Termination of Employment Contracts in Vietnam Due to Economic Reasons

Termination of a labor contract is an event that terminates the employment relationship between the employee and the employer. In particular, there are many cases of termination of labor contracts such as the labor contract expires, the work stated in the labor contract has been completed, both parties agree to terminate the labor contract, the employer lays off the employee due to structural or technological changes or because of economic reasons, merger, consolidation or division of the enterprise or cooperative,…

 

In case more than one employee face the risk of unemployment for economic reasons, the employer shall propose and implement a labor utilization plan in accordance with labour code. Specifically, the labor utilization plan must contain the following main contents: list and number of employees who continue to be employed, employees sent for re-training to continue using; list and number of retired employees; list and number of employees transferred to work part-time; employees must terminate labor contracts and measures and financial sources to ensure the implementation of the plan.

In case the employer cannot employ and have to dismiss employees, the employer shall pay job-loss allowances to the employees. Accordingly, the employer shall pay a job-loss allowance to an employee who loses his/her job and has worked regularly for the employer for 12 months or longer. The job-loss allowance is equal to 1 month’s wage for each working year, but must not be lower than 2 months’ wage.

The working period used for the calculation of job-loss allowance is the total time during which the employee actually works for the employer minus the time during which the employee benefits from unemployment insurance in accordance with the Law of Social Insurance and the working period for which the employer has paid a severance allowance to the employee. The wage used for the calculation of job-loss allowance is the average wage in accordance with the labor contract during 6 months preceding the time the employee loses his/her job.

The dismissal of more than one employee in accordance with this regulation may be implemented only after discussion with the representative organization of the grassroots-level employees’ collective and notification 30 days in advance to the provincial-level state management agency of labor.

It is important for the employer to consult with dispute lawyers in Vietnam specializing in labour matters for the avoidance of potential dispute with the employee, and cause negative social impact when deciding to terminate contract due to economic reasons.

ANT Lawyers - An Employment dispute law firm in Vietnam, recognized by Legal500, IFLR1000. We are an exclusive Vietnam member of Prea Legal, the global law firm network covering more than 150 jurisdictions. The firm provides a range of legal services to multinational and domestic clients. For advice or services request, please contact us via email ant@antlawyers.vn     

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When a Contract is Invalid Due to Non-compliance With Form in Vietnam?

Generally, contracts for sale and purchase of goods and service contract shall be expressed in verbal or written form or established with specific acts. For types of contract which must be made in writing provided by law, such contract must comply with such form regulation. Particularly, contract for international purchase and sale of goods shall be conducted on the basis of written contracts or other forms of equal legal validity.

Contract dispute law firm in Vietnam

There are two cases of non-compliance with form: (i) form of contract is not in accordance with the law and; (ii) contract violates against regulations on notarizing or authorization. It should be noted that the form of contract shall be the conditions for its effectiveness in cases where it is provided by law. The time limit of requiring the court to declare a contract of non-compliance with form in Vietnam invalid is 02 years, from the establishment date of contract. After such time limit, if there is still no request for declaring contract invalid, such contract still remains valid.

When the contract is invalid, the general rule is restoring everything to its original state and returning to each other what have received. The non-compliance with form contract could be valid de facto contract if recognized by the Court’s decision when one party or the parties has fulfill at least two third of the obligation contract. Obligations means work whereby one or more entities must transfer objects, rights, pay money or provide valuable papers, perform or not perform certain work for the interests of one or more other entities. However, one party or the parties fulfilling at least two third of the obligation contract will not naturally make such contract valid unless there is decision of the the Court to recognize such. Specifically, according to request of one party, after fully considering conditions mentioned above, the Court shall make a decision on recognizing the validity of such contract.

It is important for parties to have a proper contract with terms and conditions that provide sufficient details with consideration of the nature of the business transactions and the possible resolution when potential disputes arise.  Further, the law governing the contract and the dispute resolution clause which refers to court or arbitration choice should be as clear as possible to avoid confusion and extended time resolving the arisen disputes.

ANT Lawyers - A Contract dispute law firm in Vietnam with international standard, local expertise and strong international network. We focus on customers’ needs and provide clients with a high quality legal advice and services. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.     

