The New Vietnamese Labour Code, No. 45/2019/QH14 of 20 November 2019, entered into force on 1^st January 2021. It replaced the Labour Code of 2012, by introducing a legislation that is more in line with the International Labour Organization (ILO) Fundamental Principles and Rights at Work, as part of several trade agreements signed by Viet Nam (for instance the European Viet Nam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)).

Decrees and Circulars are needed to implement this Code.

The key changes outlined in the Code are:

• extended coverage of the Labour Code, including workers without a written employment contract, the so-called “workers without a labour relationship” (and so covering about 55 million people, instead of 20 million workers covered by the previous Labour Code).
• limited use of employment contracts only to two types: indefinite-term or definite-term, for a maximum of 36 months. 
• clarified rules on termination of employment, by the employers for reasons of: having reached the retirement age; absence from work for five consecutive days with no valid reason; having provided false information to the employer when starting the employment relationship.
• Clarified rules on working time, that remain 48 hours per week and eight hours a day, except when an agreement exists between employers and employees for overtime. In this case overtime cannot exceed 12 hours a day, 40 hours a month and 200 hours a year. For certain sectors and due to seasonal orders, overtime cannot exceed 300 hours a year.
• Improved and more financially sustainable social security system, through increased retirement age (62 for men and 60 for women);
• Facilitated dialogue between the social partners, at all levels: “the code has created legal provisions for workers and employers to decide wages and working conditions through dialogue and negotiation, with the role of the State limited to defining legal minimum standards such as minimum wages and overtime caps. For example, employers no longer have to register their salary scales and tables but are required to consult with workers’ representative organisations”.
• Enabled freedom of association for workers, that are now allowed to establish and to join an organisation of their own choosing, independently from its affiliation to the Viet Nam General Confederation of Labour (VGCL).
• Increased protection for employers and workers’ organisations against acts of interferences and anti-union discrimination (for workers).
• strengthened protection against gender discrimination and sexual harassment at work, that are now considered as a new ground for dismissal.
• Streamlined labour dispute resolution and regulated use of strike action.

The new Labour Code has been welcomed by the business community in Viet Nam, as well as by the International Labour Organization (ILO). According to the Director of the ILO Office for Viet Nam, Chang-Hee Lee, “the new code will put Vietnam on an accelerated track for decent work for all working women and men. [...]. It makes numerous improvements which can bring benefits for workers and employers. But they will become a reality only when all are aware of their new rights and actively use them”.