Tag Archives: COVID-19

COVID-19 and eligibility to enter Vietnam

Border Control

As of the date of this post, the Government of Vietnam still maintains suspension of entry for expats, including people with a Vietnamese visa exemption certificate.  A potential date to allow foreigners to enter Vietnam again has not been formally announced by the Government yet, though further information is expected imminently.

The current entry restriction, which came into effect on 22 March 2020, has limited exemptions for diplomatic, official duty, as well as special circumstances, including experts, business managers, high-skilled technicians (pursuant to Government’s Decree 11/2016/ND-CP, it can be interpreted that experts, business managers, high-skilled technicians are those who have been issued with work permits to legally work in Vietnam), and other essential categories as determined by the Government of Vietnam.  That is to say, statutorily speaking, there exists a possibility where such subjects are entitled to enter Vietnam, subject to approval of provincial People’s Committee and Department of Immigration, after the  consultation with the Ministry of Public Security, Ministry of National Defense, Ministry of Foreign Affairs, Ministry of Health, and other relevant agencies.

Despite this, to the best of our knowledge, though feasible in theory, practice appears to be different and it seems no formal approval has been granted yet, partly due to absence of any guidance from the Government to each province in detail.

Should an enterprise wish to send an expat (with a valid work permit) to Vietnam to manage operations in Vietnam at the moment, they should seek approval for entry on a case-by-case basis from the provincial People’s Committee and Department of Immigration as first priority.

Quarantine Requirements in Vietnam

Since 8 March 2020, all people who have arrived from outside the country must (i) complete a medical declaration form, which can be done by completing a paper form on arrival or a digital form online before the trip via this link https://tokhaiyte.vn/ and (ii) undertake COVID-19 testing. On this basis, regardless of whether the COVID-19 testing result is positive or not, everyone entering Vietnam, including Vietnamese nationals, have been subjected to mandatory, centralized quarantine for 14 days. It is worth noting that this quarantine period, under some circumstances, might be prolonged to more than 14 days, at the broad discretion of the authorities.

Hệ thống thông tin quản lý Khai báo Y tế

tokhaiyte.vn

Hệ thống thông tin quản lý khai báo y tế

So-called “centralized” quarantine sites in Vietnam may be basic facilities. Therefore, Ministry of Health released Decision No. 1246/QD-BYT on 20 March 2020 (“Decision 1246”) to grant more flexibilities for the mandatory quarantine. Specifically, a person subject to quarantine is entitled to request to be quarantined at a permitted hotel to enjoy better facilities and would need to bear all accommodation expenses during the quarantine period.

By law, this requires the individual to simply (i) fill in a Request Form under Annex 2 of Decision 1246; and (ii) submit same to immigration authority. However, we note that the procedure for this step is neither transparent nor well-organized and unlikely to be workable in practice on an ad-hoc basis.  It is thus necessary to ensure that arrangements are confirmed directly with the relevant provincial authorities of the port of entry.

For more information, please contact Giles at GTCooper@duanemorris.com or Le Nhan at NTLe@duanemorris.com or any of the lawyers in our office listing. Giles is Chairman of Duane Morris Vietnam LLC and branch director of Duane Morris’ HCMC office.

VIETNAM – MPI PROPOSES MEASURES TO SUPPORT BUSINESSES – PROMOTE DISBURSEMENT OF PUBLIC INVESTMENT CAPITAL AMID COVID-19

On 23rd April 2020, The Ministry of Planning and Investment issued Document No. 2640/BKHDT-TH to consult related government agencies on Draft resolution of the Government on solutions to remove difficulties for production and business, promote disbursement of public investment capital and ensure social order and safety in the context of COVID-19 (“the Draft”).

This is an effort of the Government in aiming to restore the power of Vietnam’s economy that has been negatively affected since the pandemic broke out in February.