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Prepare Application for Anti-dumping Review in Vietnam

 How to Prepare Application for Anti-dumping Review in Vietnam?

The review of anti-dumping measures on imported goods will be conducted by Vietnam Competition Authority  (VCA) 12 month from the decision by Ministry of Trade and Commerce is issued.

Application dossiers requesting for review of imposition of anti-dumping measures shall including (i) Application and (ii) Other documents and information deemed necessary by the requesting party, in Public and Limited version to be submitted to VCA.

The followings information must be provided by the requesting party at the submission of application for review of the anti-dumping duty imposition:

1.The status of dumping of imports

This section focuses on the change in the dumping status of imports into Vietnam during the period from the imposition of anti-dumping duty to the time the applicant submits the application.

The information to be provided includes, but is not limited to, expanding / narrowing the scope of the goods subject to the imposition of anti-dumping measures; Type / type of goods, producer / exporter selected to calculate the change in dumping margin, change in margin of dumping, normal price, export price for one or a group of foreign producers/ exporter (Note: The method of calculating the data must be consistent with the methodology which the VCA has guided in the dossier requesting the application of anti-dumping measures.)

2.Material damages or threaten to material damages

This section identifies evidence of substantial damages / threat of material damages to the domestic industry caused by imported goods dumped into Vietnam for investigation by the VCA, decide according to the actual situation.

Requesting party should provide the following information:

-The situation of importing goods

Information and data on the situation of import of goods subject to anti-dumping measures (amount and value) from the date of application of the anti-dumping measure before the submission of the dossier according to the set form and two (02) years earlier.

-Market share of similar goods domestically produced and imported goods

Comparative information on market share of domestically produced and imported goods shall be subject to dumping from the time of imposition of tax prior to the filing of the application in the form and the previous two (02) years.

-Impact of imports on domestic prices

Information on the impact of imported goods on the prices of domestically produced goods from the time of imposition of tax prior to the submission of dossiers according to the set form and two (02) years earlier.

-The situation of production and business activities of the domestic manufacturing industry

Information on production and business activities of the manufacturing industry from the date of application of the tax prior to the date of application and two (2) years before.

-Invest in upgrading machines and infrastructure to meet domestic demand

Information on fundamental changes in machinery and factory infrastructure is related to changes in capacity and capacity to meet the needs of the Vietnamese market from the time of application of the tax before submission and two (02) years earlier of the domestic industry. Data should be shown in the following table:

-Current situation of employers in the domestic industry

Number of employees (or estimated number) engaged in the production, management and distribution of domestically produced goods subject of the investigation.

-Inventory fluctuations

The amount and value of inventory requested for the application of the measure anti- dumping domestic production.

3.Scope of goods subject to anti-dumping measures

-Purpose, reason for requesting exclusion of products imported by the company from the scope of application of anti-dumping measures.

-Information on products the company proposes to exclude from the scope of application of anti-dumping measures: HS code, technical specifications, technology, use purpose, production process, …

-The list of domestic enterprises producing the same products as the imported products of the company.

List of other importing enterprises jointly importing the company’s proposed goods for exclusion.

-Documents indicating the difference between the company’s products proposed exclusion and similar products domestically produced. If there are quality comparisons, please indicate the source of these quality criteria (e.g.Vietnamese standards sets, internationally recognized standards …).

-Information on alternative sources of imports, the difference between those sources.

-Other information, documents and evidence that the company deems appropriate to explain the exclusion of the product is appropriate.

If Client needs any more information or request for legal advice or potential dispute regarding trade remedies measures including, anti-dumping, countervailing duty and safeguard measures or international trade dispute matters, our competition, anti-dumping, and countervailing duty lawyers in Vietnam of International trade and tax practice at ANT Lawyers, a law firm in Vietnam always follow up anti-dumping cases and its development to update clients on regular basis.    

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Conditions for Cancellation of Contract in Vietnam

What are Conditions for Cancellation of Contract?

