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VIETNAM: New Labour Law Expands Workers’ Rights and Raises Statutory Retirement Age

Workers will be able to join an independent trade union of their own choosing, rather than being obliged to sign-up to the state-run Vietnam General Confederation of Labour, once the country’s newly-amended Labour Code comes into effect on 1 January 2021. The revised legislation is also intended to improve collective bargaining rights, provide enhanced protection against workplace discrimination (including stricter definitions of ‘discrimination’ and ‘harassment’), and ensure better protection for younger workers, including clearer guidelines on forced labour and the employment of children.

As of the date of its enactment, the law will also see the male retirement age rise by three months per annum from its current level of 60, before settling at 62 from 2028 onwards. For women, the statutory retirement age will rise from its current level of 55 to 60 by 2035 in a series of four-month annual increments. It is believed the retirement age has been raised in light of growing concerns over the country’s increasingly elderly average demographic.

While the new law maintains the statutory maximum working day of eight hours (up to 48 a week), it also makes it clear that overtime is wholly optional and should never exceed 200 hours in any 12-month period. In certain sectors where demand is seen as seasonal in nature – including the manufacture of clothing, footwear and electronics, and the fisheries and agro-forestry industries – a 300-hour overtime ceiling applies. In addition, workers will be entitled to a new holiday on National Day (2 September). taking the total number of public holidays to 11.

Furthermore, expatriate workers married to Vietnamese citizens and living in Vietnam will no longer require a Work Permit. The new provisions also widen the remit of the Labour Code by extending cover to those who are employed but are not in receipt of a written contract. This will take the number of protected workers from 15 million under the existing legislation to 56 million from 1 January 2021 onwards.

Overall, the planned labour law has been seen as a bid by the country to ensure its compliance with the terms of several new and pending Free Trade Agreements, most notably the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA).

Content provided by Picture: HKTDC Research
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