HOW TO RESOLVE LABOR DISPUTES IN VIET NAM?

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1. What are Labor relation and Labor disputes?
2. What are some common Labor disputes in Vietnam?
3. What are the Principles for the resolution of Labor dispute in Vietnam?
4. What Methods are used to resolve Labor dispute in Vietnam?
5. What are the rights and obligations of employee and employer in Labor dispute in Vietnam?
6. How to Resolve Labor dispute in Vietnam?
7. Which Labor disputes in Vietnam are not required to go through mediation?
8. What are the court costs associated with resolving Labor dispute in Vietnam?
9. Why is hiring a Lawyer necessary in Labor disputes in Vietnam?
10. Phong & Partners Law Firm specializes in resolving Labor disputes in Vietnam

In the current context, the demand for labor among businesses is increasingly volatile, leading to inevitable labor disputes between employees and employers. However, have both parties truly understood the legal regulations and how to handle disputes when they arise? In this article, Phong & Partners will provide detailed answers to help readers grasp their rights and obligations, as well as guide them through the necessary steps to protect their interests when facing labor disputes.

1. What are Labor relation and Labor disputes?

Clause 5 Article 3 of the Labor Code 2019 stipulates: "Labor relations are social relations arising from the hiring, use of labor, and payment of wages between employees, employers, their representative organizations, and competent state agencies”.

Article 179 of the Labor Code 2019: “A labor dispute is a dispute regarding rights and obligations, and interests arising between the parties during the establishment, execution, or termination of a labor relation; disputes between organizations representing workers with each other; and disputes arising from relations directly related to labor relations”.

Labor disputes are classified into two types:

Individual Labor disputes: These occur between an employee and an employer; between an employee and an enterprise or organization sending the employee to work overseas under a contract; or between a sub-leasing employer and a sub-leased employee
Collective Labor disputes: These are based on a conflict of rights or interests between one or more representative organizations of employees and the employer or one or more organizations of the employer. The organization representing the collective of employees is typically a trade union that participates as one of the disputing parties, demanding that the employer fulfill the rights and interests established by the collective of workers.

2. What are some common Labor disputes in Vietnam?

Labor Contract Disputes: Related to the duration of contracts, contract content, rights and obligations related to employment contracts.
Labor Discipline Disputes: Related to the application of measures such as dismissal, salary reduction, demotion, or other disciplinary actions that employees do not agree with.
Wage Disputes: Related to basic salaries, bonuses, allowances, expectations for salary increases, payment issues or other financial matters.
Termination or Dismissal Disputes: Related to the reasons for terminating employment contracts, entitlements upon termination, and procedures for contract termination.
Labor health and Safety Disputes: Related to the measures to ensure workplace safety or health care at work.
Social insurance and Benefits Disputes: Related to the entitlements and contributions to social insurance programs, including leave policies, sick leave, maternity leave, social insurance, health insurance and unemployment insurance.
Working Hours and other Labor policy Disputes: Related to working hours, especially concerning overtime work, unsafe working conditions, and other labor policies.

3. What are the Principles for the resolution of Labor dispute in Vietnam?

According to Article 180 of the Labor Code 2019, when resolving labor disputes, the following principles must be adhered to:

Respect the right to self-determination through negotiation by the parties throughout the labor dispute resolution process.
Emphasize resolving labor disputes through mediation and arbitration based on respect for the rights and interests of both disputing parties, as well as the common interests of society, without violating the law.
Ensure transparency, objectivity, timeliness, efficiency, and legality.
Guarantee the participation of representatives from both sides in the labor dispute resolution process.
The resolution of labor disputes shall be conducted by competent agencies, organizations, or individuals after receiving requests from the disputing parties or upon the suggestion of competent agencies or organizations, with the agreement of both parties involved in the dispute.

4. What Methods are used to resolve Labor dispute in Vietnam?

Resolving labor disputes is an important issue that ensures the rights of both employees and employers. In Vietnam, various methods are employed to resolve labor disputes, ranging from mediation to legal action. Below are some common and effective methods:

Negotiation: This method involves the parties voluntarily discussing, agreeing upon, and resolving their differences without the assistance or judgment of any third party.