When entering into a contract, the parties in a contractual relationship always aim for certain interests and purposes. However, in reality, the contract is not always implemented seriously and in good faith. According to Vietnam laws, parties are entitled to cancel the contract to protect rights and interests. Therefore, it is not rare for a party to request to cancel the contract in order not to be bound by the contract. However, it should be noted that the right of cancellation is only applied in some certain circumstances which stipulated by the law. This is to limit arbitrariness of cancelling the contract.

 

 Contract dispute law firm in Vietnam

The basic condition for cancelling the contract is the breach. However, it should be noted that not all breaches of contract will result in cancelling the contract. This is stipulated in both of general law and specialized law. According to Commercial law 2005 (“CL”), the sanction of cancelling the contract is applied in case of breaching act be a condition for the cancellation of the contract as agreed upon by the parties or in case of substantial breach of contractual obligations from a party. Specifically, contractual breach means the failure of a party to perform, to fully or properly perform its obligations according to the agreement between the parties or the provisions of CL. Substantial breach means a contractual breach by a party, which causes damage to the other party to an extent that the other party cannot achieve the purpose of the entry into the contract. Civil Code 2015 (“CC”) also stipulates correspondingly but it uses the term “serious breach”: “A party has the right to cancel the contract and shall not be liable to compensate for damage in the following cases: (i) A breaching act of one party is a condition for the cancellation of the contract as agreed upon by the parties; (ii) The other party seriously violates the obligations in the contract; (iii) Others circumstances as provided by law. Serious violation means the failure to fulfill obligations properly by a party which make the other party cannot achieve the purpose of the entry into the contract”. However, currently there is no specific guidance on identifying the substantial breach of contractual obligations and the serious breach of contractual obligations. Therefore, determining whether a party’s breach is considered as a substantial breach of contractual obligations or a serious breach of contractual obligations will be within the competence of the jurisdiction.

A lawfully concluded contract may be canceled when a party breaches its basic contractual obligations. After cancelling the contract, such contract shall be invalid from the time it is entered into, and the parties shall not have to continue performing their contractual obligations, except for their agreements on their post-cancellation rights and obligations and resolution of disputes. The parties shall have the right to claim benefits brought about their performance of their contractual obligations. If parties have indemnity obligations, their obligations must be performed concurrently. Where it is impossible to make the indemnity with benefits which one party has enjoyed, the obliged party must make the indemnity in cash. Breached parties are entitled to claim damages.

In conclusion, from the regulation of law, it can be seen that nature of contract is to benefit for the parties and not to be canceled. The cancellation is very serious so the contract can only be canceled in some certain conditions. The contract cannot be canceled as a sanction if there is no contract breach. Simultaneously, the party requesting cancellation also needs to know that such request is only accepted if there is enough foundation to affirm that the other party has substantial breach of contractual obligations or the serious breach of contractual obligations.  Parties encountering potential dispute should consult with dispute lawyers in Vietnam for proper resolution.

ANT Lawyers – A Law firm in Vietnam has law offices in Hanoi, Ho Chi Minh City and Da Nang. The lawyers at each law offices in Vietnam have consistently made valuable and important contributions to our profession through the cases we handled on daily basis to facilitate business transaction or represented our clients to access justice      

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What Are Procedures for Postponement at the First Instance Court?

In case that civil lawsuit cannot be mediated or cannot conduct the mediation, the Judge shall hold the meetings for checking the handover, access, disclosure of evidences and mediation. In cases there are many parties in a case and some of them are absent but present parties agree to conduct the meetings and the conduct of the meeting does not affect rights and obligations of absent parties, the Judges shall conduct meeting between present parties. If parties request to postpone the mediation meeting until all parties attend, the Judge shall postpone the meeting. The Judges must notify postponement and re-open of meeting to the parties. The litigation dispute lawyers in Vietnam could be the best advisors to the client to utilize the procedures for the best interests of their client depending on the situation.

