LEGAL FRAMEWORK LABOUR RELATIONS IN THE TIME AFFECTED BY COVID – 19 PANDEMIC

In the context of current widespread outbreak of the Covid-19 pandemic, what should Employer – Employee – State Agency do to (a) balance of interests; and (b) ensure compliance with the law in a tripartite relationship? It is an urgent question that needs answering.

Labor Contract is considered as a binding connection in the antagonistic relationship between the Employer and the Employee. Although fragile, it is not easy to break when there is still a third party – the State Agency, with integrity and fairness, committing to properly handle the breaching party.

In fact, man will always act instinctively when facing with the problems not under common rules in universal. That’s the reason they allow themselves to “break the law” and think it’s appropriate. But chaos will be an inevitable consequence arising from the fact that personal interests have been placed over and above social norms and Laws. The applicable legal system is quite sufficient to regulate labor relations, even during the current period affected by the Covid pandemic, except for some regulations that need to be clarified in order to be uniformly applied on a national scale, not only individually to each locality, specifically,

(i) Regarding wages:

• According to Article 99.3 of the Labor Code and the latest Official Letter 264/QLLDTL – TL dated 15 July 2021 of the MOLISA, it specifies that if the Employee cannot come to work due to (a) being isolated; (b) blockade of his/her place of work/residence, the two parties shall reach agreement on wages paid in case of work suspension but not lower than the minimum wage level for the first fourteen (14) days. Although it is not clear but can be understood that the Employer has the right to decide the wages to be paid (even not paying) for the subsequent period of work suspension (ie from the 15^th onwards) due to force majeure event (being an event which occurs in an objective manner which is not able to be foreseen and which is not able to be remedied by all possible necessary and admissible measures being taken – Article 156.2 of the Civil Code) and is not considered as a breach of the Labor Contract because “Where an obligor is not able to perform a civil obligation due to an event of force majeure, it shall not have civil liability, unless otherwise agreed or otherwise provided by law” – Article 351.2 of the Civil Code;
• If the Employer decides to work from home (WFH), this is considered an ADJUSTMENT TO THE LABOR CONTRACT according to Article 33 of the Labor Code (In case the Employee refuses to WFH but cannot come to the workplace, he/she will be paid according to Article 99.3 of the Labor Code). Why so? It will be easy to see that the WORKPLACE has changed compared to the Labor Contract (Article 3.3.b of the Circular 10/2020/TT-BLDTBXH). In order to ensure the compliance in case of WFH, the Employer should issue a regulation to be signed and agreed by the Employees, or directly sign a mutual agreement with each Employee with the following contents: (a) Whether wages remain unchanged or adjusted; (b) How to manage compliance with working time; (c) Obligations to pay for incidental expenses such as electricity/ water/ telephone/ internet fees; (d) Exclusion of liability related to occupational safety; (e) Agreement on that the online/ email transaction method is considered to work face-to-face so as not to violate regulations requiring face-to-face participation (such as meeting to handle labor discipline – Article 70.3 of Decree 145/2020/ND-CP);
• With the model of “03 on the spot“ mentioned in the Official Letter 2242/LDTBXH-TLD-PTM dated 14 July 2021, it should be seen that THIS IS ONLY A METHOD OF AGREEMENT FOR ADJUSTMENT TO THE LABOR CONTRACT guided and encouraged by the State Agency to the parties to implement, not a mandatory regulation. The Employee therefore has the right to refuse to come the Company to work and live there due to many factors arising (See also: A sensitive situation with human resource management – the Saigon Times dated 11 July 2021 by Phan Thi Ngoc Thang.) and the Employer is required to pay wages according to Article 99.3 of the Labor Code as guided in the Official Letter 1386/BQLKKT-QLLD dated 13 July 2021 of Tay Ninh Economic Zone Management Board.

(ii) Regarding the compulsory insurance regime:

