Annual leave coming in use as of 2021: 4 new regulations employees should notice

1. Days of annual leave in effect as of 2021

Pursuant to Article 113 of the 2019 Labor Code, regulations regarding employee’s annual leave are set out as follows:

- If an employee works for an employer for 12 months or more, he/she will be entitled to fully-paid annual leave as prescribed in the labor contract, including:

+ If he/she works in normal condition, he/she will be entitled to 12 days of leave;

+ If he/she is underage, disabled, work under arduous, toxic and hazardous condition, he/she will be entitled to 14 days of leave (pursuant to the 2012 Labor Code currently in force, if employees work under harsh living condition, they will also be entitled to 14 days of leave).

+ If he/she works under extremely heavy, hazardous or dangerous condition, he/she will be entitled to 16 days of leave (pursuant to point c of Article 11 in the 2012 Labor Code currently in force, this regulation is applied to those under extremely harsh living condition).

- If he/she has not yet worked for 12 months in full for a single employer, he/she will be entitled to the number of days of annual leave in proportion to the number of their working months.

- If he/she has worked for an employer for 5 years in full, the number of days of leave that he/she is entitled to receive will be increased by 1 day. 

- If he/she has not yet taken annual leave or has certain days of annual leave left due to his/her resignation or dismissal, he/she may receive salary or wage paid during these days from his/her employer.

- He/she may negotiate with his/her employer on taking annual leave in multiple times a year or taking all days-off accrued every 3 years at maximum. 

- When going on annual leave, if he/she spends more than 2 days for a round trip on board means of road, rail or waterway transport, from the 3^rd day of such trip onwards, the traveling time will be included in the annual leave only once a year.

2. Regarding the service time length used for calculation of the number of days of annual leave

Pursuant to regulations laid down in Article 65 of the Decree No. 145/2020/ND-CP, an employee’s working time length is divided into 10 periods qualifying him/her certain days of annual leave, specifically including:

- His/her vocational training or practice period prescribed under Article 61 in the Labor Code which will be counted if he/she continues to work for his/her employer after its expiry.

- His/her probation period which will be counted if he/she continues to work for his/her employer after its expiry.

- The period of his/her paid personal leave prescribed in clause 1 of Article 115 in the Labor Code.

- The period of his/her unpaid leave which will be counted if his/her employer agrees, but must be no more than 1 month accrued each year.

- The period of his/her leave due to occupational accident or disease which will be counted, but must be no more than 6 months accrued each year.

- The period of his/her sick leave which will be counted, but must be no more than 2 months accrued each year.

- The period of his/her leave covered by maternity and parental insurance benefits under law on social insurance.

- The period of his/her taking on duties assigned by the employee representation organization at his/her workplace if such period is accepted as part of the working time length prescribed in laws.

(Currently, clause 8 of Article 6 in the Decree No. 45/2013/ND-CP prescribes that such period is the time-off for participation in trade union activities under laws on trade unions).

- The period of his/her suspension or dismissal from work through his/her fault.

- The period during which he/she is temporarily suspended from work, but then is proved not guilty or is not subject to labor disciplinary actions.

(The regulation saying “the period of custody or temporary detention during which employees are allowed to get back to work because competent regulatory authorities judge them not guilty" in clause 11 of Article 6 in the Decree No. 45/2013/ND-CP is abolished).

3. Method of calculation of annual leave in certain special cases

Pursuant to Article 66 in the Decree No. 145/2020/ND-CP, annual leave in certain special cases is calculated according to the method regulated as follows:

- The number of days of annual leave granted to an employee working for less than 12 months under clause 2 of Article 113 in the Labor Code is defined as the statutory number of days of annual leave plus the number of days of leave increased depending on his/her seniority (if any), divided by 12 months, multiplied by the actual number of working months each year.

- If an employee works for less than a month, and the sum of his/her working days and paid days-off (e.g. public holidays, lunar/solar calendar new year’s holidays, personal leave prescribed in Article 112, 113, 114 and 115 in the Labor Code) makes up at least 50% of the number of normal working days each month under the contract in effect, that month will be deemed as 01 working month used for calculation of the number of days of annual leave.

(This is a new supplement)

- Total time length of an employee’s working at a public-sector entity and unit or a state enterprise will be calculated as the working period used for calculating the incremental number of days of annual leave prescribed in Article 114 in the Labor Code if that employee continues to work at such public-sector entity and unit or state enterprise.

(This is a new supplement)

4. Travel costs, pay and annual holiday pay

Article 67 of the Decree No. 145/2020/ND-CP, travel costs, pay and annual holiday pay are regulated as follows:

- Travel costs or pay during trip days other than days of annual leave as prescribed in clause 6 of Article 113 in the Labor Code must be negotiated to reach agreements between contracting parties.

- Pay serving as a basis for paying employees during days of annual leave is the contractual amount existing at the time of an employee’s taking annual leave.

(Current regulations laid down in clause 2 of Article 26 in the Decree No. 05/2015/ND-CP prescribe that the pay serving as a basis for paying employees during days of annual leave in Article 111; days of annual leave increased depending on seniority in Article 112;… are the contractual pay in the preceding month, divided by the number of normal working days in that month under employer’s regulations, multiplied by the number of days of annual leave, additional days of annual leave determined depending on seniority). 

- The pay serving as a basis for paying employees during days of annual leave that they have not taken yet or that are left according to clause 3 of Article 113 in the Labor Code is the contractual amount existing in the month preceding the month of resignation or dismissal.

(According to current regulations laid down in clause 3 of Article 26 in the Decree No. 05/2015/ND-CP, the pay serving as a basis for paying employees during days of annual leave that they have not taken yet or that are left as per Article 114 in the Labor Code is regulated as follows:

+ If an employee works for at least 6 months, it will be the average pay agreed upon in the contract in 6 months preceding the month of resignation or dismissal. If an employee has not yet taken annual leave or there are residual days of his/her annual leave due to other causes, it will be the average pay agreed upon in the contract in 6 months preceding the time when his/her employer pays him/her for the residual number of days of annual leave;

+ If an employee works for less than 6 months, it will be the average pay agreed upon in the contract during his whole working period).

Above is the summary of new regulations regarding employees’ annual leave applicable as of 2021 in the Decree No. 145/2020/ND-CP.

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