 Procedures for Postponement at the First Instance Court

In the first-instance court hearings, when being summoned duly the the Court for the first time, the parties or their representatives and defense counsels shall be present at the Court hearings. If any of them is absent, the Trial Panel shall postpone the Court hearings, unless such person requests for trial in his/her absence. The Courts must notify the postponement of the Court hearings to the parties, their representatives and defense counsels. When being summoned duly for the second time, parties or their representatives and defense counsels shall be present at the Court hearings unless they request for trials in their absence. If the absence is caused by a force majeure event or an objective obstacle, the Court may postpone the Court hearings, otherwise the Court shall handle as follows: (i) The absence of plaintiff without his/her representative shall be considered giving up the lawsuit initiation, thus the Court shall issue a decision to terminate the case resolution for his/her request for lawsuit initiation, unless such plaintiff requests for trials in their absence. The plaintiff may re-initiate lawsuits according to law provisions; (ii) If neither the defendant without counter-claims or a person with relevant interests and duties (relevant person) without independent claims nor his/her representative participates in the Court hearings, the Court shall conduct trial in their absence; (iii) If neither the defendant with counter-claims nor his/her representative participates in the Court hearings, such defendant shall be considered giving up the counter claims, thus the Court shall issue a decision to terminate the resolution for his/her counter claims, unless such defendant requests for trial in his/her absence. The defendant may re-initiate lawsuits for his/her counter-claims according to law provisions; (iv) If neither relevant person with independent claims nor his/her representative participates in the Court hearings, such person shall be considered giving up the independent claims, thus the Court shall issue a decision to terminate the resolution for his/her independent claims, unless such person requests for trial in his/her absence. Such person may re-initiate lawsuits for his/her independent claims according to law provisions; (v) If the defense counsels of the parties is absent, the Court shall conduct trial in their absence.

When the witnesses are absent, the Trial Panels shall decide to conduct trial or to postpone the court. The Trial Panels shall still conduct trial if the witnesses are absent but have earlier given their testimonies in person or sent their testimonies to courts. The presiding Judges shall make such testimonies public. The Trial Panels shall decide to postpone the Court hearings if the absence of the witnesses at Court creates difficulties or affects the objective and comprehensive resolution of the cases.

If the expert-witnesses are absent, the Trial Panels shall decide to conduct trial or to postpone the court. If the interpreters are absent without substitutes, the Trial Panels shall decide to postpone the Court hearings. If expert-witnesses or interpreters must be replaced, the Judges, the Trial panels or the Civil matter-resolving council shall issue decisions to postpone the Court hearings.

When any procedure participants are absent from Court hearings and it does not fall into the cases which the Courts must postpone the Court hearings, the presiding Judges must ask if there is any one requesting to postpone the Court hearings. If there is, the Trial Panels shall consider and decide to accept or not accept such request. In case of non-acceptance, the reasons must be clearly stated.

In addition to absence and change of procedure participants, the change of procedure-conducting person may make the Court hearings be postponed. Firstly, in case of change of the Judge, People’s Jurors, Ombudspersons, Court clerks, procurators, the Trial Panels shall issue decisions to postpone the Court hearings.

Decision on postponing the Court hearings in above circumstances is made by Trial Panels and the time limit for postponing shall not exceed 01 month or not exceed 15 days, applicable to Court carried out under simplified procedure, from the day on which the decision to postpone the Court session is issued.

Having said that, the client could rely on the litigation dispute lawyers in Vietnam for the solution in each case to protect the best interests if postponement procedures of the first instance trial could be applied.

We are a law firm in Vietnam with international standard, local expertise and strong international network. We focus on customers’ needs and provide clients with a high quality legal advice and services. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529     

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Labor contract under Labor Code 2019

How to Determine Labour Relationship under Labour Code 2019? 

During Covid pandemic, many companies face economic challenges that need to reduce the high paid workers’ cost. There are situations which dispute arisen and the employee started to realize that the contract he or she signs with the company he or she spends eight hours each day, follows instructions of work from supervisors, and receives monthly payment at the end of the month, seems to be a consulting contract on the face instead. Is this a consulting contract or a labour contract? It is suggested the disputants engage the dispute lawyers to help resolve the potential conflict or help provide legal opinions if a labor relationship is established or not.

