The Vietnam government recently issued a new decree to ensure greater rights for female employees. The regulatory change under Decree No 85 came into effect on November 15, 2015. Under the new regulations, female employees will get better health benefits, greater representation in unions and rights of unilateral termination of labour contracts. Meanwhile, the decree also elucidates several benefits to employers who adopt the new labour regulations. The details of the decree issued by the Vietnam’s Ministry of Labor, Invalids and Social Affairs, on October 1, 2015 are discussed in the section below.
Rights of female employees
During health examinations, female employees have the right to undergo obstetric (maternity-related) examinations. Female employees are also entitled to receive menstrual leave, which will be 30 minutes per day and for a minimum of three days each month. The specific details of the time can be decided according to real working conditions and after negotiations between the employer and the female employee.
In addition, female employees, who are raising infants under 1-year old should be granted an hour-long break each day during working hours to breastfeed children, collect and store milk or take rest. The decree states that female employees should be fully paid as per their contract regardless of the new stipulations for time off mentioned above.
Right of unilateral terminations and temporary suspension of labor contracts
If an authorised health facility states that the continued work could lead to a negative impact on the unborn child, a female employee may terminate the labour contract unilaterally or suspend the contract. However, the female worker needs to give notice in line with the recommendation of the health facility. The notice needs to be submitted along with the health report, stating that the continued work would affect the unborn child. The duration of the temporary suspension should be the same as the period stipulated by the health facility.
The decree clarifies the tax rebate that employers seek to gain on hiring several women workers. The decree formulates three bands for such employers and tax rebates will be calculated according to the band that employers fall under:
- Hiring 10-100 females, accounting for greater than 50 percent of the total employees.
- Hiring 100-1,000 females, accounting for greater than 30 percent of the total employees.
- Hiring more than 1,000 females.
An employer should undertake the formation of a base union as representatives of female employees, in case a labour union has already been established. In case no union exists, employers must establish a union if requested by a female employee. If there is no such request, the employer ought to take a vote from all female employees. The vote will pass if more than 50 percent of the female employees at the corporation vote for a specific outcome.
The employer must also help and support in the cost of childcare. Employers are permitted to undertake several activities to support childcare. Employers may create kindergartens and nurseries for children or bear the cost of external kindergartens and nurseries through fee waivers and subsidies.
The decree also mandates employers to have improved working conditions for women. Employers ought to ensure that there are sufficient bathrooms and restrooms for women. In addition, working hours should be flexible for female employees.
The new policy is a significant development in the business environment in Vietnam. This decree makes Vietnam one of the most conducive business environments for female employees. The provisions of the latest law ensure that female employees feel empowered at the workplace. In addition, the number of additional benefits provided to women will boost labour productivity for female employees.
An independent study noted that employees look at employers more favourably, when the latter extend support to the former for activities not related to work. The decree ensures that it plays on such employee psyche to ensure a greater sense of participation in the workforce. In addition, the incentives create a greater chance of employee retention, which often translates into larger profit margins.
The law will also aid the perception that expatriate female workers have about Vietnam’s labor laws. Vietnam is often tainted with the same brush as other Asian nations such as China, Thailand and India, which often have labor laws that are unfavorable to female workers. Therefore, the new labor laws will make Vietnam an attractive destination for the female expatriate population.
What should companies do?
Companies must ensure that they educate themselves on the latest decree. The complete details of the decree are on Vietnam’s Ministry of Labour, Invalids and Social Affairs website. All employers that act on the recommendations of the decree and change their HR policy to ensure compliance stand to insulate themselves from the risks that possible labour disputes entail. Employers, which seek to effectively manage their compliance requirements, might need tailored consultancy services.
Dezan Shira & Associates provides human resources and compliance services to companies in Vietnam. Our experience in the Vietnamese market allows us to help companies achieve their desired growth trajectory in Vietnam. For more information please contact our specialists at email@example.com.
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email firstname.lastname@example.org or visit www.dezshira.com.
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