The Labour Code does not have specific regulations and there are conflicting opinions regarding this matter. In this case, there is a point of view that the Employer will not have to pay for the unused annual leave days because Article 113.4 of the Labour Code stipulated that “Employer is responsible to determine the annual leave schedule after consulting the Employees and the Employer must inform the Employees of the annual leave schedule in advance”. Thus, compared to the previous regulations, this provision is no longer considered as the right of the Employer but the Employers’ obligation even though the nature in its content remains the same. Accordingly, after being notified by the Employers, the Employees must comply with the annual leave schedule that the Employer has consulted with the Employees.
However, because this is a controversial topic, to avoid possible risks, the Employer should fully pay for the annual leave days that the Employees have not taken. If the Employer does not want to pay salary for these annual leave days, the Employer should do the following to limit the risks that may occur:
- To specify the annual leave schedule in the ILR which are registered with the labour management agencies in provincial People’s Committee;
- To specify the annual leave schedule in the CLA after conducting the collective bargaining and obtaining the approval of the organisation representing the Employees at the grassroots level;
- To specify the annual leave schedule in LCs concluding with new Employees or in appendices of LCs with respect to current Employees;
- To conduct the annual bargaining with the Employee collective and the executive committee of the grassroots trade union on the annual leave schedule; and
- During the time when the Employees are still working, the Employer must notify the Employees of taking their annual leave according to the prescribed schedule, otherwise their unused annual leave days will be withdrawn.