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Changes in Vietnamese labour law after COVID-19?

Trang chủ | News (22/06/2021)

Due to COVID-19 virus global experts predicted that there would be recession again, as a lot of economies are only operating at less than 50% of their manufacturing capacity so the businesses continue to navigate and adapt to the Covid-19 epidemic, many are asking how best to manage their labour force as businesses are inevitably slowing for most. Vietnamese economy is also affected due to this and might be only able to achieve its 50% GDP projection which was estimated to be 6-7% in 2020 so government has issued some new guidelines for business to project themselves, few of them are mentioned in this article as below:


Termination of work-permit & business Visa for expat employee at the moment not in Viet Nam:


According to Resolution No. 28/NQ-CP on Regular meeting of the Government in February 2020 dated 10th March 2020, the Government has requested the Ministry of Labor, War Invalids and Social Affairs to suspend the issuance of new work permits to foreign employees from countries and territories affected by Covid-19 epidemic. New work-permits were issued from May 2020 only to expats already in Viet Nam. All the previously issued business visas (any form of visa) and work-permit were terminated only for the expat who were not in Viet Nam, so if they want to reenter Viet Nam, they need to apply for a new Visa, as well as work-permit. And recently only a few business visas have been issued to expats who were not in Viet Nam, so they can re enter and start their already existing businesses or jobs in Viet Nam.


Sick Leave:


If In this case, any employee would claim sick leave due to being isolated, they are not entitled to social insurance benefits under the sickness regimes. The rights of employees during the isolation period shall be settled according to agreements with the employers, specifically as follows:


  • Agree to apply the form of working from home and/or utilize the employees’ annual leaves in accordance with the labor laws and policies of the employers to enjoy full salary.
  • Agree to suspend working and enjoy the salary for work suspension consented by the two parties in accordance with the regulations of laws.
  • Agree to take unpaid leaves.

Reduction in Working hours:


With mutual arrangement between employer and employee, there can be reduction of working days/hours and employees’ salary. It is worth noting that the reduced working hours are considered work suspension duration and according to the laws, in case of work suspension due to dangerous epidemic diseases, the salary for work suspension shall be agreed by the two parties but must not be lower than the regional minimum salary stipulated by the Government.


Termination of contract:


COVID-19 comes under the category of natural disaster, so the employer has the option to terminate the contract only after they can prove that they have applied necessary remedial measures (such as reaching mutual agreements with the employees on salary reduction or unpaid leave, etc.) but still have no choice other than cutting jobs. In this case, the employers still have to follow provisions on advance notice and payment of severance allowance to the eligible employees.



Short-term benefits from Government:
Government had as issued Directive No. 11/CT-TTg dated 04th March 2020 of the Prime Minister, to considering the following supports for businesses affected by Covid-19 epidemic:


  • To extend the deadline of tax payment and land lease. The Ministry of Finance has already submitted the draft Decree to extend 05 months for tax payment and land lease.
  • To waive/reduce tax, fee, charges.
  • To halt compulsory insurance contribution up to June or December 2020 and impose no interest on late payment.
  • To adjust the deadline for trade union fee contribution.
  • To increase self-relief for Personal Income Tax calculation.
  • To establish Corporate Income Tax policy to support affected enterprises, especially SMEs.
  • To waive and reduce interest, etc.



Hopefully this article was helpful in your research relating to FDI in Viet Nam. And we at GPO can assist you by providing market research as per your requirements. We can also assist you in recruiting a freelancer to generate revenue before setting-up office in Viet Nam and if everything goes as per your expectations we can also assist with business legal advice for getting your business registered in Viet Nam and then offer our core service of been your HR business partner in Managing your daily HR activities, as we are an HR business consultancy firm in Viet Nam. So, please do connect with us and let us be your long-term partner in Viet Nam.


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