Internal Labor Regulations (IRL) are a mandatory requirement under the Labor Law. Businesses with 10 or more employees must register their IRL with the Labor Authorities. However, this process can be a lengthy and challenging one, often taking months due to multiple revisions and adjustments.
Despite various causes, the common reason is the “Inconsistency of views between business and state agencies” and “Application of sanctions/other regulations not in accordance with the Law.” Let’s review the top reasons leading to adjustments when submitting IRL:
1. Working hours/rest hours/annual leave schedule are unclear
Many companies outline their standard work hours in internal regulations. However, errors frequently occur when these regulations lack specific details about working hours and weekend schedules. Additionally, regulations that allow for rotating breaks “to ensure work is not interrupted” are often rejected, particularly for jobs requiring fixed break times. The Labor Department carefully scrutinizes break regulations during the approval process to ensure compliance with labor laws.
In addition, some sets of regulations often make mistakes regarding the company’s annual leave schedule for employees.
2. Details in Code of Conduct of multinational companies are not consistent with Vietnam Labor Law
Many multinational companies enforce a global Code of Conduct (COC) that may conflict with Vietnamese labor laws in some areas. These companies will need to adjust their COC to comply with Vietnamese regulations.
3. Content of the termination decision for violations of the Code of Conduct/breach of trust that are not specific
Though not causing significant financial loss, some code of conduct violations can be severe enough to warrant dismissal in some businesses. However, the government’s perspective does not agree with this dismissal decision, because it has not proven the extent of possible dismissal under the Labor Law. The challenge for human resources executives is how to express the language in the labor regulations to ensure that employees understand that this behavior is not allowed.
4. Companies combining disciplinary measures
The disciplinary forms that are still commonly applied in the 2012 Labor Law are combined: Extending the salary increase period to no more than 6 months and Dismissal in the same form, while in the 2019 Labor Law, these two are being separated in Article 124.
5. Using “…” in the IRL
The use of placeholders (“…”) in internal regulations can create ambiguity, particularly when dealing with disciplinary actions. While intended for unforeseen circumstances, this approach lacks clarity and specificity for employees.
6. Different views on the reasons leading to job termination
There can be different views on when unfulfilled work commitment can lead to dismissal. However, termination of employment can be handled in two ways, one is due to violations leading to dismissal, or the other is due to failure to meet the job requirements leading to the companies unilaterally terminating the labor contract according to the Law.
7. Adjusting regulations that are not part of the Labor Law
There are a few labor management agencies that require the internal regulations to only focus on contents that comply with the provisions of the Labor Law in Article 118 of the Labor Law 2019. Regulations of other Laws such as Social Insurance and Taxation will be requested to be deleted, or just replaced with the sentence “According to current Law regulations”.
Due to the unique nature of each organization, various considerations arise when navigating local labor regulations. To streamline the process and establish a compliant labor code, businesses can leverage Talentnet’s compliance services. This leverages the extensive knowledge of our team of experts within the Vietnamese market.
To ensure a smooth submission process, here are six essential advice for HR teams to follow when submitting internal regulations to labor agencies:
- Consult with a lawyer or internal legal department to ensure that the Company’s internal regulations fully comply with the regulations, and do not include regulations that are inconsistent with Vietnam Labor Law.
- Ensure that the internal regulations have all the contents specified in Article 118 of the Labor Law 2019.
- Clear and unambiguous language is crucial when writing internal regulations. Complex or ambiguous wording can lead to rejection by state agencies during the review process, as they require regulations to be easily understood by all parties involved. To ensure smooth approval, ensure the regulations are written in a way that leaves no room for misinterpretation.
- For companies with a large unskilled workforce, like factory workers or delivery personnel, clearly outlining prohibited behaviors and corresponding disciplinary actions is crucial. This transparency simplifies the enforcement process when employee conduct violates internal regulations.
- When applying the highest form of disciplinary action, which is dismissal, the Company needs to pay attention to the actions when taking disciplinary action at this level. Normally, the labor agency will stand from the perspective of protecting the rights of employees. Therefore, it will only be accepted if it falls within the provisions of Article 125 of the Labor Law 2019.
- Note that the benefits of internal policies should not be expressed in the internal regulations, they should only be issued separately or included in the collective agreement. If the policy changes later, the internal regulations will have to be re-registered.
