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Viet Nam

Source and scope of regulations - 2012    

  • Labour Code of the Social Republic of Viet Nam [LC], 23 June 1994 as amended by Law 35-2002-QH10 of 2 April 2002
    Date: 02 Apr 2002; view website » (view in NATLEX »)
  • Decree No. 44-2003-ND-CP making detailed provisions and providing guidelines for implementation of a number of articles of the Labour Code with respect to labour contracts
    Date: 09 May 2003; view website »
  • Decree No. 47/2010/ND-CP of May 06, 2010, on administrative sanctioning of violations of the Labor Law
    Date: 06 May 2010; view website »
  • Decree No. 133/2007/ND-CP of August 8, 2007, providing detailed regulations and guidelines on the laws amending the Labour Code regarding Labour dispute resolution
    Date: 08 Aug 2007; view website »
Size of enterprises excluded (≤): none
  • Art. 2 LC

Workers' categories excluded: civil/public servants; police; army; judiciary; managerial / executive positions; other
  • Art. 2 LC: The LC Code applies to all workers, and organizations or individuals employing workers under a labour contract in all economic sectors and all forms of ownership.
    It also applies to trainees and apprentices, domestic workers.

    Civil servants and public employees, elected, appointed or assigned officials, members of units of the people's armed forces and the police, members of people's organizations and other political and social organizations, and members of cooperatives are not covered by the LC (art. 4 LC, and art 2, 2003 Decree).
    Members of boards of management of enterprises are not covered by labour contracts (art. 2(d), 2003 Decree).

Reforms under process
A new Labour Code was adopted on June 18th, 2012. However, it entered into force on May 1st, 2013.

Notes / Remarks
Changes brought by the new Labour Code (in force since May, 1st 2013, will be reflected in the EPLex profile for 2013.

Types of employment contracts - 2012    

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Maximum probationary (trial) period: 2 month(s)

  • Art. 7, Decree 2003: The employer and the employee may agree on a probationary period not exceeding 60 days in respect of highly specialized technical work, 30 days in respect of work that requires a secondary skill level, and 6 days in respect of other work.

Fixed term contract (FTC):
  • FTC regulated: Yes
  • Valid reasons for FTC use: objective and material reasons
    • Art. 27 (3) LC forbids the use of employment contracts for a seasonal job or a specific job with a duration of less than 1 year to undertake a job of a permanent nature, except for the temporary replacement of a worker performing military obligation, on parental leave or for other reasons.
  • Maximum number of successive FTCs: 2
    • See art. 27 LC and Art. 4 (4) Decree 2003: Upon expiry of a FTC, a new FTC may be concluded for a period not exceeding 36 months; and if after that period the worker continues to work, an indefinite term contract of employment must be signed.
  • Maximum cumulative duration of successive FTCs: 6 year(s)
    • Art. 27 LC and 4 (4) Decree 2003.

Substantive requirements for dismissals (justified and prohibited grounds) - 2012    

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Obligation to provide reasons to the employee: Yes
  • Art. 43 LC: The employer shall state in writing the reasons for the termination of the labour contract in the worker's labour book and shall be responsible for returning the labour book to the employee.

Valid grounds (justified dismissal): worker's conduct; worker's capacity; economic reasons
  • Art. 38 LC and art. 12, Decree 2003
    Article 38 LC
    "1. An employer shall have the right to terminate unilaterally a labour contract in the following circumstances:
    (a) The employee repeatedly fails to perform the work in accordance with the terms of the contract;
    (b) An employee is disciplined in the form of dismissal in accordance with the provisions of article 85 of this Code;
    (c) Where an employee suffers illness and remains unable to work after having received treatment for a period of twelve (12) consecutive months in the case of an indefinite term labour contract, or six consecutive months in the case of a definite term contract with a duration of twelve (12) months to thirty six (36) months, or more than half the duration of the contract in the case of a contract for a specific or seasonal job. Upon the recovery of the employee, the employer shall consider the continuation of the labour contract;
    (d) The employer is forced to reduce production and employment after trying all measures to recover from a natural disaster, a fire, or another event of force majeure as stipulated by the Government;
    (dd) The enterprise, body, or organization ceases operation."