The Draft focuses on 5 main topics, with key provisions as follow:

1. Reduce/Exempt tax:
– Exemption of guarantee fee arising in 2020 for government-guaranteed loans for aviation businesses;
– Reduction of lending interest rates for small and medium-sized enterprises which are prioritized by small and medium-sized enterprise development funds: reduce lending entrusted interest rates by around 3%; reducing direct and indirect lending interest rates by approximately 2%;
– Reduce 50% of corporate income tax for small and medium enterprises and cooperatives in 2020.
– Reduce/Exempt fees: 100% exemption of license fees in 2020 for affected business households. For those that paid, the amount paid is deducted from the obligation to pay license fees in the following year;
– 50% reduction in registration fee when registering for a car manufactured or assembled domestically by the end of 2020 to stimulate domestic consumption;
– 30% reduction in land rent for a period of 6 months for production and business establishments that have been stopped due to COVID-19.

2. Delay of tax payment time:
– Allow the postponement of special consumption tax payment for domestically manufactured cars until the end of September 2020 for amounts payable from March 2020;
– Allow deferred payment of VAT to the end of September 2020 for affected enterprises;
– Extension of the time for payment of export tax to the end of September 2020 for payables arising from March 2020;
– Extension of personal income tax payment to the end of September 2020 of individuals working in the affected businesses arising from March 2020;
– Extend the term of preferential interest rate loans to 1 year.

3. Apply special entry procedures for foreign experts working for businesses in Vietnam: extend their work permit; issue new work permits to experts, business managers, technical workers who are foreigners to replace those who cannot return to Vietnam.

4. Accelerate disbursement of public investment capital;

5. Accelerate investment procedures for projects; Attract new investment resources;

6. Forbid to apply the regulation of saving 10% of total investment for new projects starting in medium-term public investment plan 2016-2020 and allocating capital from public investment plans in 2020;

7. Temporarily suspend the application term of Decree 68/2019/ ND-CP on management of construction investment costs until the end of 2020;

8. Promulgate a resolution on conversion of investment forms for 8 projects on the North-South Expressway on the east side from public-private partnership to public investment.

Some Clarifications Required

o While the Draft proposes straightforward and welcoming measures for supporting business in this pandemic, there are a number of issues that will require additional guidance, among others, such as:
o The list of enterprises affected by COVID-19 is unclear and limited, as it does not cover the petroleum, entertainment, etc. industries that are also heavily affected.
o Besides, it is unreasonable to propose VAT reduction for some affected industries such as aviation and tourism because the current laws have specific provisions for VAT reimbursement, and it creates inequality with other affected industries;
o Extension of time limit for corporate tax payment year 2019, VAT, personal income tax and land rent are only 5 months. Given that the pandemic has occurred for approximately 3 months now and has left devastating consequences, coupled with extreme natural disasters in many regions of Vietnam in the past months, the time limit should be extended to 1 year;
o Most of the wordings in the draft are quiet general; the reduction or exemption of tax and fees should be associated with specific household/individual (poor household of specific income levels, children…)
o Proposing a 50% reduction of registration fee when registering domestically manufactured or assembled cars until the end of 2020, applying special consumption tax incentives to the domestic automobile industry is a violation of the commitment to zero discrimination between domestically produced goods and imported goods upon accession to the WTO.

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Please do not hesitate to contact the author Dr. Oliver Massmann under omassmann@duanemorris.com. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC, Member to the Supervisory Board of PetroVietnam Insurance JSC and the only foreign lawyer presenting in Vietnamese language to members of the NATIONAL ASSEMBLY OF VIETNAM.

VIETNAM – COVID 19 – IMPLEMENTATION OF LAWS NOT UNIFIED IN ALL PROVINCES – On the continuity of business during COVID-19 pandemic

The COVID-19 outbreak has been declared a public health emergency of international concern by the World Health Organization, causing huge impact on people’s lives, families and communities. Organizations are under certain concerns about the continuity of their business as how long the pandemic lasts for, a possible suspension order, unwanted contract terminations, force majeure issues, reduction of price, etc.

We understand your concerns and we trust the latest update on the Government’s instruction on the business continuity might provide you with some useful information at this stage.

