Question 66: What is the salary to which the Employer must refer to pay for the annual leave days that Employees have not taken?

508

As prescribed by labour law, for Employees who have worked for full 6 months and over, the salary serving as the basis to pay for the annual leave days that Employees have not taken is the average contract salary of the 6 preceding consecutive months prior to calculation of the payment for the Employees’ unused leave days. Labour law does not have any regulation to help determine if the month in which Employees resign is counted into the 6 preceding consecutive months or not in the case where Employees have worked for full 6 months and over. In a casual exchange with the DOLISA of Ho Chi Minh City, we were told that the month in which Employees resign is not counted into the 6 preceding consecutive months which will instead be counted from the month prior to the month when Employees resign backwards. For example: If Employees start their jobs from 01/01 and resign on 15/7, then the 06 preceding consecutive months will be June, May, April, March, February and January.

On the contrary, for Employees who have worked for less than 6 months, the salary serving as the basis to pay for the annual leave days that Employees have not taken is the average contract salary of the whole time when Employees worked for enterprises. In the case where Employees have not worked for one full month, as labour law does not provide a specific guideline on how to calculate the average salary, the guidance and interpretation of law will depend on the provincial labour management agency where the enterprise’s head office is based, or even on each officer handling the case. In the opinions of the DOLISA of Ho Chi Minh City, for the case where Employees have not worked for one full month, Employers may get an agreement from the Employees on whether the days they were at work in the month can be rounded to 1 month or not. However, from the perspective of labour law, as the labour management agency always prefers to protect Employees’ rights and interests maximally, and to minimise the legal risks of being considered as not paying salaries for the annual leave days that Employees have not taken, Employers should: (i) expressly provide for this issue in the ILRs which must be registered at the competent local labour management agency; or (ii) if the ILRs have not provided for this issue, Employers should agree in writing with Employees on it. In addition, Employers may consider calculating the average salary of the whole working time by the method using the daily wage for the days not making up a full month. In particular, the daily wage for 01 working day will be determined by dividing the monthly salary by the normal number of working days that is chosen by the enterprise as prescribed by law, but 26 days as a maximum[1].

[1]Article 4.4(c) Circular 23/2015/TT-BLĐTBXH dated 23/06/2015 as amended and supplemented by Article 14.4(a) Circular 47/2015/TT-BLĐTBXH dated 16/11/2015