• According to Article 42.8 of the Decision 595/QD-BHXH dated 14 April 2017, it provides that “If an employee who stops working in accordance with regulations of law on labor still receives wage, he/she or his/her employer shall pay insurance contributions and premiums according the monthly wage received by the employee during the stopping period”. In detail, the Employer needs to implement the procedure on adjustment of the wage to pay the compulsory insurance premiums according to the wage actually paid in accordance with Article 99.3 of the Labor Code, or make a notification of decrease in payment of the compulsory insurance premiums if no wages will be paid after fourteen (14) days;
• The shortcoming that needs guidance from the MOLISA/Vietnam Social Security is that if the Employer pays half a month’s wage according to the Labor Contract and half a month’s wage according to Article 99.3 of the Labor Code, is it required to make a notification of adjustment of the social insurance contribution rate?
• During the Labor Contract, if the Employee is sick or has to be tested, these fees will be paid according to the Official Letter No. 5378/BYT-KHTC dated 07 July 2021;
• In addition, the Employer is also considered to be supported according to the Government’s policy under the Resolution 68/NQ-CP dated 01 July 2021 and specifically guided by the Decision 23/2021/QD-TTg dated 07 July 2021 and the Official Letter 1988/BHXH-TST dated 08 July 2021 of Vietnam Social Security, including the following policies: (a) the Employer is entitled to a premium rate of 0% of the wage fund as the basis for paying social insurance premiums to the Insurance Fund for Occupational Accidents and Diseases for 12 months (from 01 July 2021 to 30 June 2022). Accordingly, the Employer will provide the monetary support obtained from the reduction in premiums to the Insurance fund for occupational accidents and diseases for the Employees in order to combat the COVID-19 pandemic, but it does not specify how to provide such support? Whether put into the wage fund to pay as wage or pay it as a non-wage support? Or buy anti-epidemic masks/alcohol? (b) the Employee and the Employer are entitled to a 6-month suspension of payment to the retirement and survivorship fund from the date of application submission (being required to meet the criteria as guided), (c) the Employer is entitled to a financial support from the Unemployment Insurance Fund for training, retraining and skill enhancement with the maximum monthly assistance of VND1,500,000 per employee and with a maximum support term of six months (being required to meet the criteria as guided).

(iii) When it is impossible to contiue the Labor Contract:

• In general, the Employee’s rights seem to be better protected under the Labor Code (e.g. the Employer still have to pay wages in case of a suspension of work under Article 93.3 of the Labor Code). However, in case of the Covid epidemic (force majeure), the Employer is entitled to apply Article 36.1.c or Article 42 of the Labor Code to legally terminate the Labor Contract;
• Please kindly be noted that according to Article 36.1.c, it mentions an “obscure” phrase – “having taken every possible remedial measure” but no further instructions until 25 March 2020, according to the Official Letter 1064/LDTBXH-QLLDTL, the Employer is entitled to (a) temporarily assign the Employees to performs jobs other than those stated in the Labor Contracts in accordance with Article 29 of the Labor Code; (b) In case the Employer is unable to pay the suspended Employees due to prolonged work suspension, they may reach an agreement on suspension of the Labor Contracts in accordance with Article 30 of the Labor Code; (c) the Employer that has to scale down leading to job reduction shall make the labor arrangement according to Article 36 or Article 42 of the Labor Code. We all are glad that after more than 25 years (the provisions of Article 36.1.c were recorded in Article 38.1.c of the Labor Code 1994, effective from 01 January 1995), the MOLISA has just issued a guidance but it has also led to a lot of legal controversy over the fact that the Official Letter 1064/LDTBXH-QLLDTL guides (explains) the Law when this function should belong to the National Assembly Standing Committee (according to Article 3.3 of Law on Promulgation of Legislative Documents). The question is that if the Employer does not comply with the Official Letter 1064/LDTBXH-QLLDTL, does the Court have the right to conclude that the Employer unilaterally terminates the Labor Contract illegally? It is necessary to have an answer from the State Agencies.
• For the situation where Article 42 is applied, a Labor Utilization Plan needs developing in accordance with Article 44 of the Labor Code and it may cause difficulties for the Employers who do not have a Grassroots-Level Employees’ Representative Organization because they do not know whether they are required to consult all Employees or not? The MOLISA should provide guidance on this content soon;
• In addition, when Article 36.1.c or Article 42 of the Labor Code is applied, it is necessary to comply with the provisions of solving “consequences” relating to severance allowance and job-loss allowance according to Article 8 of Decree 145/2020/ND-CP;
• Under the Resolution 68/NQ-CP and its guiding documents, it also provide categories of support in this situation including (a) the Employee will be entitled to a lump-sum support at the rate of VND1,855,000 per person for labor contract suspension or unpaid leave ranging from 15 consecutive days to less than 01 month; and VND3,710,000 per person for labor contract suspension or unpaid leave of 01 month or more; (b) the Employee will be entitled to a lump-sum support of VND1,000,000 per person if he/she has worked under the Labor Contract and has to suspend working under Article 99.3 of the Labor Code and subject to medical quarantine or isolated in lockdown areas at the request of competent State Agencies within fourteen (14) days or more during the period from 01 May 2021 to the end of 31 December 2021; and he/she has contributed to compulsory social insurance up to the time of work suspension; (c) the Employee will be entitled to a lump-sum support of VND3,710,000 per person if he/she has to terminate the Labor Contract due to the Employer temporarily ceases operations at the request of competent State Agencies for the prevention and control of the COVID-19 pandemic during the period from 01 May 2021 to the end of 31 December 2021, and he/she has contributed to compulsory social insurance but is not eligible for unemployment benefits; and (d) Additional support and assistance to children.

Whatever happens, the Law is the Law, and it needs to be enforced. There is such a new bring true equality because everyone has their own reasons for mistakes. We hope that with the contribution of this article, the Employer and Employee can choose the most possible and optimal solution to harmonize the interests of the parties.

Saigon, 05 August 2021,

Lawyer Tran Van Tri – FUJILAW.