1. The businesses entitled to continue operation

(“Directive 2061”) to instruct on the business that can continue operating during social distancing period i.e. until 15 April 2020 (and a possible extension to 30 April 2020 as recommended by the Ministry of Health of Vietnam), which includes:
• Factories, manufacturing units;
• Transport works, construction;
• Businesses providing essential services and essential goods, i.e. foods, medicine, petrol, oil, electricity, water, fuel, etc.);
• Education units, banks, treasury, services directly connecting to banks and auxiliary to businesses (i.e. notary offices, lawyers,registry of secured transactions, etc.), post, telecommunications, auxiliary services for transportation, import and export, health examinations and treatmenst, funeral, etc.
The above “etc.” phrase literally indicates that the list units permitted to operate is not exhaustive.
Directive 2061 allows each province in Vietnam to implement the PM’s instruction in their own way by saying the chairman of each province shall further instruct on this. Unfortunately, the implementation of the Directive is not unified across Vietnam territory.

2. The implementation of Directive 2061 in some areas

2.1. Hanoi City
Hanoi took a strict approach from the start of the pandemic prevention in its Directive 05 on 31 March 2020. Hanoi PC ordered non-essential shops and service-providers to suspend their activities.
On April 2020, the Department of Justice of Hanoi issued Document 925/STP-PBGDPL clarifying a number of measures to cement the social distancing requests. So far, Hanoi mainly focus on resitricting operations of the restaurants, consumers’ goods or other public places only.

2.2. Ho Chi Minh City
Ho Chi Minh took a totally different approach, that it issued a Scoring System under Decision no.1203/QD-BCD. The Score System comprises a set of sub-indexes which does not base on the business lines, but based on the quantity of workers, the density in workshop, workers using sanitizers and wearing masks, etc. If the score of an entity is low or average, its operation can carry on, otherwise it must suspend.

2.3. Hai Duong Province

Hai Duong province takes a similar approach as Hanoi City. However, it has more regulation that factories do not carry out 3rd shifts. Hai Duong PC also requires a submission of a written commitment from all businesses in the province.

3. Required measures for businesses continuing its operation

Although the approach is different in each area, the required measures to ensure the safety and prevent the epidemic seems unified. The fortunate business which falls within the scope of being permitted to continue must implement the follows:
• Requiring employees to wear masks and equipping enough facility to prevent and control the epidemic as advised and recommended by health authorities;
• Requiring employees to conduct health report and comply with restrictions on moving, contact and communication;
• Suspension of unurgent activities, reduction of the concentration of employees;
• Organization and management of the transportation for employees to and from work (if any) must ensure the prevention of infection.
In case of incapable to ensure the above measures, business must suspend.
We trust some of the above info is useful for you at this stage. If you are not clear if your business in your respective Province can be affected by any of the above measures and requirements, please do not hesitate to contact us.

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Please do not hesitate to contact the author Dr. Oliver Massmann under omassmann@duanemorris.com or any other lawyer in our office listing if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.
Thank you!

COVID-19 Guidance for Businesses in Vietnam: New Social Distance Policies, Lockdown or not?

Vietnam has taken further concrete steps to combat the COVID-19 crisis as the fight enters a new stage. Some uncertainty remains however as to how the steps are intended to be implemented in practice.

On 31 March 2020, the Prime Minister of Vietnam issued Directive No. 16/CT-TTg on the Implementation of Immediate Measures for the Prevention of the COVID-19 pandemic (“Directive 16“).  Primarily, Directive 16 sets forth strict social distancing on a nationwide basis for 15 days starting 1 April 2020.

Specifically, the mandates set out in the Directive include:

  • Everyone is required to stay at home, except for essential trips such as buying food, medicine, for emergency circumstances, going to work at factories and businesses that do not close or suspend their operations;
  • A minimum distance of two meters is required for meetings;
  • Gatherings of more than two people are prohibited in all public places, except for workplaces, schools, and hospitals;
  • Factories and workshops are required to ensure a safe distance among employees, facemasks must be worn, and workplaces must be sterilized according to regulations;
  • All State agencies are required to implement work-from-home policy for their staff members, except for special needs;
  • Public transportation services will be suspended and travel from region to region will be minimized, except for essential goods and services; and
  • Border crossings between Vietnam and Cambodia and Laos will be temporarily closed from 1 April 2020.  Immigration will be tightly controlled at all international border crossings; all those entering from Cambodia and Laos will be quarantined in central facilities for 14 days.

