Challenges of the 4.0 Technological Revolution in the Implementation of the Labour Code 2019

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Nguyen Huu Phuoc Esq. & Le Thi Minh Thu – Phuoc & Partners Law Company Limited

The advent of computers and the internet have led to great developments in the world of science and technology. Especially in the 4.0 technological revolution, the world is gradually more dependent on digital technology platforms that have been utilised for everyday life, most notably in managing work and the people of enterprises. Since the end of 2019, the Covid-19 pandemic has caused a global crisis in all aspects of social life and most countries have to apply social distance policies to diminish the pandemic’s effect. The majority of enterprises are the most affected when their economic interests and opportunities reduce or fade away, expose themselves to the risk of a short-term or even long-term shutdown in response to the pandemic. Under this situation, the question is whether it is possible to run a business where the operation of the business is still maintained while employees are not able to present at the workplaces, as usual, such possibility becomes more urgent than any time. Besides, digital technology in the 4.0 technological revolution also forms a premise for businesses to reform their management of the business, recruitment, and human resource. Now, by applying the platform’s support tools, businesses can recruit and manage employees via smartphones or computers without the need of direct contact.

An example set out in the framework of Vietnamese labour law is that in recent times, the employers can perform most of the steps in the recruitment process through smart devices and even conclude a labour contract with an employee in the form of an electronic data messages. The electronic data message is as valid as a written labour contract[1], according to the provisions of the Labour Code 2019 (“Labour Code 2019”). Previously, the Law on Electronic Transactions 2005 also affirmed the legal validity of an electronic data message as a message created, sent, received and stored by electronic means whose validity cannot be denied and has the same value as a written document, as an original [2]…. Therefore, although a bit late, this can be considered as an anticipation for the practical applicability of electronic data message in entering into a labour contract. Facing with such rapid transformation, nowadays, in order to make the recruitment process easier and more compact, labour contracts and other labour-related documents can be in the form of electronic data messages instead of paper and stored on the enterprise’s data systems, significantly reducing the printing, transporting and operating costs.

I. APPROACHING

Human resource management through supportive platforms of the 4.0 technological revolution has helped businesses overcome the crisis of the pandemic and the Government’s social distancing order, but this fast-changing and historically unprecedent trend of management isn’t fully covered by the law. Therefore, when switching from traditional methods to online working models through digital technology-assisted means (“online working model”), enterprises need to be aware of appropriate preventive measures to avoid negative consequences.

The prevailing labour law of Vietnam can not cover all the legal issues that arise when implementing the online working model, and many enterprises have never applied the form of working online before, so the application of a new way of working for most employees, to a certain extent, has confused the enterprises as they resort to relevant regulations covered by the labour law framework.

1.  Working location issues

The first legal issue to be mentioned is the change of the employees’ workplace from traditional workplaces such as offices, factories to working from homes or at other locations at their convenience.

Under the prevailing labour law, the employee’s working location shall be clearly stated in the labour contract, and if there are several working locations, they must also be stated in the labour contract[3]. Since working location is one of the indispensable contents of a labour contract, if there is any change to working location, the parties shall modify or supplement the labour contract accordingly. Therefore, the question arising in this case is that whether the parties shall enter into the annex to the labour contract or negotiate to work at home or other locations? And if not do so, will it be considered contrary to the labour law when the employers assign the employees to work out of the location specified in the labour contract?

Additionally, one of the main issues associated with the working location is the employees’ working conditions at the working places. At the working places, the employees are often equipped with the necessary working equipment and tools to perform the work as agreed upon in the labour contracts. So, when implementing the online working model at the employees’ home or other locations, the employees will be unequipped, indirectly resulting in the decline of working performance. Following that, one of the new points of the Labour Code 2019 is that it allows the employees to unilaterally terminate the labour contracts with the employers without notice in advance in case the employees are not arranged in accordance with the working conditions agreed in the labour contracts. Is it necessary for the employers in this situation to implement measures to arrange labour equipment and tools ensuring working conditions for the employees by their financial capacity?
2. Working time and rest time issues

As same as the regulations of the working location, the working time also needs to be clearly stated in the labour contract and internal labour regulations of the enterprises and must ensure that the employees’ normal working time shall not exceed 08 hours per day and 48 hours per week[4]. However, when turning to the online working model, it brought a significant change in the employees’ working time. Accordingly, working time becomes more flexible, the employees can change their working time without being bound by the prescribed working time and rest time when working at the workplaces. As long as when the employers request, the employees will be present in front of the computers or phone screens. However, under the lack of the direct presence at the workplace as well as the lack of time management by the managers of the enterprises, and depending on the nature of the employees’ work, they may have to work exceeding the number of working time as prescribed by the labour law OR work not enough hours as agreed in the labour contract. As a result, the employees will struggle to know whether their excess working time is considered as overtime and whether they will be paid a salary for such time, and the employers are also unable to apply labour discipline against the employees in case the employees fail to work as the number of hours agreed.

