Labour Code

Draft revised Labour Code open for comments

The draft text of the newly revised Labour Code, which includes substantial change in numerous provisions on conditions of employment and industrial relations, is now available for public comments until 21 June.

News | 28 April 2017
HANOI (ILO News) – The draft text of the newly revised Labour Code, which includes substantial change in numerous provisions on conditions of employment and industrial relations, is now available for public comments until 21 June.

First adopted in 1994 and revised in 2002, 2006 and 2012, the Labour Code is currently in a new round of modernization to meet the new requirements in the context of Viet Nam’s deeper international integration.

As the country is joining new generation of free trade agreements (FTAs) such as the trade deal with EU, Viet Nam has a set of international obligations to improve its labour laws, institutions and practices in line with internationally recognized principles and standards. The Party Resolution No 6 in November 2016 and the Government’s follow-up action plan (Government Resolution No 38) issued on 25 April clearly state the reform agenda in this context.

“The international obligations stem from Viet Nam’s ILO membership, which requires the country to respect and promote the ILO’s Declaration on Fundamental Principles and Rights at Work,” said ILO Viet Nam Director, Chang-Hee Lee.

This declaration is enshrined in eight core conventions of the ILO covering freedom of association and the effective recognition of the right to collective bargaining, the elimination of forced or compulsory labour, the abolition of child labour and the elimination of discrimination in respect of employment and occupation.

In the EU-Viet Nam FTA, Viet Nam has committed to moving towards ratification of the three non-ratified core conventions, on Freedom of Association and Protection of the Right to Organise (Convention 87), Right to Organise and Collective Bargaining (Convention 98), and Abolition of Forced Labour (Convention 105).

Modern labour laws

According to the ILO Viet Nam Director, the labour laws today provide legal minimum protection for workers, as they are the weaker party compared to employers in labour market.

“If left entirely to market forces, workers can be subject to socially unacceptable conditions of work, such as forced labour, discrimination, child labour, unsafe work and no voices,” he said. “In Viet Nam, the Labour Code also strives to provide proper protection to workers, and strike a right balance between workers’ need for protection and employers’ need for flexibility.”

Key issues

The draft revised Labour Code includes numerous issues with substantial change. The followings are the major proposed areas.
  • Scope of the application of the Code: There is a need to ensure that the simple absence of a written employment contract does not prevent a worker from having the legal protections provided by the Labour Code. Currently workers without written employment contracts (other than temporary employees with contracts of less than 3 months) appear to fall outside of the definition "employee" under the Labour Code. This limits its application to around 11.3 million workers out of total 52.6 million in employment.
  • Retirement age: In all member states of the ILO, adjusting retirement age remains a very difficult challenge, as countries try to reform country’s social insurance system to make it sustainable, affordable and universal. This requires evidence-based deliberation to balance interests of current and future generation, sustainability of pension system which is a key social protection mechanism in a market economy, and gender equality.
  • Ensuring non-discrimination in respect of employment and occupation: There is a need to bring more comprehensive definition of discrimination in respect of employment and occupation and improving provisions related to equal remuneration for work of equal value, while removing outdated restrictions on the employment of women. ILO Conventions No 100 (Equal Remuneration) and 111 (Discrimination in Respect of Employment and Occupation), both ratified by Viet Nam, provide a good international reference point in revising those provisions, while fully considering Vietnamese context. Also, there is a need to improve provisions on forced labour in consideration of ILO conventions on forced labour (Convention 29 and 105).
  • Adjusting overtime regulations: Modern labour laws regulate maximum hours of work, including overtime, to protect workers’ health at societal level. At the same time, the labour law aims at striking a balance between need for protection and enterprises’ need for flexibility in regulation of working hours. There are many schemes which can serve both workers and employers in this respect.
  • Industrial relations: Ever since the adoption of the Labour Code in 1994, there has been always a gap between the legal provisions and actual industrial relations situation in the workplace. The newly revised draft represents a major progress, though there are still gaps with the ILO Conventions No 87 and 98. If implemented, it is likely to create an enabling environment for workers’ and employers’ representatives to develop effective labour relations based on voluntary collective bargaining and effective organizations of workers through which they can make decisions on wages and other working conditions.
“Reforming labour laws directly affects businesses, workers and the whole society,” said the head of ILO Viet Nam. “Therefore it requires thorough technical reviews of each issue based on evidence, and consultations with representatives of both workers and employers.”

The ILO is a UN agency specialized in employment and labour policies, with governments, employers’ and workers’ representatives as its decision-makers.

“We are ready to provide technical advice and assistance throughout the process of Labour Code revision and implementation,” said Lee.

* Funding for the New Industrial Relations Framework project is provided by the United States Department of Labor under cooperative agreement number IL- 29690-16-75-K-11. This material does not necessarily reflect the views or policies of the United States Department of Labor, nor does mention of trade names, commercial products, or organizations imply endorsement by the United States Government. One hundred percentage of the total costs of the project or program is financed with Federal funds, for a total of 4 million dollars.