NA adopts revised Labour Code, adding holiday and allowing independent unions

November 20, 2019 - 15:36
The National Assembly (NA) this morning voted on the amended labour code with changes to the national holidays and labour practices, after months of heated debate among workers, employers and experts.
Workers preparing fish for further processing at a plant belonging to Sao Mai Group in the southern province of Đồng Tháp. — VNA/VNS Photo Vũ Sinh

HÀ NỘI — The National Assembly (NA) this morning voted on the amended labour code with changes to the national holidays and labour practices, after months of heated debate among workers, employers and experts.

A total of 435 deputies voted in favour of the new law out of 453 present, translating to an approval rating of 96.06 per cent. Nine voted against the law while nine abstained.

According to the new amended labour code, workers will be entitled to another day off with full pay the day following or preceding the Independence Day (September 2) holiday – which so far has been observed as a one-day holiday.

According to Bùi Sỹ Lợi, vice chair of the NA Committee on Social Affairs, the decision to extend the Independence Day holiday instead of designating the Vietnamese Family Day (June 28) as a new holiday is meant to give workers more time to rest or spend with their family if they work far from home.

Independence Day is also a more meaningful and important occasion, Lợi said.

For this revision to the Article 112 of the Labour Code, 452 deputies have voted in favour of it.

Work duration

Regarding the normal working hours, the new labour code stipulates that the ‘normal’ working hours would not exceed eight hours a day or 48 hours a week, the same as in the previous code, pending further studies, despite calls from lawmakers for a reduction.

Deputy Dương Trung Quốc said that in this new era of fast-changing technology developments, axing work hours and intensive labour will help push businesses to be innovative and forward in adopting new technologies to maintain productivity.

Opponents to the reduction are concerned that an ill-advised cutback of work time would put significant pressure on the country's currently fast developing economy.

Minister of Labour, Invalids and Social Affairs Đào Ngọc Dung previously told the NA that cutting the 48-hour workweek down to 44 hours as many NA deputies suggested will lead to losses of US$20 billion in export value a year. The cutback will also slow down the impressive growth of GDP that Việt Nam has maintained in recent years by 0.5 percentage point, while experts have urged the country to keep the annual growth at 7 per cent to avoid falling into the much-dreaded “middle-income trap”, he said, asking for more time to deliberate on this “critical issue”.

The NA Standing Committee said that increasing salary, decreasing working hours and improving working conditions are all progressive trends that the world is moving towards but the Government so far has not been able to reach a conclusion on the impacts of this issue, while opinions from employers and employees differ significantly.

“Further consideration must be exercised, to ensure harmony of the interests between all parties involved, to maintain economic growth but not at the expense of workers’ legal rights and interests,” Nguyễn Thuý Anh, NA Chair of the Committee on Social Affairs, said as she delivered the report on the amendments to the NA today before lawmakers held the vote.

The code maintains the item in which the State recommends employers implement a 40-hour workweek, however.

The new edition of the labour code also stipulates that the employer can only use workers for overtime working hours when the workers agree to the deal.

The employer also has the obligation to make sure that workers’ overtime hours must not exceed 50 per cent of the hours for their normal working day in a normal working week and cannot be over 12 hours a day, 40 hours a month and 200 hours a year.

However, the code has also provided breathing room for industries such as the production of textile and clothing, footwear, electronics, agro-forestry-fishery businesses – in which seasonal orders require more intensive workloads during certain times of the year – by extending the overtime cap to 300 hours a year.

The higher cap also applies to sectors where there are limited high-quality and skilled human resources, in cases of emergencies that cannot be delayed any further or when there's a need to deal with unforeseen contingencies such as natural disasters or power shortages, and other cases that will be clarified by the Government.

Retirement age

Article 169 of the new labour code also prescribes a roadmap to increase retirement age – the age will be adjusted on a regular basis until the retirement age for men and women in ‘normal working conditions’ reach 62 years old by 2028 and 60 years old by 2035, respectively.

Starting from 2021, the retirement age for men and women in ‘normal working conditions’ will be 60 years old and 3 months for men, and 55 years 4 months old for women. Each year, the retirement age will be raised by 3 months and 4 months for men and women, respectively.

Those working in heavy, hazardous and dangerous jobs, or in extremely disadvantaged regions, or having declined working capacity, can retire early than the prescribed age by a maximum of five years.

Meanwhile, highly-skilled workers and other special cases will be allowed to continue working five years at the maximum past the retirement age.

Labour Minister Dung said the move is a “strategic step” in line with global practices to prepare for an ageing population – making sure that the social security fund will not crash, while reducing the gap between genders.

Independent unions

The amended labour code would also mark the first time where labourers in enterprises are allowed to set up a representative organisation or join one of their own choosing that is independent from the State-run Việt Nam General Confederation of Labour (VGCL).

All of these labour representative organisations are equal in rights and duties in representing the legal rights and interests of the workers, the code said.

The representative organisation, however, would only be considered legal when it obtained a licence from a competent authority.

The move was part of Việt Nam’s efforts to conform with labour standards set in various new-generation free trade deals that it has signed, including the EU-Việt Nam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

The head of International Labour Organisation (ILO) Việt Nam Country Director Chang-Hee Lee welcomed the move in a statement following the NA’s adoption of the new Labour Code.

“Freedom of association is a fundamental right under the ILO’s 1998 Declaration on Fundamental Principles and Rights at Work. It helps improve the collective bargaining process that enables workers to get a fairer share of the profits and enterprises to negotiate the productivity improvements necessary for them,” he said.

ILO praised the new revisions and the adoption of the labour code today, saying that the ratification represents “significant progress”, as the ratification would result in considerable improvements to Việt Nam’s employment and industrial relations.

The organisation also said that for now, the task of “elaborating the new provisions through the preparation of implementing decrees and practical institutional preparation for their application and implementation” must be prioritised in order to translate the law into practice. — VNS