Legal framework on forced labor in Vietnam: key considerations for companies

In recent years, the issue of forced labor has emerged as a major concern not only domestically but also at the international level. The prevention and elimination of forced labor practices are not only requirements imposed by state regulatory authorities but also constitute critical standards under the new-generation Free Trade Agreements (FTAs) to which Vietnam is a signatory. 

Against this backdrop, a thorough understanding of the prevailing legal framework and a proactive approach to compliance with regulations on the prevention of forced labor have become key factors for companies to mitigate legal risks, enhance their reputation, and affirm their commitment to sustainable development. 

This article provides an analysis of the legal framework governing forced labor in Vietnam and highlights essential matters that businesses must pay particular attention to in their production and business operations. 

1. Legal framework on foreced labor in Vietnam 

As a member of the International Labour Organization (ILO)⁽¹⁾ and having ratified Convention No. 29 on Forced Labor⁽²⁾ and Convention No. 105 on the Abolition of Forced Labor⁽³⁾, Vietnam has incorporated the issue of eliminating forced labor into several provisions across its current legal framework. Specifically, relevant regulations can be found in the Labor Code 2019, the Penal Code 2015 (as amended and supplemented in 2017), and other related legislative instruments, such as the Law on Vietnamese guest workers 2020; Decree No. 12/2022/ND-CP on administrative penalties for violations arising from labor, social insurance and sending Vietnamese workers abroad under contracts; Circular No. 20/2023/TT-BCT issued by the Ministry of Industry and Trade on working hours and rest periods of offshore petroleum workers; Circular No. 21/2015/TT-BGTVT issued by the Ministry of Transport on working hours and rest periods for employees performing special types of work in the railway transportation sector; and Circular No. 18/2021/TT-BLDTBXH issued by the Ministry of Labour, Invalids and Social Affairs providing regulations on hours of work, hours of rest applicable to workers doing seasonal production work and processing of goods under orders, among others.  

1.1. Definition 

According to Clause 7, Article 3 of the Labor Code 2019, forced labor is defined as  “the use of force, threat to use force, or other means to coerce an employee into working against their will”.  

Under Article 297 of the Penal Code 2015 (as amended and supplemented in 2017), forced labor is described as “the act of using force, threatening to use force, or employing other means to coerce another person into labor”. 

Based on these definitions, forced labor can be identified through two key characteristics: (i) the manner of conduct involves the use of force, threat of force, or other coercive means; and (ii) the consequence is that the employee is compelled to work against their will. Thus, the Labor Code 2019 primarily emphasizes the method of coercion and the absence of the employee’s free will.  

Meanwhile, Clause 1 Article 2 of ILO Convention No. 29 on Forced Labour defines forced labor as “all work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself voluntarily”. 

Under Convention No. 29, forced labor is characterized by two core elements: (i) coercion or lack of voluntariness, and (ii) the menace of a penalty for non-compliance. Notably, Convention No. 29 highlights the element of penalty threats, which encompass not only physical force but also other forms of punishment such as psychological intimidation, financial penalties, social isolation, among others.  

Accordingly, it is evident that the concept of “forced labor” under Convention No. 29 is broader and more comprehensive than the definition under Vietnamese law, as it expands the scope of coercion to include all forms of threats leading to a lack of voluntariness. 

1.2. Indicators of forced labor 

Vietnamese law has not yet established a centralized and specific set of provisions regarding the indicators for identifying forced labour. Since ILO Convention No. 29 on Forced Labour only provides a general definition of forced labour, based on this definition, the ILO has introduced eleven (11) indicators commonly used to identify situations of forced labour, including: abuse of vulnerability; deception; restriction of movement; isolation; physical and sexual violence; intimidation and threats; retention of identity documents; withholding of wages; debt bondage; abusive working and living conditions; and excessive overtime.⁽⁴⁾ These eleven (11) indicators have been sporadically reflected across various legal instruments in Vietnam, specifically: 

1.2.1. Abuse of the vulnerability of employees 

Certain groups of workers, such as migrant workers, ethnic minorities, and individuals with low levels of education, are more vulnerable to forced labour than others.  

Clause 4, Article 8 of the Labor Code 2019 prohibits the act of “taking advantage of vocational training or apprenticeship to seek illicit gains, exploit labour, or entice, induce, or coerce apprentices or trainees into illegal activities”. Apprentices and trainees are individuals who are new to the workforce and seek to acquire additional knowledge and skills across various professions. Recognizing this vulnerability, employers may exploit these individuals by compelling them to perform tasks against their will for the employer’s own benefit.  

1.2.2. Deceptive practices against employees 

Deception involves acts where individuals fail to fulfil promises made to workers, either verbally or in writing.⁽⁵⁾  

The Labor Code 2019 prohibits such acts under Clause 6, Article 8, which bans “enticing, inducing, falsely promising, misrepresenting, or employing other fraudulent means to deceive workers, or to recruit workers for the purposes of human trafficking, exploitation, forced labour, or to misuse employment services or overseas employment activities to commit illegal acts”. 