Directive 16 implies, without actually stating expressly, that operation of non-essential businesses must be suspended.  However, Mr. Mai Tien Dung, Minister and Chairman of the Government Office, later clarified in an interview that the new social distancing rules are not a lockdown as in other affected countries. The message appears to be that management of businesses may make their own decisions as to whether to remain open or not. At the same time, they must be responsible for ensuring their employee’s health and safety if they choose to continue to operate. In fact, this is the status quo as employers must always bear such responsibility under workplace legislation including the Law on Occupational Hygiene and Safety. Employees who consider themselves at risk by being at the workplace have a right to refuse to work and must be paid for any ensuing absence.

Anecdotally, we have heard of police officials visiting businesses and asking them to close. Some have interpreted this as mandatory, others are being given a less clear message.

Bottom line, at the present time there are differences around the country in how Directive 16 and companies can expect local officials to provide guidance on what it means in practice for them. For example, to implement the Prime Minister’s Directive, the Hanoi City People’s Committee issued Directive 05 / CT-UBND. That Directive states that factories, production facilities, and construction sites must facilitate for officials, employees and workers to work at home (how this is intended to work for construction sites is anyone’s guess).

It goes on to say that the following factories and enterprises may continue to operate:

  • Those producing and trading in essential goods such as: processing food, fruits, pharmaceuticals, medicines, medical supplies and equipment in service of epidemic prevention and combat, national security and defense;
  • Electricity, water and sanitation services;
  • Farms breeding cattle, poultry, aquaculture;
  • Clean water supply plants;
  • Garment factories producing medical masks;
  • Plant producing bottled water, juice; and
  • Factories needing to produce orders to be paid pursuant to contracts signed before April 15, 2020.

The Hanoi PC has also identified a rather wide list of businesses that are allowed to stay open including supermarkets, banks, tourist accommodation, shopping malls, television stations, healthcare services, grocery stores, funeral homes among others.

Business owners in other locations should look out for further direction from their provincial authorities as to how Directive 16 will be applied in practice. In all cases, businesses should be pro-actively developing policies, if not already , to prepare for the prospect of heavier-handed lockdowns including, where feasible, clear work from home protocols.

For more information, please contact Giles at GTCooper@duanemorris.com or Dang Ngoc Huyen at HDang@@duanemorris.com or any of the lawyers in our office listing. Giles is co-General Director of Duane Morris Vietnam LLC and branch director of Duane Morris’ HCMC office.

COVID-19 Guidance for Employers in Vietnam: CANs and CAN’Ts

Employers the world over are facing unprecedented issues brought about by the COVID-19 pandemic. Vietnam employers are no different. They need to be able to both respond rapidly and decisively to actual facts and formal and information government direction as it arises and simultaneously comply with legal obligations set out in law and statute. What trumps what?

An earlier blog post addressed specific remuneration issues under Vietnam law (see: here). That is a topic that will be further addressed as this crisis continues to unfold globally. This post covers some additional ad-hoc issues that we have seen come up for employers in Vietnam.

As ever, these topics are subject to change, potentially very suddenly, but we’ve attempted to set out the current position in law and practice. Please get in touch for more information.

Topic 1: Right to disclose an employee’s COVID-19 status to other colleagues

Strictly speaking, this information is deemed by law to be ‘confidential medical information’ of the employee, meaning that an employer is NOT permitted to disclose the fact of an employee’s sickness to others in the absence of the relevant employee’s express consent. An employer could disclose generally that an employee has tested positive for COVID-19 without identifying the specific individual affected.

On the other hand, taking into account the wider public health imperative and the positive obligation of all infected individuals to isolate and identify individual contacts for checks (Art. 3.2.1 of Guidance on medical quarantine in term of Covid-19, under Ministry of Health’s Decision No. 904/QĐ-BYT dated 16 March 2020) plus the positive obligation on employers to disclose the positive case (noting that failure to disclose the positive case of disease is strictly prohibited under Article 8.3 of The Law on Prevention and Control of Infectious Diseases) it can reasonably be concluded that, even without express consent, employers must provide other employees and the authorities with identifying information of affected employees that they have knowledge of in order to meet wider obligations.

