Page 10 - VSIP E-Newsletter Q_1_2012

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VSIP Binh Duong:
Tel: 84-650-3743 898
Fax: 84-650-3743 430
VSIP Bac Ninh:
Tel: 84-241-3765 668
Fax 84-241-3765 666
The Leading Township & Industrial Park Developer in Vietnam
VSIP Hai Phong:
Tel: 84-31-3959 868
Fax: 84-31-3959 886
VSIP Quang Ngai:
Tel: 84-650-3743 898
Fax: 84-650-3743 430
We discuss below the need for employers in Vietnam to adopt and register internal labor regulations (“ILRs”).
ILRs are a regulatory platform governing, amongst other things, issues relating to disciplinary breaches in the
workplace. The work rules and procedures contained in an employer’s ILRs form part of the contractual
relationship between employer and employee if they are duly registered.
The labor regulations in Vietnam are likely to undergo changes as a result of the expected enactment of a
New Labor Code in May 2012. As part of the legislative process, the Vietnamese National Assembly released
several successive drafts of the proposed New Labor Code. However, a brief comparison between current
labor laws and those of the most recent draft does not reveal significant changes in the way employers are
able to address breaches and disciplinary actions in the workplace.
The conditions and procedures pertaining to this area of the law are regarded as inflexible and difficult to
implement for employers as this area of Vietnamese law in undisputedly considered as leaning in favor of the
Legal requirements in respect of Internal Labor Regulations
ILRs are mandatory in Vietnam for companies employing ten employees or more. ILRs may be created by the
employer in line with and to reflect the specificities of the business and industry of the employer but these
cannot be contrary to the Vietnamese labor legislation.
The employer must discuss the proposed ILRs with the executive committee of the relevant trade union, if
there is one. Once employer has adopted ILRs it must register them with the relevant Department of Labor
War Invalid and Social Affairs or the board of management of the export processing or industrial zone (where
the employer is located in such a zone) (such relevant authority, the “Labor Authority”) before the ILRs
become effective.
Why does an employer need to have registered ILRs?
The adoption and registration of ILRs should not only be seen as a mere legal requirement. These are also an
opportunity for the employer to establish clear rules and procedures applicable to its employees in the
workplace. ILRs which are appropriately registered are regarded as one of the most important documents
regulating certain labor matters including disputes, especially dismissal, discipline, compensation,
responsibility for damage, and various others. In case of dispute, the ILRs would not only provide established
procedures to address such situations in a predictable manner, but would also provide a legal platform for the
employer to enforce the procedures contained in the law. For instance, dismissal of an employee is possible
only for reasons provided both at law and under the employer’s registered ILRs.
Legal Updates