The right to manage and supervise employees and the procedure to do so can be confusing to many enterprises. To ensure the management, administration, and supervision of employees, apart from labor contracts, enterprises often develop internal procedures and forms. Since the ‘Labor Code 2019’ has taken effect from January 1, 2021, the following article shall summarize the necessary procedures and forms required to manage employees under the new labor code.

Probation contract

According to the provisions of the Labor Code 2019, “An employer and an employee may include probation in the employment contract or enter into a separate probation contract”. Therefore, the enterprise can either include the probationary period in the employment contract or sign a separate probation contract. However, the enterprise should separate the probation contract and the labor contract into two different documents for a clear distinction.

Signing a separate probation contract with the employee will make it easier for the enterprise to offer separate terms for the probationary period (if any). This avoids confusion with the official labor contract. Accordingly, the probation contract will record the criteria to evaluate whether the employee is meeting the job requirements during the probationary period and the method and conditions for terminating the probation contract. This is important for management positions and senior positions in the enterprise.

Form for Labor contract

A labor contract is considered the most important document in the labor relationship between the enterprise and the employee. Accordingly, “An employment contract is an agreement between an employee and an employer on a paid job, salary, working conditions, and the rights and obligations of each party in the labor relations”.

Enterprises need to make a unified form of labor contract. Currently, according to the provisions of the Labor Code 2019, definite-term labor contracts can be signed for a term of up to 36 months. Therefore, based on the position and job role, the enterprise can create a labor contract with the required terms. The enterprise can decide the terms of the labor contract on a case-by-case basis.

Internal Labor Regulations

Internal labor regulations (“ILRs”) have great significance in labor management and labor discipline. According to the provisions of the current Labor Code, “Every employer shall issue their own internal labor regulations. An employer that has at least 10 employees shall have written internal labor regulations. Written regulations are not required if the employer has fewer than 10 employees but labor discipline and material responsibility must be included in the contents of the employment contracts”. Thus, if the enterprise employs 10 or more employees, it must register the ILRs at the specialized labor agency of the People’s Committee of the province where the enterprise is registered.

In addition, the current Labor Code also prohibits “imposing a disciplinary measure against an employee for a violation which is not stipulated in the ILRs or labor contract or labor laws”. This proves that the ILRs play an important role in determining disciplinary action against employees. Accordingly, no employee shall be imposed with a disciplinary measure if such act is not specified in the ILRs, labor contract or labor law. Labor contracts often do not record all violations for which disciplinary measures apply. They are generally subject to corresponding disciplinary sanctions. Therefore, in order to manage human resources strictly regardless of the employee’s position, implementation of ILRs is necessary.

Assessment of employees’ fulfillment of duties

The current labor law allows enterprises to unilaterally terminate labor contracts with employees if they find that such employee “repeatedly fails to perform his/her work according to the criteria for assessment of employees’ fulfillment of duties established by the employer”. This regulation has enabled enterprises to unilaterally terminate the labor contract with the employee if the enterprise believes that the performance of the employee is not satisfactory. Determining the performance of the employee is a tedious process.

Therefore, enterprises need to develop a method of assessment of employees’ fulfillment of duties based on his/her job description, and work targets for each month or each project which the employee is required to achieve. When an employee fails to meet the job requirements stated in the assessment, the enterprise has grounds to unilaterally terminate the labor contract regardless of whether it is a definite-term or indefinite-term labor contract. Please note that this assessment is mandatory and should be considered an integral part of the labor contract for “unilaterally terminating the labor contract due to repeated failure to perform his/her work according to the criteria for assessment of employees’ fulfillment of duties established by the employer“.

Process of recruitment, labor discipline, and unilateral dismissal

Current labor law does not require enterprises to develop internal processes. However, the labor law stipulates that enterprises, while handling disciplinary measures or unilaterally terminating labor contracts, must strictly follow the procedures prescribed by the law. The process of recruitment, labor discipline, unilateral dismissal etc. shall be carried out as per the labor law. However, the regulations governing these processes are scattered in many different articles and documents.

Therefore, enterprises should develop a process that includes detailed explanations and diagrams. This helps enterprises anticipate the steps to be taken and the corresponding procedures of recruitment, labor discipline, and unilateral dismissal.

The article is based on laws applicable at the time noted as above and may no longer be appropriate at the time the reader approaches this article as the applicable laws and the specific cases that the reader may wish to apply may have changed. Therefore, the article is for referencing only.


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