1.2.3. Restricting employees’ movement 

Employees may be locked in, monitored by cameras, or supervised by security staff, or have their identification documents and communication devices withheld, making it impossible for them to leave the workplace. Restricting employees at the workplace clearly violates occupational safety and health principles, and in the event of an accident, could result in civil liability. Moreover, detaining employees inside the workplace could constitute a criminal offense for illegal detention.⁽⁶⁾   

1.2.4. Isolating employees 

Clause 1, Article 176 of the Labor Code 2019 guarantees the right of the employees to be accessed at the workplace by the representatives of the employees’ organization in the course of their duties. This regulation aims to protect the rights and interests of employees, while also preventing the isolation of employees who are unable to interact with the community, especially in situations where assistance is needed during their employment. 

Furthermore, isolating employees may also manifest as obstructing their communication rights with family, relatives, or the outside community. To protect the right to personal communication, Article 159 of the Penal Code 2015 (as amended in 2017) regulates the crime of violating the confidentiality or safety of letters, telephone communications, telegraphs, or other forms of private communication. According to this, employers are not allowed to seize, destroy, conceal communication devices, or perform any actions that obstruct the employee’s free communication with the outside. 

1.2.5. Physical and sexual violence against employees 

Regarding physical violence, Article 35 of the Labor Code 2019 stipulates that if an employee is abused or physically assaulted by the employer, causing serious harm to their health, the employee has the right to unilaterally terminate the employment contract without prior notice. While employees are generally required to provide notice before unilaterally terminating the employment contract to allow the employer time to arrange for a replacement, in cases of physical violence, the rights of the employee are prioritized. This allows for immediate termination without notice, reflecting the severity of the violence. Additionally, Paragraph 1, Article 127 of the Labor Code 2019 further affirms that any act that infringes upon the health of the employee is strictly prohibited in the handling of labor discipline. 

Regarding sexual violence, although the Labor Code 2019 does not directly address this issue, it provides detailed provisions on workplace sexual harassment. These regulations include the definition of sexual harassment⁽⁷⁾, protection for employees against such behavior⁽⁸⁾, and the employer’s obligations to establish preventive measures and prevent sexual harassment at the workplace⁽⁹⁾. Notably, sexual harassment in the workplace is strictly prohibited, and employers have the right to impose disciplinary measures, including dismissal, on employees who engage in sexual harassment. 

Moreover, the Labor Code 2019 also includes specific provisions to protect domestic employees, emphasizing the urgency of safeguarding these vulnerable workers from physical and sexual violence, ensuring a safe and healthy working environment. 

1.2.6. Intimidation and threats against employees 

According to Article 6 of the Labor Code 2019, employers must respect the dignity and honor of employees. Therefore, if an employer engages in behavior or language that insults or harms the dignity and honor of the employee, the employee has the right to unilaterally terminate the labor contract without prior notice.⁽¹⁰⁾ Such acts of infringing upon the dignity and honor of employees are also considered prohibited actions in labor discipline.⁽¹¹⁾ 

1.2.7. Retaining employees’ personal documents 

Vietnamese labor law clearly stipulates that employers are not allowed to retain original personal documents, diplomas, or certificates of employees during the formation and execution of the labor contract⁽¹²⁾. Retaining employees’ personal documents creates a barrier to their access to these documents when needed, while also reducing their freedom of movement and ability to terminate employment in cases where the employer violates regulations, thereby granting the employee the right to unilaterally terminate the contract. In many cases, the lack of personal documents makes it difficult for employees to find new jobs or access essential services, impacting their rights and personal freedom. 

1.2.8. Retaining employees’ wages 

According to Article 94 of the Labor Code 2019, employers must pay wages directly, fully, and on time to employees. The delay in wage payment by the employer does not automatically constitute forced labor. However, when wages are deliberately and systematically withheld as a measure to force employees to continue working in order to receive the wages they are entitled to, this constitutes forced labor. Therefore, in some cases, due to unavoidable circumstances, an employer may delay wage payment to an employee for no more than 30 days, and must compensate the employee if the delay exceeds 15 days⁽¹³⁾. If the employer fails to pay the full wage or makes delayed payments, except in cases of force majeure as mentioned, the employee has the right to unilaterally terminate the contract without prior notice.⁽¹⁴⁾ 

1.2.9. Causing employees to become dependent due to debt 

Dependency due to debt is one of the acts that employers are prohibited from doing when entering into or performing an employment contract, as stipulated in Clause 3, Article 17 of the Labor Code 2019. When an employee is required to work in order to repay a debt, it indicates an imbalance of power between the employee – the debtor and the employer.⁽¹⁵⁾ 

1.2.10. Living and working conditions of employees being abused 

Vietnamese labor law requires that “the employer must provide truthful information to the employee about the work, workplace, and working conditions” when entering into an employment contract⁽¹⁶⁾. This ensures the employee’s right to access information before deciding to enter into the contract and begin the work. In cases where this information is unclear, opaque, or inaccurate, employees may find themselves living and working in conditions that are unsafe or unsatisfactory. In principle, employees have the right to unilaterally terminate the employment contract without notice if the working conditions are not guaranteed⁽¹⁷⁾. 

