Vietnam labor dispute resolution: steps for employers

Vietnam labor dispute resolution follows a set order: a labor mediator first, then either a labor arbitration council or the People's Court. The order comes from the Labor Code passed on 20 November 2019. Decree 145/2020/ND-CP, signed on 14 December 2020 and in force from 1 February 2021, adds the working detail. This guide walks employers through the steps and the time limits.

Two kinds of dispute

The law treats individual disputes and collective disputes differently. An individual dispute is between one worker and an employer. It can also involve a worker sent abroad under a contract, or an outsourced worker and the client company. A collective dispute is between a workers' representative body and the employer.

Collective disputes split in two. A right-based dispute is about whether a legal right or a signed deal was respected. An interest-based dispute is about new terms that the sides want, such as pay or conditions in a bargaining round. The path and the final step differ for each, so an employer should first work out which one it faces.

The guiding idea is the same for all of them. The parties should talk first. The law favors mediation and arbitration, and it asks that disputes be handled openly, fast and within the law.

Sources: Labor Code, Law No. 45/2019/QH14 (passed 20 November 2019), for the types of dispute and the principles; Decree 145/2020/ND-CP (signed 14 December 2020), official Vietnamese text, for its dates.

Step one: the labor mediator

Most individual disputes must go to a labor mediator before they go anywhere else. Mediators are chosen under Decree 145. The head of the provincial People's Committee names them, and a mediator serves a term of up to five years. A written request can go to the district or provincial labor office, or straight to a mediator. A mediator who gets it directly must pass it to the labor office within 12 hours, and the office then assigns the case.

Some individual disputes can skip mediation. These include disputes over dismissal for discipline and over ending a contract on one side's own decision. They also include disputes over damages and allowances when a contract ends, disputes with a domestic worker, and social, health, unemployment and work-injury insurance disputes. The same goes for damages claimed by a worker sent abroad and disputes involving an outsourced worker.

For collective disputes, mediation is the first stop. A right-based dispute goes to a mediator before arbitration or court. An interest-based dispute goes to a mediator before it can reach arbitration or before a strike can be held.

Sources: Decree 145/2020/ND-CP, official Vietnamese text (Articles 93 and 95), on the appointment and assignment of mediators; Labor Code, Law No. 45/2019/QH14, for the cases where mediation is not required.

Step two: arbitration or court

If mediation is not required, fails, or the mediator does not start on time, the parties may choose. They can ask a labor arbitral tribunal to decide, or they can go to the People's Court. Arbitration of individual disputes is a new option under the 2019 Code and it needs both sides to agree to it.

Arbitration is run by a provincial labor arbitration council. The council has a chair from the provincial labor department, secretaries who are officials, and part-time arbitrators. Its term is five years. After a request arrives, the council has 7 working days to set up a tribunal. Each side picks an arbitrator, and those two choose the chief of the tribunal. If a side fails to choose, the council chair chooses for it.

The tribunal then has 30 days from its start date to study the file, hold a meeting and issue a written decision. The parties get at least 5 days' notice of the meeting. Once arbitration is requested, neither side may file the same dispute in court at the same time.

There are two safety valves. If no tribunal is formed or no decision is issued on time, the parties may go to court. If one side does not follow the decision, the other side may also go to court.

Sources: Decree 145/2020/ND-CP, official Vietnamese text (Articles 101 and 102), on the councils and tribunals; Labor Code, Law No. 45/2019/QH14, for the choice of arbitration or court and the court fallback.

Time limits employers should know

Time limits matter, because a late request can be refused. For individual disputes, a request to a mediator must be made within 6 months of the day the party learns its rights were harmed. A request to a tribunal has 9 months. A court case has 1 year. Right-based collective disputes use the same three limits.

If a major event outside anyone's control, such as a disaster, blocked a filing, the time of that event does not count toward the limit. Employers who are on the receiving end of a claim should note the date the worker first complained, since it may decide whether the claim is still open.

Sources: Labor Code, Law No. 45/2019/QH14, for the time limits and the force majeure rule.

The system is only starting to run

Arbitration of individual disputes is new, so practice is thin. In November 2022 the International Labour Organization reported that the Dong Nai Labour Arbitration Council had received its first case on 11 October 2022. The case was a dispute that mediation could not settle. Its first hearing took place on 7 November 2022, and the ILO described it as the first case arbitrated in Viet Nam. Dong Nai was among the first group of councils set up under the 2019 Code.

The ILO said the aim is to help sides settle disputes quickly and keep them from growing, and to cut the need for long and costly court cases.

Sources: International Labour Organization, "New pillar within Viet Nam's labour dispute settlement system operational, expected to help workers and employers" (28 November 2022).

A short checklist for employers

Sort the dispute as individual or collective. Check whether mediation is required. Note the filing deadlines. Keep clear records, such as contracts, pay slips and written warnings, because every body that hears the case will ask for them. Reply to a mediator or tribunal on time. If a decision is made against you, follow it, since refusing gives the other side a path to court.

This article is general information about the rules, not legal advice. For a real dispute, speak to a qualified lawyer.