In other words, this is one area where it seems likely that wider public health concerns and obligations trump individual personal privacy regulations. Having said that, employers are advised to proceed in a way so as to limit, to the extent possible, the scope of privacy breaches. The practical ability to do this will vary from case to case but may includes: (i) making at least a reasonable effort to obtain prior express consent from affected employees; and (ii) disclosing the information to as small a circle of people as reasonably possible in order to address public health obligations; and (iii) ensuring that language used is as neutral as possible and does not stigmatize the individual or overly-dramatize the situation.

On the first point, employers would be well-advised to pro-actively prepare specific consent forms that can be rolled out at short notice in a bid to obtain express consent on an as-needed basis.

Topic 2: Right to require employees to work from home

Theoretically speaking, any change to an employee’s workplace as recorded in their labor contract must comply with the terms of the relevant contract or be subject to express prior consent of the employee concerned.   Despite this, in the current situation, we are of the view that employers are able to require employees to work from home regardless of the foregoing, should the employer determine that such change of location is necessary to protect health and/or to comply with orders or requests of competent authorities.

In doing so, the employer would be entitled to expect the employee to continue to discharge regular duties and working hours. Reality does however dictate that this may be difficult in practice for the employer to control and/or the employee to achieve. The employee would have a reasonably expectation of being provided necessary means to discharge duties (such as computer).

We are also of the view that employers could mandate this on the basis of implementing plans under the Law on Prevention and Control of Infectious Diseases. Again, it would be important that the plan be properly prepared and informed to employees.

It remains arguable what rights employees may have to insist on working from home where the employer reasonably considers it unnecessary for public health purposes and in the absence of any positive requirement from authorities to order work-from-home arrangements where possible.

Topic 3: Right to screen employees’ and visitors’ temperatures

The Law on Prevention and Control of Infectious Diseases 2007 generally recognizes enterprises’ rights to prepare and implement plans to prevent and control infectious diseases on a case-to-case basis.

In our view, this would provide a basis for employers to insist on temperature screening for employees and visitors entering the workplace. In fact, this is widely accepted practice by most, if not all, State authorities and State-owned enterprises in Vietnam and many private businesses as well.

It would however always be preferable to have an actual written policy that outlines the reason by reference to the Law on Prevention and Control of Infectious Diseases and procedures to implement including how to act in the case of temperatures considered to be high.

Topic 4: Right to report in case of employee’s abnormal symptoms

In principle, an employee is obliged to comply with their employer’s internal policies on labor safety and hygiene at the workplace. Specifically, one of these obligations is to report any potential risk where dangerous and hazardous factor might appear at workplace (Art. 18, Law on labor safety and hygiene 2015). Concurrently, employers are entitled to be aware of all health-related risks at the workplace and have a responsibility to keep employees and relevant authorities updated on same (Art.23.4, Law on Prevention and Control of Infectious Diseases 2007).

Therefore, it is allowable for employers to report to competent authorities and/or to update its internal management personnel in case an employee has abnormal symptoms, including without limitation to the employee’s temperature which is abnormal.

Topic 5: Right to collect employees’ personal travel information and obligation to declare same to authorities

Vietnamese law is silent on this topic. As a matter of practice, those who have recently visited/ passed through territories considered as pandemic regions (e.g., the US, European countries, China, Iran, etc.) and those suspected of suffering from Corona virus are required by the government to undergo a compulsory 14-day centralized quarantine. In addition, individuals who have been in close contact with someone who has tested positive for COVID-19 (known as ‘F0’ individuals) are also subject to such mandatory centralized isolation/ self-isolation, depending whether they are determined as F1, F2, F3, F4 or F5 individuals respectively.

Following this, it is reasonable to conclude that employers are entitled to seek and be made aware of such information with a view to best protecting all their employees and reporting same to the competent authorities where necessary.

For more information, please contact Giles at GTCooper@duanemorris.com or Le Nhan at NTLe@duanemorris.com or any of the lawyers in our office listing. Giles is co-General Director of Duane Morris Vietnam LLC and branch director of Duane Morris’ HCMC office.

