Date: 13 July 2021
Writers: Huy Nguyen and Thao Nguyen
Internal Labor Regulations (ILRs) is a document issued by an employer, in which its provisions creating grounds for employment relationship that employees must implement. Together with labor contracts, ILRs is necessary for both employer and employee. Therefore, through 18 Q&As below, BLawyers Vietnam would like to introduce an overview of the legal issues regarding ILRs.
1. What is ILRs?
ILRs stands for Internal Labor Regulations or Internal Labor Rules. The prevailing Labor Code 2019 (“LC”) does not define the concept of ILRs. However, based on the content of ILRs provided by the law, ILRs is a document that prescribes rules of conduct, orders that employees need to comply when working for employers. If failing to comply, employees will be handled with labor discipline measures.
2. If any enterprise made an ILRs pursuant to LC 2012, must it make a new one pursuant to LC 2019 (became effective from 01 January 2021)?
ILRs contents prescribed in LC 2019 have had many changes compared to LC 2012, specifically supplement the following main contents: (1) Prevention and combat of sexual harassment at the workplace; order and procedures for handling acts of sexual harassment at the workplace; (2) Cases in which employees may be temporarily assigned to perform jobs which are not stated in labor contracts (“LCT”); and other changes. Therefore, ILRs pursuant to LC 2012 is no longer effective and enterprises should make a new ILRs pursuant to LC 2019.
3. Is it legal to deduct employees’ monthly salary because of the breach of ILRs?
There are only several forms of handling breaches of ILRs, including: (1) Reprimand; (2) Salary increase period extension for no more than 06 months; and (3) other forms provided by law. However, prevailing law prohibits the act of applying a fine or wage cut as a form of handling breaches of labor. Therefore, it is illegal to deduct employees’ monthly salaries because of the breach of ILRs.
4. What contents should be included in the ILRs?
ILRs must have the following principal contents: (1) Working time and rest time; (2) Order at the workplace; (3) Occupational safety and health; and (4) Other contents provided by law.
5. Can the ILRs made and registered for the head office of a company be applied for its branches in other provinces in Vietnam?
ILRs made and registered for the head office can be applied for its branches in other provinces in Vietnam if enterprises send the registered ILRs to the specialized agencies in charge of labor affairs under provincial-level People’s Committees of the localities where such branches are based.
6. What are the orders and procedures to register ILRs?
ILRs is registered in following steps:
- Step 1: Within 10 days from the date employer issues ILRs, employer shall prepare a dossier, including (1) a written request for registration of ILRs; (2) ILRs; (3) A paper showing opinion of the grassroots-level employees’ representative organization; and (4) other documents (if any);
- Step 2: The employer submits such dossiers to the specialized agency in charge of labor affairs under the provincial-level People’s Committee or specialized agencies in charge of labor affairs under district-level People’s Committees of the locality where the employer makes business registration.
7. Is it legal when an enterprise forces its employees to pay money for the lost equipment under ILRs?
According to LC 2019, the employee who loses tools, equipment or assets of the employer shall wholly or partly pay compensation for the lost asset in accordance with the market price or as prescribed in ILRs. Therefore, it is legal when an enterprise forces its employees to pay money for the lost equipment under ILRs.
8. Must all enterprises have ILRs?
According to LC 2019, in case the employer employs from 10 employees or more, it must issue ILRs in writing and register with authority. Therefore, enterprises employing less than 10 employees do not need to have ILRs.
9. Can an enterprise proceed with labor discipline settlement over its employees without issuing ILRs?
Without ILRs, enterprises are still able to proceed with labor discipline settlement over their employees if employees committed a breach which is stated in the signed labor contract or prescribed in LC.
10. If there are conflicts between the collective labor agreement and ILRs, which one is preferred?
The law provides that in case ILRs is not conformable with the collective labor agreement, ILRs shall be modified; during the modification period, collective labor agreement shall be applied. This shows that the law gives priority to the application of collective bargaining agreements over ILRs.
11. When do ILRs come into effect?
ILRs shall start to have effect after 15 days from the day on which the satisfactory application is received by a competent authority.
The effect of the written ILRs issued by an employee that has fewer than 10 employees shall be decided by the employer.
12. Why do employers enact ILRs?
Enacting of Internal Labor Regulations (ILRs) shall have benefits as follow:
- Avoiding penalties in accordance with the law;
- Preventing the violations of discipline;
- Having legal basis for taking actions against the violations of discipline; and
- Clarifying issues that are unclear or not regulated by the law.
13. What sanctions can employers face if they do not register ILRs?
Employers that fail to register ILRs with regulatory labor authorities at the provincial level shall be subject to a penalty of up to VND10,000,000.
14. Is it necessary to register amended contents of ILRs with the management agency?
The law only provides that before revising the ILRs, the employer shall consult with the grassroots-level employees’ representative organization (if any).
In addition, employers only must submit the application for registration of Internal Labor Regulations (ILRs) when issuing ILRs.
Therefore, currently, there is no regulation stipulating that employer who have registered ILRs must re-register when amending it.
15. What if the management agency does not agree with provisions built by employers in ILRs to discipline employees in the ILRs registration process?
According to the law, if any of the contents of ILRs is considerable as contrary to the law, the provincial labor authority shall notify and instruct employers to revise it and re-submit the application. Therefore, in case management agency does not agree with provisions on labor discipline provided in ILRs, they will give instructions to employers so that the employer can amend and re-submit.
16. If there are conflicts between LCT and ILRs, which one is preferred?
Currently, the Vietnam law has not stipulated the order of priority between Internal Labor Regulations (ILRs) and LCT. However, in case there is a difference between these documents, the priority may be dependent on the following cases:
(i) If an issue is specified in LCT but not in ILRs and this issue is not contrary to the provisions of law, LCT shall prevail and vice versa.
(ii) If there are disputes between ILRs and LCT about rights and interests of employees, it is possible to consider that documents which have less impact on the rights and interests of employees or are more beneficial to employees shall be given priority.
17. If enterprises make ILRs in a foreign language together with the Vietnamese version, is it mandatory to register both of them?
LC 2019 and relevant Decrees have not provided languages for ILRs when submitting it. However, according to the Constitution 2013, the national language is Vietnamese. Every ethnic group has the right to use its own spoken and written language to preserve its own identity and to promote its fine customs, practices, traditions and culture. Therefore, in principle, when companies register ILRs, it must be in Vietnamese. They can also use bilingual copy, but it is not compulsory.
18. If enterprises do not have a grassroots-level employees’ representative organization, can it issue and register ILRs?
Representative organization of employees means an internal organization voluntarily established by employees. Therefore, the establishment of a grassroots-level employees’ representative organization is not compulsory when employees are not willing to join. However, ILRs issued by employers without feedback from such organization shall not be effective.
In this case, if enterprises do not have a of a grassroots-level employees’ representative organization, superior organizations will be responsible to give opinion on the contents of IRLs. However, in reality, some upper-level organizations are not willing to support the company in this matter because they consider that the ILRs is an internal matter of the company and they cannot have any further opinion.
Therefore, companies with a large workforce should coordinate with the superior organizations to establish a grassroots-level employees’ representative organization before registering Internal Labor Regulations (ILRs).
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