Advantages: It is a simple, quick, and cost-effective way to resolve disputes. Both parties achieve their objectives without confrontation, maintaining cooperative relationships.
Disadvantages: The outcome of the negotiation entirely depends on the willingness of each party, with no legal mechanisms to ensure the enforcement of agreements reached during the negotiation process

Mediation: This method involves a third party acting as a mediator—an experienced and reputable labor mediator designated by a competent labor authority

According to the Labor Code 2019, labor disputes must be resolved through the mediation process before requesting arbitration or court intervention, except for disputes exempted from mandatory mediation as outlined in Clause 1 Article 188 of the Labor Code 2019. Thus, labor mediation is considered a mandatory procedure in resolving labor disputes.

By Arbitration Councils: This method involves a designated third party making a binding decision regarding the resolution of the dispute. The arbitration council resolves labor disputes based on certain principles agreed upon by the disputing parties or as stipulated by law

Advantages: The arbitration procedure is convenient and quick, demonstrating simplicity and flexibility in legal proceedings. Parties can choose the time and place for dispute resolution and select arbitrators, thereby minimizing time and financial costs for the disputing parties.
Disadvantages: While arbitration decisions are binding on the parties involved in the dispute, the current Labor Code does not clearly define this aspect, leading to complications during implementation. Labor arbitration decisions lack enforcement mechanisms.

By the People’s Court: Resolving disputes through court involves state judicial authorities acting on behalf of state power, following strict procedures to issue judgments or decisions that compel compliance from both parties. Labor disputes that do not require preliminary mediation can be directly submitted to a competent court.

Advantages: Court resolutions have high coercive power; procedures are strict and ensure the enforceability of court decisions. As representatives of national sovereignty, courts are better equipped to conduct investigations compared to arbitrators; they also have the authority to enforce compliance and summon third parties to court for dispute resolution.
Disadvantages: Court procedures are specifically regulated by law, which may lead to inflexibility in some cases. If a court decision is appealed, proceedings may be delayed and extended, affecting the normal operations of the disputing parties.

5. What are the rights and obligations of employee and employer in Labor dispute in Vietnam?

According to Article 182 of the Labor Code 2019, the rights and obligations of employees and employers in resolving labor disputes are stipulated as follows:

Both parties have the right to:
- Participate directly or through a representative in the dispute resolution process.
- Withdraw their request or change its content.
- Request a change of the person responsible for resolving the labor dispute if there are grounds to believe they may not be impartial or objective.
Both parties have the obligations to:
- Provide complete and timely documentation and evidence supporting their requests.
- Comply with agreements reached, decisions made by Arbitration council, and Court judgments that have become final.

6. How to Resolve Labor dispute in Vietnam?

Although there is a classification between individual and collective labor disputes, the general order for resolving such disputes follows procedures regulated by both the Labor Code and Civil Procedure Code:

Authority for Resolution

According to Article 187 of the Labor Code 2019, the competent agencies, organizations, and individuals authorized to resolve labor disputes include:

Labor mediators;
Labor arbitration councils;
The People’s Court;

Procedures for resolving Labor Disputes

Step 1: Mediation at the workplace through a labor mediator (except for labor disputes that are not required to go through the mediation process)

Within five working days from the date the labor mediator receives a request from the party seeking dispute resolution or from the competent labor authority under the People's Committee, the labor mediator must conclude the mediation.
The parties may participate directly in the mediation session or authorize another person to participate.
If mediation fails or if one party does not comply with the agreements reached in the mediation record, the other party has the right to request resolution from the Labor arbitration council or the Court.
The time limit for requesting a labor mediator to mediate a labor dispute is 06 months from the date of discovering actions that the disputing party believes violate their legal rights and interests.

Step 2: Resolving labor disputes at the Labor Arbitration Council.

Within 07 working days from receiving a request for dispute resolution, the Labor Arbitration Council must be established to resolve the dispute.
Within 30 days from the establishment of the Labor Arbitration Council, it must issue a decision regarding the resolution of the dispute and send it to both parties involved.
The time limit for requesting the Labor Arbitration Council to resolve a labor dispute is 09 months from discovering actions that the disputing party believes violate their legal rights and interests.

Notes: When requesting the Labor Arbitration Council to resolve a dispute, parties cannot simultaneously request court intervention, except in the following cases:

The specified time limit has expired without establishing or issuing a resolution by the Labor Arbitration Council;
One of the parties does not comply with the resolution decision made by the Labor Arbitration Council;

Step 3: Resolving labor disputes in Court.