 

COVID-19 Guidance for Vietnam-law Employers: Remuneration Focus

COVID-19 undoubtedly has impacted your business or workforce in some way. The past period has been full of challenges for all employers as we all face the actual influence of this difficult-to-control global pandemic. Clearly, this is a unique and rapidly-developing situation.

In Vietnam, the Prime Minister formally issued Decision 173/QĐ-TTg declaring that the corona virus is an epidemic (issued 1 Feb 2020 and effective on same date).   With a focus on remuneration payment to employees during the epidemic season, this article is provided based on current laws and, where relevant and available, Government ad-hoc policy and guidance.

As ever, Employers are of course free to implement policies that are more favorable than the statutory minimum. Also, this is an area subject to change, potentially very suddenly.  We will endeavor to update this as possible.

  1. Salary payment for sick employee, regardless of regular sickness or positive result of Covid-19

Once an employee has illness symptoms or is feeling un-well and then stays home, please kindly see the various options as follows, which should be considered on a case-to-case basis.

Sick Leave under Vietnam’s Social Insurance regime (SI)

If an employee is sick and obtains a valid medical certificate evidencing same, the Employer can file this medical certificate with the SI and the SI will pay sick leave entitlements to the employee.  Such entitlement is equal to the lower of 75% of the employee’s regular salary or 75% of the SI cap.

With respect to quantity, the SI will pay up to: (i) 30 days/ year for those who have contributed to the SI fund for less than 15 years; (ii) 40 days/ year for those who have contributed to the SI fund for more than 15 and less than 30 years; and (iii) 60 days/ year for those who have contributed to the SI fund for more than 30 years.

In short, assuming Employer has contributed in full as required to the SI scheme (employee and Employer contributions) then such Employer is not required by law to pay salaries for employees on sick leave.

Sick Leave voluntarily offered by Employer, in addition to SI

The above is subject to any other policies and practices that Employer may, in fact, have in place that offer greater additional benefits to employees.  Some Employers voluntarily offer extra fully-paid sick leave to employees and, if such an arrangement is in place at your company, employees would be entitled to ‘use up’ any additional ‘paid’ sick leave entitlement before filing statutory SI claims.

Unproven sickness

Strictly speaking, the SI regime will only provide salary cover for employees with certified sickness.  Thus, an employee who is isolated to be assessed as to whether they are sick or not would not be covered by the SI regime as it stands now.  In such circumstances, it would be recommended that the Employer seek to reach agreement with the employee to pause work on a reduced salary (see item #2 below).

Relationship with paid annual leave entitlement

Under all circumstances, an affected employee would be entitled to apply to take their accrued paid annual leave entitlement first.

  1. Salary payment for those who have to be home because their child’s school is closed

Very upfront, we note that this reason for being home is not considered as sick leave or leave to take care of a sick child under the age of 7, both of which are permitted reasons for absence from work covered under Vietnam’s SI regime (as explain under item #1 above). In addition, as addressed above under item #1, unproven sickness would also fall under this category.

Strictly speaking, unless the employee is able to work from home due to his/her job description and the Employer was to agree with that, absence from work for this reason is considered either absence without permission or leave pursuant and subject to the Employer’s specific leave regime.

As such, the options for salary payment would be the below, in order of priority:

Option 1: the employee applies for paid annual leave until they use up their accrued annual leave entitlement.

Option 2: the employee formally pauses work as a direct result of epidemic and following negotiation and agreement with their employer on reduction of contractual salary during such period (Art. 98.3, Labor Code 2012) (see further at item #3 below).

Option 3: the employee and their employer discuss and reach agreement on unpaid leave (Art. 116.3, Labor Code 2012).  Agreement on this in principle, and length of any unpaid leave, is essentially at the discretion of the parties to agree.

  1. Temporary suspension of operations

For avoidance of doubt, temporary suspension of operations referred to here is a decision to temporarily pause the operations and not a decision to permanently close the business location(s).

From a corporate law perspective (Art. 200, Law on Enterprises), an enterprise is entitled to make a formal application to temporarily pause/ suspend its operations (up to a maximum 2 years).  This applies at all times, regardless of occurrence of any epidemic or not.  However, formal temporary suspension of operations is not a legal basis for Employers to unilaterally terminate employee labor contracts.  In other words, existing employment must be either maintained as normal, including with respect to payment of salaries, or employment relationships terminated lawfully on some other basis.