    Art. 12 Decree 2003: "The provision that employers are entitled to unilaterally terminate their labor contracts in cases prescribed at Points a and d, Clause 1, Article 38 of the amended and supplemented Labor Code is stipulated as follows:
    1. Laborers constantly fail to fulfill their tasks under labor contracts, meaning that they fail to fulfill the labor norms or assigned tasks due to subjective reasons, and are booked or warned in writing at least twice in a month, but later still fail to redress their shortcomings.
    The extent of failure to fulfill the work shall be inscribed in labor contracts, collective labor agreements or labor regulations of the units.
    2. Force majeure reasons mean the cases where due to the requests of competent State bodies of the provincial or higher level, to enemy sabotage or epidemics which cannot be overcome, the production and/or business are subject to change or shrink."

Prohibited grounds: marital status; pregnancy; maternity leave; family responsibilities; temporary work injury or illness; race; sex; religion; social origin; trade union membership and activities; lawfully taking leave
  • Prohibited grounds for dismissal: art. 39 and 111 LC.

    See also:
    - the general prohibition of discrimination in employment based on sex, race, social class, belief or religion (art. 5 LC).
    - the prohibition of discriminatory treatment towards a worker who joins a trade union. (art. 1, 2) of the Trade Union law, 1990)

Workers enjoying special protection: workers' representatives; pregnant women and/or women on maternity leave; workers with family responsibilities; workers on temporary leave following an occupational disease or a work injury
  • Art. 39, Art. 111: Prohibition to dismiss:
    - a worker under treatment as a result of sickness, labour accident or occupational disease except in case of force majeure;
    - pregnant women, women on maternity leave, and women taking care of a child under 12 months of age, except for business reasons.
    Art. 155(4) LC: In order to dismiss a member of the executive committee of the local trade union, the employer must obtain the consent from this committee.

Procedural requirements for individual dismissals - 2012    

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Notification to the worker to be dismissed: no specific form required

  • Art. 38 (3) LC stipulates that the employer shall notify the worker of the dismissal but does not specify whether such notification shall be written.

Notice period:
  • Art: 38 (3) LC: The employer must give at least 45 days' notice for an indefinite duration contract, 30 days' notice for a fixed-term contract, and three days' notice for a seasonal or specific-task contract. These requirements apply to all forms of unilateral termination, except when the employer is using dismissal as a disciplinary measure.
    • tenure ≥ 6 months
      • permanent workers - 45 day(s).
    • tenure ≥ 9 months
      • permanent workers - 45 day(s).
    • tenure ≥ 2 years
      • permanent workers - 45 day(s).
    • tenure ≥ 4 years
      • permanent workers - 45 day(s).
    • tenure ≥ 5 years
      • permanent workers - 45 day(s).
    • tenure ≥ 10 years
      • permanent workers - 45 day(s).
    • tenure ≥ 20 years
      • permanent workers - 45 day(s).

    Pay in lieu of notice: Yes

    • Art. 41 (4) LC

    Notification to the public administration: No

    • No general obligation to notify.
      However, before dismissing an employee due to poor performance, disciplinary measures, or illness, the employer must consult with the executive committee of the enterprise trade union with the aim of coming to an agreement. In case of disagreement, the two parties must report to the local branch of the State administration of labour: art. 38 (2) LC.

    Notification to workers' representatives: Yes

    • Art. 38 (2) LC: Before an employer can dismiss an employee due to poor performance, disciplinary measures, or illness, he must consult with the executive committee of the enterprise trade union with the aim of coming to an agreement.

    Approval by public administration or judicial bodies: No

    Approval by workers' representatives: No

    Procedural requirements for collective dismissals for economic reasons (redundancy, retrenchment) - 2012    

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    Definition of collective dismissal (number of employees concerned):
    No statutory definition of collective dismissal.
    Specific procedural requirements apply to redundancy of a number of employees following organizational restructuring or technological changes.

    • Art. 17 (2) LC.