3. The level of working completion of the employees

When working under the online working model, the employees may feel more comfortable because they are not under the direct supervision of the employers in general and direct supervisors in particular and therefore their productivity can be improved. However, working from home or at other workplaces during the Covid-19 pandamic period can lead to a decrease in the employees’ level of working completion because there are many external factors at work, for example: (i) the employees are isolated from their colleagues and lack of the direct management from the managers; (ii) the employees can not concentrate on working since they have to share the space with their families or communities, or they have to fulfill the family demands; and (iii) being isolated from the normal workplaces where are equipped with the necessary equipment and tools and the support from the colleagues.

According to the normal working style, the employers have the right to unilaterally terminate the labour contracts with the employees if it can be proven that the employees have not achieved the level of working completion as agreed in the labour contract and policy to evaluate the employees’ level of working completion issued. However, the online working model has put the employers in a difficult position in evaluating the employees’ level of working completion, which can be used as a legal basis for applying the right to unilaterally terminate the labour contracts against the employees in accordance with the law.

4.                   Applying labour discipline

Under the prevailing labour laws, the application of labour discipline on the employees shall strictly regulate in the enterprises’ internal labour regulations legally enacted and registered at the competent labour management State authorities. The employees’ violations of which labour discipline is handled and its process must be specified in the enterprises’ internal labour regulations. When working under the normal working style, it is tough for applying labour discipline against the employees in the practice, since even though the employers have the convincing evidence to prove the employees’ violations, if only small errors in terms of the process, the employers are also at risk of being concluded by the Court or the competent labour management authorities that the handling of the labour discipline is not in accordance with the law.

Facing with that changes in the employees’ working time and locations while working from home, it is very difficult for the employers to detect the employees’ labour discipline violations and these violations are also a difficult verification because it is not committed at the workplace so that the employers can detect it red-handed. A small illustrative example of this case is that the enterprises’ prohibition on smoking at work during the working time can not be implemented since the employees commit this behaviour while working at the employees’ home or a coffee shop, and if the employees’ home or the coffee shop is now considered as the workplace, the employees have violated the enterprises’ internal labour regulations.

Another obstacle is how to apply the process of handling the labour discipline properly in case the employees are working online at home or at another workplace. Currently, in order to handle the labour discipline against the employees, the employers need to go through a strict procedure by making a record of violation, sending invitations to the participants of the meeting to handle the labour discipline, processing and make minutes of the meeting to handle labour discipline. Therefore, when applying the model of working from home, making a record of the employees’ violations will encounter obstacles. Does the labour laws recognise that making a record of the employees’ violations and issuing minutes for a meeting of handling labour discipline via email can be conducted in the form of an electronic data message? Is the meeting of handling the labour discipline allowed to held online through supportive applications such as Team, Zoom?

5.                Protecting trade secrets, technology secrets

When the employees work through the working online model by supporting platforms in the 4.0 technological revolution as above-mentioned, instead of storing documents on the data system or storing hard-copy files at the workplace, the employees are allowed to use this information through their personal devices and sometimes they use the internet for free from new workplaces as selected by themselves, and in the absence of the employers’ strict management at that new workplace, the risks of safety and confidentiality of trade and technological secrets of the enterprises also need the attention from the employers and the employees. It is difficult for the employers to effectively manage their information regarding trade technology secrets and such information can be disclosed accidentally or intentionally by the employees through the use of applications.

II. MEASURES FOR THE ENTERPRISES

As aforementioned, the scientific and technological platforms have supported the employers and the employees a new way to overcome the difficulties caused by the Covid-19 pandamic such as the flexible working time, to enhance the employees’ efficiency and productivity as well as reduce the enterprises’ operating costs and the employees’ transport costs. However, there are many legal issues raised in the framework of Vietnamese labour laws that the employers need to adapt under the situation that Vietnam’s labour laws and its legal instruments are still not able to anticipate this new trend to have regulations to copy accordingly.

Furthermore, as above-mentioned, the application of a new working method will fundamentally change the terms of the signed labour contract and other internal policies of the enterprises. However, it is unnecessary to sign an annex or even a new agreement with each employee only for the implementation of the labour contracts in the new situation. Because doing so would take a lot of time and effort of Human Resources Department, while new contents cannot accommodate for and cover all situations and progress occurring in reality. If that is the case, the parties eventually have to sign another annex to the labour contract for every change.

