Answer:
Article 42 of the Labour Code prescribes that if the restructuring affects 02 Employees or more, the Employer shall have the responsibility to establish and implement a new labour usage plan; if there are new vacancy, the Employer shall prioritize retraining Employees in order to continue to employ them. If the Employer is unable to handle any new job for the Employee but must retrench the Employee,then the Employer must pay retrenchment allowance to the Employee. The termination of the LC with 02 Employees or more due to the reason of restructuring shall only be undertaken after consulting 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 the Employer shall give 30-days prior notice to the provincial People’s Committee and the Employee.
According to Article 42 of the Labour Code, the establishment of a labour usage plan is a mandatory procedure for the Employer if the “restructuring” affects 02 Employees or more. The labour usage plan must comprise all the content prescribed in Article 44 of the Labour Code.
Thus, the establishment of a labour usage plan may be deemed as the most difficult and risky procedure because of the following reasons:
- The labour usage plan shall provide a convincing explanation about why the restructuring leads to a fact that the Employer must retrench concerned Employee mentioned in such a document. E.g. for an enterprise, a department or a division of an enterprise employs 30 Employees, why the restructuring leads to the retrenchment of 5 Employees only but not affect the rest in that enterprise, department or division. Some reasons as those 5 Employees have not fulfilled their jobs well or such Employees lack professional working attitude, etc. are not appropriate for the purpose of restructuring; and
- During the establishment of the labour usage plan, the participation of the organisation representing employees at the grassroots levelin the case of locations [enterprise] which have such an organisation shall be required. Although Labour Code has not required the labour usage plan to be approved by the organisation representing employees at the grassroots levelin the case of locations [enterprise] which have such an organisation, however, objections or unfavourable opinions from such an organisation in the case of locations [enterprise] which have such an organisation will create driving forces and premises for the Employees’ objections. As a result, the retrenchment process due to the restructuring may be lengthened.
