Question 124: Pursuant to Article 42 of the Labor Code, Employers must accept Employees back to work if they unilaterally terminate LCs against labour law. So, if Employers no longer have the jobs as agreed in LCs and the two parties cannot agree on new jobs with new salaries, what can Employers do in this situation?

Pursuant to Article 42.2 of the Labor Code, if there is no longer the positions or the jobs as agreed in LCs but Employees still wish to work, in addition to the compensation as regulated, the two parties will negotiate to amend or supplement the LCs. Otherwise, the parties will continue to execute the signed LCs if they cannot reach an agreement on amending or supplementing LCs[1]. Therefore, if the two parties cannot agree on new jobs with new salaries, then Employers must still allow Employees to execute the signed LCs.

During the time Employers cannot arrange the jobs as agreed in LCs, Employers may negotiate with Employees to terminate LCs pursuant to Article 36.3 of the Labor Code, or to temporarily suspend LCs pursuant to Articles 32 and 33 of the Labor Code.

If an agreement cannot be reached, Employers may exercise the right to allocate labour forces according to the needs of production and business to temporarily assign Employees to other jobs than those in LCs, but the duration of which cannot last longer than 60 cumulative working days in a year[2]. Of note, to resort to this measure, Employers must prescribe in the ILRs that Employers may temporarily assign Employees to jobs different than those in LCs due to the needs of production and business[3]. At the same time, Employers must ensure that Employees will receive new salaries for new jobs; if the new salaries are lower than the previous ones, the previous salaries will be maintained for 30 working days. The salary for the new job must be at least 85% of the previous salary but not lower than the regional minimum salary stipulated by the Government[4].

In addition, Employers may consider allowing Employees to stop working and pay out-of-work salaries with the reason that they do not have work to assign to Employees. Other than the causes of electricity, water, natural disasters, fires, epidemics, hostility, removal of operating locations at the request of competent state agencies or due to economic reasons, the Labor Code does not expressly prescribe other cases where Employers may allow Employees to stop working and the maximum out-of-work duration[5], but Employers are required to pay full salaries to Employees in case they do not have work to do due to Employers’ faults. The salary which serves as the basis for paying Employees during the out-of-work duration prescribed in Article 98.1 of the Labor Code is the one stated in LCs applicable when Employees must stop working and calculated according to the time-related salary payment methods.[6] In addition, during the time when Employees receive out-of-work salaries, Employees and Employers still have to pay compulsory insurance premiums according to the salaries that Employees receive during this time.[7] The application of the legal provision on allowing Employees to stop working in the circumstance above is also in line with the Law on enforcement of civil judgments. Accordingly, Employers must pay salaries to Employees during this out-of-work duration pursuant to the court judgment, counting from the date of the written request for judgment enforcement to the time Employees are back to work[8]

[1]Article 35 Labor Code

[2]Article 31 Labor Code

[3]Article 8 Decree 05/2015/NĐ-CP dated 12/01/2015

[4]Article 31.1 Labor Code

[5]Article 98 Labor Code

[6]Article 98.1 Labor Code and Article 26.1 Decree 05/2015/NĐ-CP

[7]Article 30.6 Circular 59/2015/TT-BLĐTBXH

[8]Article 121.3 Law on enforcement of civil judgments