According to the prevailing Vietnamese labour laws, the employers can issue internal policies related to a specific issue to be implemented within the enterprises and the employees through the representative organisation of the employees at the grassroots level, the employees have the right to comment on the promulgation of those policies[5]. Therefore, the enterprises should develop and enact an internal policy on working from home (“Policy on working from home“) to provide instructions for online working models, clarifying the employees’ violations of the internal labour regulations and the handling measures for such violations. It should be noted that the Policy on working from home must cover the following main contents:

•              Firstly, as for the regulations on the workplaces of the employees, the employers need to clearly instruct where are considered as the new workplaces. For example, the employees’ home is the only place allowed by the employers to implement an online working model. If the employees voluntarily work at another workplaces such as his or her parent’s house or a coffee shop or fitness centre as the employees’ choices, the legal issues related to occupational safety, labour accidents arising during the working time will not be responsible for the employers. In addition, because the current provisions of the Law on Social Insurance and Health Insurance have not fully anticipated the circumstances under this new model of working, the enterprises should send a written consultation to the competent local management authorities to ask about the insurance obligations in the event of an accident occurred under the situation that the employees work at the new workplace to consider the implementation of this new working model.

•              Secondly, with respect to the regulations on working time, the employers can manage the employees by targeted objectives instead of by time at the moment. This means that instead of working under 08 hours per day as usual, the employers can substitute by setting certain goals for each employee according to each specific nature of work and setting deadlines to complete this certain goals, so that the employees can complete the work during that period. If that is the case, the employers will not be required to pay overtime salary to the employees and the employees can also be more flexible in proactively arranging their time to fulfill the work in the best way at a certain time. Moreover, the employers also need to specify in Policy on working from home that the enterprises will not be responsible for injuries and accidents occurring at home or other workplaces that are not within the scope of work, working time or accidents resulting from their household chores and other accidents of their family members. In addition, the employers also need to stipulate the employees’ responsibility on notifying when occupational accidents occur and these notifications must be quickly and promptly.

•              Thirdly, regarding the evaluation of the employees’ level of working completion, the employers need to develop and enact a policy to evaluate the level of working completion for each working position, specific department to be able to apply it effectively in practice. In addition to being the basis for evaluating the employees’ level of working completion, it is also a legal basis for the employers to implement the right to unilaterally terminate the labour contract legally in case the employees fail to fulfill the assigned tasks effectively.

•              Fourthly, once the Policy on working from home has been issued, the employers will have a stronger legal basis to consider and handle the labour discipline for violating employees. In order to do so, the employers need to determine both which behaviours will be considered to be in violation of the Policy on working from home and regulations on the handling of such behaviours of the enterprises.

Regarding the process of handling the labour discipline, the employers must follow the order and procedures as prescribed by the labour laws. In particular, for the meeting to handle the labour discipline, the employers can send invitations via email to required participants and organise online meetings. After the meeting is finished, the meeting minutes must be made in writing in the form of an electronic data message and must be sent to all participants to sign with their digital signatures. It should also be noted that only authenticated electronic signatures of digital signatures are legally valid in this case.

•              Fifthly, in the matter of protecting trade and technology secrets, in addition to promulgating measures to instruct the employees to comply with to ensure confidentiality of information, for example, the employees are only allowed to use equipment, working tools provided by the enterprises instead of using their personal computers, the employers must also issue regulations on handling and compensating for damage if the enterprises’ safety of trade and technology secrets is threatened due to the employees’ fault when they do not follow the employers’ instructions, likewise the case where the employees disclose such confidential information.

•              Finally, in order to ensure that the Policy on working from home guarantees the rights and interests of both the employers and the employees, the employers need to issue a reporting system for accidents or injuries occurred while implementing an online working model. In addition, the employers also need to determine what dangerous signs that the employers suppose to be responsible for the employees’ accidents and injuries. The employers also need to stipulate that the employers will be the party that provides the employees with the necessary labour equipment and tools in order for the employees to work at the employees’ house or other workplaces agreed upon, such as a computer installed business management and working software, or other office assistive devices purchased by the enterprises from third parties. As for the employees, they must be responsible for the maintenance and preservation of these labour equipment and tools when using them outside the enterprises’ workplaces.


[1] Article 14 of the Labour Code 2019

[2] Article 2.12, 11, 12, 13 of Law on Electronic Transactions on 2005

[3] Article 3.3.b of Circular 10/2020/TT-BLDTBXH

[4] Article 108.1 of the Labour Code 2019

[5] Article 44.1.a of the Circular 145/2020/ND-CP regulates that the employees have the right to comment on the establishment, modification and supplementation of internal regulations, policies and other different documents of the employers in connection with the employees’ rights, obligations and interests.