Changes to rights and obligations of the employee and the employer under decree no.148/2018/ ND- CP

Decree 148/2018/ND-CP promulgated by the Government on 24 October 2018 (“Decree 148”) has significant changes, directly affecting rights and obligations of the employee (the “Employee”) and the employer (the “Employer”) in comparison with Decree 05/2015/ND-CP dated 12 January 2015 of the Government detailing and guiding a number of contents of the Labor Code (“Decree 05”). A number of new points of Decree 148 are set forth as below:

1. The representative authorized to enter into the employment contract is entitled to issue decisions on labor discipline

Pursuant to Article 1.1 of Decree 148, the person authorized to enter into the Employment Contract (the “Employment Contract”) will be considered the “person entering into the Employment Contract from the Employer’s side” and therefore, will be entitled to issue a decision on labor discipline in accordance with Article 1.12 of Decree 148.

2. A number of main contents of the Employment Contract are more simply stipulated

Instead of prescribing the clauses in details, the Employer can refer to the agreement between the Employee and the Employer, the internal labor regulations, the regulations of the Employer, the collective labor agreement and the statutory regulations when reaching agreement with the Employee about (i) promotion, salary increase; (ii) working time, rest time; (iii) equipment for labor protection; and (iv) insurance policies in the Employment Contract.

4. The probationary period is no more used for calculation of severance and job-loss allowances

Pursuant to Article 1.5 of Decree 148, the probationary period will not be considered the actual working period that the Employee works for the Employer and therefore will not be referred to for calculating severance and job-loss allowances.

5. The 30-day time limit for payment of all benefits when terminating the employment contract is only applicable in some specific cases

Under the regulations, the Employee and the Employer have responsibilities for settling all relevant benefits of each party within 07 working days from the termination of the Employment Contract.

The above payment term may be extended but must not exceed 30 days from the termination date of the Employment Contract in only a few special cases, including cases where (i) the Employer is not an individual terminating the operation; (ii) The Employer or Employee encounters natural disasters, fires, enemies or dangerous infectious diseases; or (iii) the Employer changes its structure, technology or economic reasons or merges, consolidates, splits, separates the enterprise or cooperative, transfers ownership and use rights.

6. Supplementing the regulation on reference salary for determining the damages due to the illegal termination of the Employment Contract

Accordingly, it is the salary prescribed in the Employment Contract at the time the Employer or the Employee illegally unilaterally terminates the Employment Contract.

Above are the significant changes of Decree 148. Decree 148 takes effect from 15 December 2018.