    Prior consultations with trade unions (workers' representatives): Yes

    • Art. 17 (2) LC.

    Notification to the public administration: Yes

    • Art. 17 (2) LC.
      See also art. 6, Decree 2003.

    Notification to workers' representatives: Yes

    Approval by public administration or judicial bodies: No

    Approval by workers' representatives: Yes

    • Art. 17 (2) LC

    Priority rules for collective dismissals (social considerations, age, job tenure): Yes

    • Art. 17(2) LC: seniority, professional skills, family situation, and other factors.

    Employer's obligation to consider alternatives to dismissal (transfers, retraining...): Yes

    • Art. 17 (1) LC: Re-training obligation

    Priority rules for re-employment: No

    Severance pay and redundancy payment - 2012    

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    Severance pay:
    • Art. 42 (1) LC and 14 Decree 2003.
      Upon termination of employment, a worker who has been employed for more than one year is entitled to severance pay, which shall amount to half a month's wages plus other benefits, if any, for each year of service. Severance pay shall be paid within 7 day from the termination date.

      However, a worker will not be entitled to severance pay if he has been dismissed as a disciplinary measure (except in case of excessive absence) or if he is receiving a monthly pension.
    • tenure ≥ 6 months: 0 month(s)
    • tenure ≥ 9 months: 0 month(s)
    • tenure ≥ 1 year: 0.5 month(s)
    • tenure ≥ 2 years: 1 month(s)
    • tenure ≥ 4 years: 2 month(s)
    • tenure ≥ 5 years: 2.5 month(s)
    • tenure ≥ 10 years: 5 month(s)
    • tenure ≥ 20 years: 10 month(s)
    Redundancy payment:
    • Retrenched workers are entitled to a loss of employment allowance which shall amount to one month┐s wages for each year of employment, but not less than the equivalent of two months' wages.
      Labour Code, Art. 17(1), Art. 42 (worker in business, office, or organisation); Decree 2003, Art. 14.
    • tenure ≥ 6 months: 2 month(s)
    • tenure ≥ 9 months: 2 month(s)
    • tenure ≥ 1 year: 2 month(s)
    • tenure ≥ 2 years: 2 month(s)
    • tenure ≥ 4 years: 4 month(s)
    • tenure ≥ 5 years: 5 month(s)
    • tenure ≥ 10 years: 10 month(s)
    • tenure ≥ 20 years: 20 month(s)

    Redundancy payment:

    • Art. 17 (1) LC and 14 (1) Decree 2003

    Avenues for redress (penalties, remedies) and litigation procedure for individual complaints - 2012    

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    Compensation for unfair dismissal - free determination by court: No

    Compensation for unfair dismissal - Legal limits (ceiling in months or calculation method):
    1) Compensation in lieu of reinstatement requested by the employee: severance pay + loss of wages during the absence from work caused by the dismissal + plus at least two months' wages.

    2) Compensation in lieu of reinstatement requested by the employer: severance pay + loss of wages during the absence from work caused by the dismissal + plus at least two months' wages + an agreed additional amount of compensation.

    3) Compensation, in addition to reinstatement: loss of wages during the absence from work caused by the dismissal + plus at least two months' wages.

    • Art. 41 (1) LC

    Reinstatement available: Yes

    • Art. 41 (1) LC: reinstatement is mandatory unless the worker does not want to return to work.

    Preliminary mandatory conciliation: No

    • See art. 158, 162- 166 LC.
      Preliminary mandatory conciliation by the Labour Conciliatory Council is prescribed prior the judicial settlement of an individual labour dispute (art. 162- 165 LC) and collective disputes (art. 168-170 LC).
      However, disputes concerning disciplinary dismissal or unilateral termination of the employment contract can be settled directly by the Court without having to go trough the conciliation process. (art. 166 (2) LC).

    Competent court(s) / tribunal(s): ordinary courts

    • Art. 166 LC

    Existing arbitration: No

    • Not applicable to individual labour disputes. However, compulsory arbitration is foreseen for the settlement of collective labour disputes : art. 170-172 LC.

    Source of additional information - 2012    

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