From a labor law perspective, epidemic is a legal basis for Employers to: (i) unilaterally terminate labor contracts pursuant to Article 38.1(c), Labor Code 2012; or (ii) maintain employment relationships but negotiate reduced salaries with affected employees (such amount not to be lower than the applicable regional minimum wage) for a specific period, pursuant to Article 98, Labor Code 2012.

At this time, Vietnam law appears to be silent on how employment matters are handled in the case where Employers are ordered by competent authorities to temporarily shut down operations as a result of epidemic.  The People’s Committee of Ho Chi Minh City (PC) recently issued orders to shut down all cinemas, bars and other entertainment venues at least until the end of March 2020 without providing any specific guidance on employment-related matters.

At present then, there is no real difference in practice between a temporary closure made at the decision of the Employer as a result of epidemic and one ordered by a competent authority.  In both cases, the initial starting point is that it would need to continue to pay contractually agreed amounts. However, as noted below, the Employer should consider discussing with employees about receiving a reduced salary, not to be lower than the applicable regional minimum wage (with no work duties to be performed).  If the alternative is the (lawful) right to unilaterally terminate employment, this may be an attractive option for affected employees. In other words, employees may be motivated to agree on the reduction (accept Employer’s proposal) because, if they do not, the Employer would have legal grounds to unilaterally terminate employment as a result of epidemic (subject to the generally-applicable 30 and 45-day advance notice requirement for definite and indefinite-term labor contracts respectively).

For your information, according to Government Decree 90/2019/ND-CP, almost all of the districts of Hanoi and Ho Chi Minh Cities fall within Region 1 and the applicable regional minimum wage for 2020 is: (a) VND 4,420,000 per month for un-trained employees; and (b) VND 4,729,400 per month (i.e. an additional 7%) for trained employees.  This is approximately US$192 and $205 respectively. The minimum wage of other regions throughout the country would be a bit lower than that of Region 1.

Bottom line, despite the current laws, there might be a strong possibility that further ad-hoc regulation or policy may be issued by the Government that will affect the current status quo at law.  We will endeavor to keep you informed of any developments.

  1. Government’s guidance/ comments / indication recently about the current situation

As noted, the situation is complex and fluid.  It is quite likely that the Government will issue further policy/ regulatory guidance that will impact the current position outlined above.  At this moment, the main item of note is that the Prime Minister released the Directive No.11/CT-TTg on 04 March 2020 giving instructions to relevant agencies as outlined below.  While this is very general, it provides an indication of how things may develop so we provide it here FYI along with some initial comments.

 

  AGENCY ASSIGNMENT DM’S COMMENTS
1. Ministry of Labor (MOLISA) (i) To report on the labor and employment status in the enterprise;

 

(ii) To diversify methods of propaganda and solutions to motivate employees’ morale;

 

(iii) To support employees whose employments are terminated due to the influence of Covid-19;

 

(iv) To monitor the expat employees who come from the epidemic regions or pass by the epidemic regions; and

 

(v) to stop issuing new work permits for expat employee in a certain duration, then the Vietnam-based enterprise should be proactive to seek for alternative local employees to play roles of expat experts.

 

Item # (iii) recognizes the fact that epidemic is a legal basis for unilateral termination by Employers.
2. Vietnam Social Security To work with relevant authorities to provide guidance on temporary cessation of social insurance contributions for objects affected by Covid-19 until the end of June or December 2020, without calculating interest for late payment. Employers may be entitled to delay payment of social insurance contributions without being charged interest.

 

3. Vietnam Labor Federation To consider and guide the suitable time for collect trade union fees, so as to support enterprises affected by Covid-19. Employers may be entitled to delay payment of trade union fees.

 

 

For more information, please contact Giles at GTCooper@duanemorris.com or Le Nhan at NTLe@duanemorris.com or >any of the lawyers in our office listing. Giles is co-General Director of Duane Morris Vietnam LLC and branch director of Duane Morris’ HCMC office.