Vietnam: New Labor Code Ratified

After several iterations, Vietnam's National Assembly ratified a new Labor Code in late June 2012. The bill reduces some employee benefits and increases other protections.

Meaningful highlights which may impact HSP clients include changes to labor contracts, restrictive covenants, overtime work, labor outsourcing, work permits, and paid leave benefits (including maternity).  The Code will go into effect in May 2013.

In general, employment laws in Vietnam are both strict and employee-oriented. The employer/employee relationship is tightly regulated, with the Labor Code setting out specific provisions covering matters from the form of employment contracts and terms of employment, to probationary periods, working hours, overtime, leave entitlements, maternity benefits, and social and health insurance contributions. It also dictates internal labor regulations, collective agreements, and safety and hygiene.

For more specific detail on the revised Code, please see this overview from the American Bar Association.