The requesting party prepares a dossier and initiates a lawsuit at a competent People's Court.
Resolution time frame: According to civil procedure laws, typically, resolution at first-instance trial level takes four to six months. However, depending on the nature and severity of each case, this time may vary based on actual developments.
The time limit for requesting court intervention in labor disputes is one year from discovering actions that violate their legal rights and interests.

7. Which Labor disputes in Vietnam are not required to go through mediation?

According to Clause 1 Article 188 of the Labor Code 2019, labor disputes that are not required to go through mediation include:

Disciplinary actions resulting in termination or unilateral termination of employment contracts;
Compensation claims upon contract termination;
Disputes between domestic workers and employers;
Social insurance matters as stipulated by social insurance laws, health insurance laws, unemployment insurance laws, occupational accident insurance laws, and regulations regarding workplace safety and hygiene;
Compensation claims between employees and enterprises or organizations sending employees to work abroad under contract;
Disputes between leased employees and leasing employers.

8. What are the court costs associated with resolving Labor dispute in Vietnam?

Accoding to the provisions of point a Clause 1 Article 12 of Resolution 326/2016/UBTVQH14, employees are exempt from paying advance court fees, litigation fees, court application fees, and court fees when initiating lawsuits regarding the following issues:

Claims for wages, severance pay for job loss or termination of employment contracts;
Issues related to compensation for damages;
Lawsuits regarding wrongful termination or illegal termination of employment contracts.

According to the Fee Schedule attached to Resolution 326/2016/UBTVQH14, the civil court fees for labor cases are as follows:

For Labor disputes without a monetary value: The court fee is 300,000 VND.
For Labor disputes with a monetary value:

Type of fee	Amount
Up to 6,000,000 VND	300,000 VND
From over 6,000,000 VND to 400,000,000 VND	5% of the disputed asset value
From over 400,000,000 VND to 800,000,000 VND	20,000,000 VND + 4% of the portion exceeding 400,000,000 VND
From over 800,000,000 VND to 2,000,000,000 VND	36,000,000 VND + 3% of the portion exceeding 800,000,000 VND
From over 2,000,000,000 VND to 4,000,000,000 VND	72,000,000 VND + 2% of the portion exceeding 2,000,000,000 VND
Over 4,000,000,000 VND	112,000,000 VND + 0.1% of the portion exceeding 4,000,000,000 VND

9. Why is hiring a Lawyer necessary in Labor disputes in Vietnam?

In an increasingly complex legal environment, not everyone is familiar with the regulations regarding labor contracts. When disputes arise, such as unjust termination, illegal contract termination, non-payment of wages or bonuses, or violations of contract terms, the resolution process can be prolonged and fraught with difficulties. These disputes not only impact legal rights but also affect the relationship between employees and employers, potentially leading to unwanted tensions.

Hiring a lawyer specializing in labor disputes is the optimal solution to protect rights and ensure that the resolution process is transparent and lawful. Lawyers provide professional support in navigating complex legal issues while helping to shorten resolution times, reduce costs, and maintain positive relationships among involved parties. With their in-depth knowledge and practical experience, lawyers serve as reliable partners in safeguarding your legitimate interests.

10. Phong & Partners Law Firm specializes in resolving Labor disputes in Vietnam

Currently, in every field, finding a service provider is quite simple. However, identifying an entity that possesses both the necessary expertise and a commitment to ethical practice is exceedingly difficult. Finding a lawyer in general, and specifically one who specializes in labor dispute resolution, who meets the criteria of professionalism, dedication, and ethics is even more challenging.

Phong & Partners Law Firm has been providing consulting services and representation for resolving labor dispute issues in Da Nang City specifically and throughout the country generally. Here, cases are approached and resolved by "awakening" the goodwill of both parties to harmonize conflicts through a win-win formula. Legal action will be the last resort to help clients achieve the best outcomes with minimal emotional, mental, physical, and financial costs; more importantly, it helps preserve and develop positive relationships among the parties involved. With their expertise, reputation, dedication, and ethics, Phong & Partners Law Firm has successfully resolved numerous labor disputes without resorting to litigation in court or arbitration councils.

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