Date: 13 July 2021
Writers: Huy Nguyen and Thao Nguyen
In the relationship between enterprises and employees, Collective Labor Agreement (CLA) brings benefits not only to employees but also to enterprises. If this regulation is well implemented, businesses will be significantly beneficial when employees work without having any concerns. However, not all enterprises can draft a CLA in accordance with the law and harmonize the interests of the parties. Therefore, through the FQAs below, BLawyers Vietnam would like to introduce an overview of the legal issues relating to CLA to help businesses and employees implement the CLA in the most appropriate way.
1. What is a Collective Labor Agreement (CLA)?
Collective Labor Agreement (CLA) is an agreement that is reached through a collective bargaining and concluded in writing by the parties. The contents of a CLA must not be contrary to the law and should provide for the terms and conditions that are more favorable to the employees than those provided by law.
2. Must enterprises have a CLA?
One of the rights of an employer prescribed by law is the right to request the employees’ representative organization to hold bargains for the purpose of signing a CLA. Because this is a right, not an obligation of the employer. Therefore, enterprises are not required to have a CLA.
3. How is the procedure for signing a CLA regulated by law?
According to the prevailing law, after reaching an agreement at a collective bargaining meeting, the parties proceed to develop a draft CLA. The draft then will be sent to all employees for opinion. CLA will be signed only when more than 50% of employees of the enterprise cast votes for.
4. From what date will the CLA take effect?
The effective date of the CLA is the date agreed upon by the parties and stated in the CLA. In case the parties reach no agreement on the effective date of a CLA, CLA takes effect on the date of its signing.
5. In which cases is the CLA invalid?
CLA is wholly invalid if: (1) The whole contents of the agreement are contrary to the laws; (2) The agreement signer is incompetent; and (3) other cases provided by the laws.
CLA is partially invalid if one or more of its contents is/are contrary to the laws.
6. Which authority of Vietnam has the competence to declare the CLA invalid?
The People’s Court is the only state agency that has the competence to declare CLA invalid.
7. Can relevant parties amend and supplement the CLA?
CLA can be amended and supplemented in two cases: (1) the parties voluntarily agree to amend and supplement; (2) the CLA becomes unconformable with prevailing laws.
8. What contents should be included in the CLA?
The law does not stipulate the contents of a CLA. It only provides general principles, according to which the content of a CLA must not be contrary to the provisions of law; and are encouraged to be more beneficial to employees than what is prescribed by law.
9. What should employees do when having a dispute with employers on the CLA?
In case where disputes between employers and employees on CLA occur, employees can take following actions:
- Requiring the labor conciliators to settle dispute before bringing it to a labor arbitration council or a People’s Court if there are differences in the interpretation and implementation of provisions of a CLA;
- Requiring the labor conciliators to settle dispute before bringing it to a labor arbitration council or carrying out procedures for a strike, when there are disputes on the signing of a CLA or when one party refuses to bargain or fails to bargain within the time limit prescribed by law.
10. How will the enterprises be penalized if the enterprises fail to comply with the CLA?
The prevailing law does not provide for penalties in case enterprises fail to comply with the CLA. However, the law provides that in such a case, employees have the right to request the settlement from labor conciliators before bringing it to a labor arbitration council or a People’s Court.
11. Do employees who do not vote in favor of a CLA have to comply with it?
The law provides that employees are obliged to fully implement the CLA which is currently in force regardless of whether they vote in favor of such CLA.
12. Who are parties to enter a CLA?
Parties engaging a CLA include employers or a collective bargaining council of employers and all employees working for such employers or representative organizations of employees depending on types of CLA.
13. How many copies of the CLA that the parties must make and keep?
The relevant parties can make CLA into many copies based on types of CLA. However, it must be deliverable with 01 copy to following parties:
- Collective bargaining council of employer;
- Representative organizations of employees;
- Employees or collective employees; and
- Provincial labor authorities.
14. Do employers have the right to reject signing CLA?
Currently, there is no regulation to impose penalties on enterprises that refuse to sign CLA because it is based on negotiation and discussion between employees and employers. However, when employees request, employers must carry out collective bargaining, otherwise he/she shall be subject to a fine of up to VND5,000,000.
15. How long is a CLA valid?
The effective period of a CLA shall 01 – 03 years depending on parties’ agreement and such period must be specified in CLA.
16. What employers should do when there are conflicts between Labor contract and Collective Labor Agreement (CLA)?
The law provides that if rights, responsibilities, and interests of the parties stipulated in labor contract are less favorable than those of respective provisions provided in CLA, the provisions of CLA shall prevail. Therefore, when there are conflicts between LCT and CLA in which CLA is more favorable for employees than LCT, CLA shall be prioritized.
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