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Issue 130326 - Collective labour agreements under Vietnamese law – key issues for enterprises
Dear Valued Clients, In human resource management practice, enterprises are generally accustomed to regulating employment relationships through individual employment contracts and internal labour regulations. However, Vietnamese labour law also establishes other mechanism to govern these matters, which is through a Collective Labour Agreement (“CLA”). A CLA is formed through collective bargaining and mutual agreement between the employees’ representative organisation and the employer, with the objective of standardising working conditions and setting a common baseline of rights and benefits within the enterprise. Under the Labour Code 2019, a CLA not merely an ordinary contractual document. It is the formal product of a collective bargaining process and is legally binding on all employees and the employer within its scope of application. Properly drafting and implementing a CLA in compliance with statutory requirements is therefore crucial to stabilising labour relations and controlling legal risk. Definition and legal nature of CLA Pursuant to Article 75 of the Labour Code 2019, CLA is a written agreement reached through collective bargaining between, on the one hand, the employees’ representative organisation and, on the other hand, the employer (or the employers’ representative organisation), for the purpose of establishing working conditions mutually agreed upon by both parties for…
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