 Labor contract under Labor Code 2019

A labour contract is essentially a civil transaction, whereby the employer and the employee enter into it on the basis of voluntarity, equality, goodwill, cooperation and honesty. According to the provisions of the Vietnam Labor Code 2019, “a labor contract is an agreement between an employee and an employer on a paid job, salary, working conditions, and the rights and obligations of each party in the labor relations”. In addition, the agreements which are not under the name of a labor contract but have content showing paid employment, salary and the management, administration and supervision of one party are considered as labor contracts.

An employee is allowed to enter into many labor contracts, but the employee must ensure compliance with signed contracts, this provision creates conditions allowing employees to use their full working capacity and have additional sources of income.

Contents of the labor contract must contain information about the employer and employee; Specific information about the job and workplace; Duration of the employment contract; Job- or position-based salary, form of salary payment, due date for payment of salary, allowances and other additional payments; Regimes for promotion and pay rise; Working hours, rest periods; Personal protective equipment for the employee; Social insurance, health insurance and unemployment insurance; Basic training and advanced training, occupational skill development, these are basic but very important contents that employees need to pay attention to negotiating closely and fully to ensure the interests of employees in the process of contract performance. Besides, depending on the job and job position, the employer and the employee can agree in writing on issues related to information confidentiality, however, the employer needs to pay attention to building an appropriate system of internal labor documents to ensure the practical and effective application of information confidentiality.

Regarding the probationary contract, Labor Code 2019 allows employees and employers to agree on the content of the probationary period in the labor contract itself or sign a separate probationary contract. The agreement on the content of the probationary period in the labor contract will cause some insurance obligations to the insurance agency, therefore, the employer and the employee need to carefully search relevant legal provisions in order to negotiate and agree on the contents of the labor contract to ensure compliance with the law and the rights and obligations of both parties.

In addition, in case the employee and the employer wish to amend, supplement or replace the agreed contents in the labor contract, the two parties sign an addendum to the labor contract to amend the respective contents. However, if the term of the labor contract is changed, the parties must agree to terminate the old labor contract and enter into a new labor contract. The labor contract appendix is ​​an integral part of the labor contract and has the same effect as the labor contract.

Employees as well as the labor collective and employers should pay attention to selecting the most appropriate and optimal resolution solution when labor disputes occur.  It is also suggested to consult with labour lawyers of Labour dispute law firm in Vietnam speacializing in employment matters for efficiency.    

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Termination of Labour Contract to Employee Before Contract Expiration

When Should the Employer Send Notice of Termination of Labour Contract to Employee Before Contract Expiration?

Expiration is one of the circumstances which permit termination of labor contract under the Labor Code 2012. Accordingly, the employer must inform in writing to the employee of the terminating date of labor contract at least 15 days prior to the expiration. Termination of labor relationship in each circumstance must follow different conditions and procedures to ensure the interests and obligations of both employee and employer and avoid potential labour disputes in Vietnam.

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Previously, an administrative penalty was applied to violations of the labor contract termination notice mentioned above. If the employer fails to inform the employee, the employer will be subject to a warning or a fine with amount from VND 500,000 to VND 1,000,000. However, the Decree 28/2020/ND-CP issued on March 1st, 2020 by the Government has repealed sanction for this behavior.

If the employee continues to work upon expiration of labor contract, both parties will be required to sign a new labor contract within the next 30 days, otherwise the signed contract will become an indefinite-term. Failure of the employer to inform the labor contract termination to the employee does not mean that the labor relationship is automatically extended after the expiration. If both parties fail to sign a new labor contract within the next 30 days, but the employee still do normal assigned job and is paid a full monthly salary, an indefinite-term labor contract is deemed as entered into by them. Any disputes arising out then will be settled based on provisions of indefinite term labor contract and laws.

The Labor Code 2019 repealed the employer’s informing responsibility upon expiration of labor contract except in a few circumstances such as the employee being sentenced to imprisonment, disciplined, expelled, ..., the employer is required to inform the employee in writing the termination of the labor contract.

ANT Lawyers – A labour dispute law firm in Vietnam with international standard, local expertise and strong international network. We focus on customers’ needs and provide clients with a high quality legal advice and services. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.     

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