In 2012, the National Assembly passed two important laws regarding labor matters including Labor Code No. 10/2012/QH13 dated 18 June 2012 taking effect effective date from 1 May 2013 (the “New Labor Code”) and Law No. 12/2012/QH13 on Trade Union dated 20 June 2012 taking effect from 1 January 2013 (the “New Union Law”). These laws will replace the current Labor Code passed on 23 June 1994, amended and supplemented in 2002, 2006 and 2007 (the “ Current Labor Code”) and current Law No. 40-LCT/HDNN8 on Trade Union dated 30 June 1990 (the “Current Union Law”). Also, the new draft of Employment Law is under discussion and expected to take effective from 1 January 2015 (the “Draft Employment Law”).
Providing many new regulations, these new laws will explicitly impact to labor relationship and employers’ business. In the scope of this document, we will focus on the impact of new laws to company (employer) costs. Specifically, the revisions can make company direct / indirect costs (as defined below) increased.:
• “Direct cost” revisions mean legal requirements that would directly impose higher taxes, fees and labor costs on the enterprises, e.g., increase of probationary salary, minimal salary rates, insurance contribution rates, change of leave regimes, increase of salary for overtime, new regulation of union fund, etc.