1.2.11. Forced overtime work beyond the legal limits 

The Labor Code 2019 dedicates Chapter VII to regulate working hours and rest periods for employees. Accordingly, employees are allowed a normal working time of no more than 8 hours per day and 48 hours per week.⁽¹⁸⁾ n the case of overtime, the employer must meet relevant conditions, such as obtaining the employee’s consent, ensuring that the overtime does not exceed 50% of the regular working hours, and providing compensatory rest after extended overtime periods.⁽¹⁹⁾ For jobs with special characteristics, the regulations on working hours and rest periods may differ based on the nature of the work. Among the sectors with special types of work listed in Article 116 of the Labor Code 2019, Ministries and agencies have issued specific regulations on working and resting hours, particularly for the railway transport sector, offshore oil and gas exploration and exploitation, and seasonal or contract-based manufacturing work. 

2. Considerations for companies regarding forced labor 

In order to prevent and address the risks of forced labor, companies should invest appropriate attention and implement compliance evaluation and monitoring measures as follows:  

2.1. Implementing a transparent recruitment process 

• Provide full and truthful information about the nature of the work and working conditions in job advertisements/announcements, when communicating with job seekers, and during interviews.  

• Do not charge fees related to the recruitment process, whether directly or indirectly. Costs related to visa processing, work permits for foreign employees, and fees of labor service companies should be borne by the employers, not by the employees.  

• Do not require employees to pay deposits when starting work. 

• In case of recruiting employees through recruitment agencies or labor supply companies, the employers should choose companies licensed by labor authorities and take measures to ensure that employees do not bear the costs related to recruitment. 

• The labor contract must include all mandatory content as required by law, ensuring that employees read and understand it clearly. 

• Do not confiscate or force employees to surrender their personal documents. 

2.2. Complying with regulations during employment 

• Pay wages on time and directly to the employees, adhering to the minimum wage requirements in the locality. Avoid withholding wages or delaying payment to bind employees. Only deduct wages as prescribed by labor law. 

• Ensure working hours and rest periods comply with legal requirements. Ensure employees agree to work overtime, and only arrange overtime within the limits and conditions allowed by law. 

2.3. Establishing internal policies on labor rights 

• Companies should proactively develop policies regarding labor rights, which strictly prohibit all forms of forced labor as well as specific measures and guidelines to prevent violations of forced labor.  

• Organize training for the companies’ employees. 

• Disseminate these policies to all partners and suppliers. 

2.4. Establishing a complaints and grievance mechanism 

• Develop an internal process to address employee complaints, including complaints related to forced labor, and commit to addressing all complaints seriously. 

Based on the provisions of ILO Convention No. 29 on Forced Labor and ILO Convention No. 105 on the Abolition of Forced Labor, Vietnamese labor law has generally adopted regulations that align with international agreements. The prevention and combat of forced labor is not only an ethical requirement but also a mandatory legal obligation for companies in the era of globalization. Proactively reviewing and updating policies, raising awareness, and effectively controlling related risks will help companies not only comply with the law but also enhance their competitive position in both domestic and international markets. 

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⁽¹⁾ Vietnam officially became a member of the ILO in 1992.

⁽²⁾ Vietnam ratified Convention No. 29 in 2007.

⁽³⁾ On June 8, 2020, the National Assembly officially passed a resolution ratifying the ILO Convention No. 105 on the Abolition of Forced Labor.

⁽⁴⁾ ILO (2014), ILO Indicators of forced labor, p.3.

⁽⁵⁾ ILO (2014), ILO Indicators of forced labor, p.7.

⁽⁶⁾ Article 157 Penal Code 2015.

⁽⁷⁾ Article 3 Labor Code 2019.

⁽⁸⁾ Article 5 Labor Code 2019.

⁽⁹⁾ Article 6 Labor Code 2019.

⁽¹⁰⁾ Clause 2 Article 35 Labor Code 2019.

⁽¹¹⁾ Clause 1 Article 127 Labor Code 2019.

⁽¹²⁾ Clause 1 Article 17 Labor Code 2019.

⁽¹³⁾ Clause 4 Article 97 Labor Code 2019. 

⁽¹⁴⁾ Point b Clause 2 Article 35 Labor Code 2019.

⁽¹⁵⁾ ILO (2014), ILO Indicators of forced labor, p.21.

⁽¹⁶⁾ Clause 1 Article 16 Labor Code 2019.

⁽¹⁷⁾ Point a Clause 2 Article 35 Labor Code 2019.

⁽¹⁸⁾ Clause 1 Article 105 Labor Code 2019.

⁽¹⁸⁾ Clause 2 Article 107 Labor Code 2019. 

Disclaimers:

This article is for general information purposes only and is not intended to provide any legal advice for any particular case. The legal provisions referenced in the content are in effect at the time of publication but may have expired at the time you read the content. We therefore advise that you always consult a professional consultant before applying any content.

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Apolat Legal is a law firm in Vietnam with experience and capacity to provide consulting services related to Business and Investment and contact our team of lawyers in Vietnam via email info@apolatlegal.com.

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