Question 48. Upon being under pressure from upper supervisors due to their request on speeding up to fulfil the retrenchment process for the Employee as restructuring, while under the Labour Code, it will take at least from 02 to 03 months to undertake the aforementioned procedure, what should the human resources executive do in order to strike a balance between the request of the upper supervisors and the provisions of the Labour Code?


In the restructuring procedure, two steps for which labour law prescribes specifically in terms of implementation time including:

  • The termination of the LC with 02 Employees or more due to the reason of restructuring shall only be implemented afterconsulting with the organisation representing employees at the grassroots levelin the case of locations [enterprise] which have such an organisation and of which the Employees are members and after 30 calendar days prior notice has been provided to the provincial People’s Committee and to the Employees. Accordingly, the wait for the expiry of the period of 30 calendar days due to the notification to the Provincial People’s Committeecannot be changed. This period of time is necessary for the Employees to have enough condition to make complaints on enterprise’s restructuring and settle complaints (if any);
  • Giving prior notices to the Employee regarding the termination of the LC as restructuring in order for the Employee to have a reasonable amount of time to seek a new job elsewhere. In fact, this step is not mentioned by the Labour Code, but local labour management State agencies and competent Courts often request the enterprise to undertake it. Therefore, the Employer should give 30-calendar day prior notices for the Employee working under a definite-term LC or the 45-calendar day prior notices for the Employee working an indefinite-term LC. In practice, the Employer often chooses the solution in which they pay salary to the Employee corresponding to the 30 or 45 days of prior notification in order to terminate the LC immediately instead of giving prior notices and waiting.

If the executive board of the enterprise is requested by the board of directors or the board of members to shorten the procedure, the human resources executives or in-house lawyers should advise the manager of the enterprise on the legal procedure under the labour law that the wait for the expiry of the period of 30 calendar days due to the notification to the Provincial People’s Committee cannot be changed in any cases and the legal risks that enterprise may face if they try to shorten or reduce a procedure under the process in other steps.

In order to make advice more objective and effective, the human resources executives and/or in-house lawyers can propose to hire outside attorneys specialisingin rendering legal advice on labour law to get more expert opinion on this matter. The advice provided by an intermediary party that has actually dealt with many cases in practices will be more objective and convincing.

If the manager of the enterprise still requests [the human resources executives or in-house lawyers] to render a suitable method to shorten such a procedure, the human resources executives or in-house lawyers may propose a plan in which the Employer will negotiate with the Employeesbeing expected to be laid off to reach agreements on the termination of the LCon the basis of the consent of the termination of the LC. Retrenchment on the basis of agreements on the termination of LC is always the safest plan for the enterprise, and minimise labour disputes in the future as well as making a good impression on the remaining Employees even though this may result in higher costs for the enterprise.