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INTRODUCTION TO THE EMPLOYMENT LAW OF VIETNAM
1 Jan 2015
After gaining independence from French colonial rule, the rights and benefits of Vietnam’s workers and intellectuals were guaranteed by the State and its laws under the first Constitution of Vietnam in 1946. As Vietnam pursued socialism to rebuild its economy
post-independence, no private business was recognized and thus almost every worker was a civil servant. Employment and labor relations were largely governed by administrative procedures. Education, training, recruitment, provision of employment, workers’ welfare and benefits were provided by State-planned allocations and quotas.
Realizing that it was far behind other nations, Vietnam adopted a massive reform widely known as the “Doi Moi” program in 1986. The objective was for Vietnam to gradually shift away from its centrally planned economy. Private business was promoted, state
subsidies to industries cut, price controls, allocation and quotas eliminated, and private enterprises allowed to compete with State and collective enterprises. A new Law on Foreign Investment in Vietnam and its amendments were promulgated to attract and
protect foreign investment.
These reforms have enabled Vietnam to achieve a stable and significant socio-economic development in the last few decades. Success in its economic reforms has encouraged stronger reform of political and legal systems to facilitate the economic measures that would expedite further economic development. Although essentially still a socialist system under the Communist Party of Vietnam, Vietnam is moving towards a State-led market economy amid efforts to liberalize most of its trade sectors.
Continuing its strong efforts of domestic reform, Vietnam drives hard to integrate itself to the world. Negotiation for accession to the World Trade Organization (WTO) commenced in the 1990s and Vietnam finally became the 150th member of WTO on 11 January 2007. Vietnam has actively concluded global, regional and bilateral trade agreements and free trade agreements paving its strong way for attraction of foreign investment into the country and making it one of the fast growing economies in the region and the world.
The labor force in Vietnam is characterized by a young, industrially skilled and literate population. Recognizing this resource as valuable in its economic endeavors, the National Assembly of Vietnam enacted a first Labor Code which took effect on 1 January 1995. The first Code was meant to harmonize labor relations in the country and to protect the equality and free competition of both employers and workers in labor markets. Also, the first Code was promulgated to cope with the problems of unemployment and capitalist exploitation, both inevitable consequences of Vietnam’s first steps towards a market economy.
In conjunction with other labor related laws and regulations such as the Law on Social Securities, Law on Medical Insurance, Law on Works, Law on Labor Safety and Hygiene, Law on Trade Unions, etc. and other general laws like the Civil Code, the Law on Enterprises, the Law on Investment, the Labor Code and their implementing government Decrees, ministerial Circulars, Decisions and other implementing regulations create a fairly complex legal framework for labor-related relations and matters.
Under the labor laws and regulations, the legal rights and interests of employers are protected through provisions. These provisions guard the right to select and recruit workers and employees, manage the workforce, promulgate internal work rules, terminate employment contracts, grant incentives and impose disciplinary measures. The provisions include the right to be indemnified for damages, losses caused by employees and the right to take legal actions to protect their legitimate rights and interests.
The most important principle of employee protection is codified and embodied in the labor laws of Vietnam. The laws ensure the rights of workers to free selection of work and occupation without discrimination of race, nationality and location; the right to enter into or terminate employment; the right to rest time during work hours, holidays and annual leave; the right to equitable pay and other benefits such as bonus, social and health insurance; and the right to safe and sanitary working conditions and means. All such employee rights under the employment laws correspond with the statutory obligations of employers.
Trade unions are backed by a labor and trade union laws that accords them powerful rights in representing and protecting the legitimate rights and interests of workers. Employers are required under the laws to provide all necessary conditions and information for trade unions to perform their lawful rights and functions.
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