Positive change for sustainable growth: How one factory has adapted to the new Vietnam Labour Code

4 Aug 2021

Garment factories in Vietnam are making strides to adjust their internal regulations and policies to reflect the changes to the national labour code.

The Vietnam new Labour Code was adopted by the National Assembly of Vietnam in November 2019, and it has been implemented as of January 2021. Although the new Labour Code has brought the Vietnamese legal framework in line with international standards and fundamental labour rights, these changes have caused a significant impact on enterprises in Vietnam, including garment factories. Like many other factories, Maxport Limited Vietnam (or Maxport 9), a Better Work Vietnam-participating factory located in Thai Binh province, has faced real challenges while reviewing and adjusting their internal labour regulations in order to comply with the new law. However, with the support of Better Work Vietnam, Maxport has been a good model of a proactive approach to implementation, including clear communication with employees.

Through advisory sessions with and working with Better Work Vietnam enterprise advisors, Maxport tackled the changes directly to prevent confusion later. The company reviewed its internal regulations and HR policies, especially those related to labour contracts and protection from discrimination and harassment). As a result, new policies have been gradually developed and implemented at the factory level. In late 2020, Maxport developed and implemented a new regulation related to pregnant employees, which indicated reduced working hours for pregnant women who perform hazardous work and encouraged them to learn about their maternity rights and benefits through discussion with HR personnel.

Vietnam Labour Code

“Finding ways to improve working conditions is always a key priority for Maxport. We comply with the law, health and safety legislation, but we don’t have to stop there. We want to fully grasp the benefits of going the extra mile –above and beyond compliance,” said Mr. Tien Pham, Maxport 9 Branch Director.

Tien and other directors are emphasizing strong employee communications, as the company believes that an engaged workforce is a key to sustainable development. Many effective communications tools and channels such as using the radio, bulletin boards, training courses, and regular social dialogues sessions between management and workers have been used to improve communication and message consistency. They have also made an effort to make real-time information available while implementing new regulations and policies at the factory.

As a participating factory joining the Better Work Vietnam programme, Maxport has been supported by the programme,  helping them stay strong in the face of COVID-19 in the challenging past year and a half. Maxport is one of many factories Better Work Vietnam has supported. The programme is also aiding the Ministry of Labour on guiding factories with implementation of the new code, as well as facilitating open dialogue between employers and workers and their representatives at factories across Vietnam. Ms. Huong Nguyen serves as the Trade Union Chairwoman of Maxport 9 and has worked closely with Better Work Enterprise Advisors throughout the pandemic.

“The best thing about Better Work is the business continuity in a COVID-19 world. In the past year, the programme successfully delivered continuous services despite some small disruptions due to COVID-19, and we appreciate it a lot. Our Better Work Enterprise Advisor, Mai, has provided us with great support in revision and adjustment of our internal regulations while adapting to the key changes introduced by the law,” said Ms. Huong Nguyen.

Through some coordination activities between Better Work Vietnam and the local government partners, Maxport also participated in industry seminars, which focused on Vietnam’s new Labour Code to help factories to better understand the changed contents and discuss scenarios for implementation. Furthermore, they also applied other Better Work Vietnam initiatives with a focus on the prevention and mitigation of COVID-19, through joint-advisory sessions, and projects such as GEAR (Gender Equality and Returns), which trains women working in garment factories to progress to higher-level roles while contributing to increased line-level productivity.

“We have learned a lot from the joint-advisory sessions, as we have the opportunity to discuss our learnings with other factories and seek solutions, especially during the first and second waves of COVID-19 in Vietnam. Through these sessions, we are able to identify the risks and consider the labour plan options for each scenario. We are encouraged to share the best practices to fight against COVID-19 at the factory level as well,” said Ms. Ha Pham, Maxport 9 HR/Compliance Manager.

With a proactive approach and strong management direction, Maxport offers a useful model of how to stabilize and strengthen the workplace environment for employees while adapting to new legal changes.[/vc_column_text][vc_separator color=”sandy_brown”][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]Other Maxport changes due to Vietnam New Labour Code:

  • According to Clause 4, Article 122 of the new Labor Code, Maxport does not take disciplinary action against male employees who are on maternity leave or raising children under 12 months old. The factory has made a list to monitor and manage employees belong to this group.
  • According to Clause 1, Article 137 of the new Labor Code, Maxport does not arrange overtime for male employees who are raising children under 12 months old, unless agreed by the employees. The factory has made a list to monitor and manage employees belong to this group.
  • According to Clause 2, Article 137 of the new Labor Code, Maxport has added a new change to the factory regulation. In which, for female employees doing heavy, hazardous and dangerous jobs during pregnancy, they will be entitled to 01 working hour reduction from the date of notification to the factory healthcare unit without any reduction in in wages, rights and benefits until the end of period while raising children under 12 months old.
  • According to Article 113 of the new Labor Code, Maxport has built an annual leave schedule after consulting with the employees. After the factory notice, the employees are able to arrange to take all annual leave days in a year. In case the employee gives birth unexpectedly, gets sick, or has an occupational accident but he/she cannot take all annual leave days, the number of unused annual leave days will be preserved until the end of the third quarter of the following year.
  • According to Article 118 of the new Labor Code, Maxport has added 01 additional chapter in their factory regulation detailing the prevention sexual harassment at the workplace, which indicate the handling procedures in case of sexual harassment incidents at work.

Subscribe to our Newsletter

Keep up to date with our latest news and publications by subscribing to our regular newsletter.