Vietnam Vietnam IP Firm
    Vietnam Trademark Vietnam IP Agent
    Notes to company formation in VietnamM&A
    How to open company in VietnamBanking & financial services
    Open representative office in VietnamContract consultancy
    Establish company in VietnamEmployment and labor
    Corporate services in VietnamLitigation and dispute resolution
    Vietnam Law FirmFranchise in Vietnam
    Vietnam Antidumping Law Firm Vietnam Franchise registration
    Vietnam countervailing law firm Vietnam Business Law Firm
    Vietnam Real estate law firm Vietnam construction law firm
    Law firm in Hanoi Law Firm in Ho Chi Minh
    Contact Me on Zalo
    +84366667697
    WhatsApp chat