Enterprises's confusions and mistakes in the process of developing internal labor regulations

Internal labor regulations are an important document in the operation of an enterprise, clearly stipulating the rights and obligations of employees and employers (“enterprises”). However, in the process of developing these regulations, many enterprises remain confused or make regrettable mistakes that affect their own operations or even lead to unnecessary labor disputes. In this article, we will analyze the common mistakes that enterprises often encounter in the process of developing Internal labor regulations, while also providing some recommendations to help enterprises comply with legal regulations and build an effective working environment.

Common mistakes when developing Internal labor regulations

First, on cases where Internal labor regulations must be developed and issued

In general, enterprises recognize the practical benefits of Internal labor regulations to ensure labor order in production and business activities. However, some enterprises, especially small enterprises, have not yet recognized that the construction and issuance of Internal labor regulations within the unit is also a mandatory obligation in certain cases. Specifically, Clauses 1 and 3 of Article 118 of the Labor Code 2019 require that when employing 10 or more employees, the enterprise must issue written Internal labor regulations and consult with the worker’s representative organization at the facility (if any). It can be seen that currently, some enterprises, even though they have more than 10 employees working, still deliberately ignore the issuance of Internal labor regulations or only notify them verbally or only incorporate them into the labor contract^[1]. This is against the law. This violation may be subject to administrative sanctions with a fine ranging from 10,000,000 VND to 20,000,000 VND^[2]. Riskier, if labor discipline arises, businesses that do not issue Internal labor regulations will not have a satisfactory legal  ^[3].

Second, regarding the registration of Internal labor regulations

In order to ensure the legitimate rights of employees and the responsibility of enterprises in complying with legal regulations, after issuing Internal labor regulations, enterprises must register Internal labor regulations at the specialized labor agency under the provincial People's Committee within 10 days from the date of issuance of the regulations^[4]. In reality, some enterprises currently only issue Internal labor regulations without registering, which might be due to not understanding the mandatory registration deadline or intentionally ignore the registration with the competent authority. This violation may lead to the possibility of being administratively sanctioned as stated in the provisions of law. Accordingly, Decree 12/2022/ND-CP stipulates a fine of 10,000,000 VND to 20,000,000 VND for the act of not registering Internal labor regulations pursuant to the provisions of Law of Enterprises^[5]. Furthermore, it should be noted that after 15 days from the date the competent authority receives the complete registration dossier, the Internal labor regulations will take effect, except in cases where less than 10 employees are employed, the effectiveness will be decided by the enterprise in the Internal labor regulations (if the regulations are issued in writing).

Third, regarding the procedure for notifying Internal labor regulations

According to Clause 4, Article 118 of the Labor Code 2019, the registered and effective Internal labor regulations must be notified to employees and the main contents must be posted in necessary places at the workplace. However, current laws do not clearly stipulate the specific time limit for enterprises to fulfil this obligation. In our opinion, Internal labor regulations need to be notified immediately after they officially come into effect. In case an enterprise violates the obligation to notify or publicly post Internal labor regulations, administrative sanctions might be applied with a fine of 2,000,000 VND to 6,000,000 VND^[6].

Fourth, regarding the content of Internal labor regulations

Each enterprise will have different regulations to suit its conditions and business activities, but the enterprise must ensure that the issued regulations do not violate the provisions of the law and must have the following basic contents: (i) Working hours, rest period; (ii) Order in the workplace; (iii) Labor safety and hygiene; (iv) Prevention of sexual harassment in the workplace; (v) Protection of assets and business secrets, technology secrets, and intellectual property of the enterprise; (vi) Temporary transfer of employees to work other than those specified in the labor contract; (vii) Violations and forms of labor discipline; (viii) Material responsibility; and (ix) Persons with the authority to handle labor discipline^[7]. However, some enterprises that issue Internal labor regulations only focus on regulations such as working hours and labor discipline, omitting mandatory contents in Internal labor regulations in accordance with the law or sometimes not specifying in detail as prescribed in Clause 2, Article 69 of Decree 145/2020/ND-CP.

In addition, labor laws still have shortcomings that make it difficult for enterprises in the process of developing Internal labor regulations. A typical example is the issuance of regulations related to preventing and combating sexual harassment in the workplace. Although current laws have more detailed regulations on this issue, they are only suggestive and quite general, leading to enterprises being confused in issuing regulations to identify sexual harassment in the workplace. Some enterprises have issued general regulations to anticipate possible future situations such as “other behaviors implying sexual intent”, but these regulations are often difficult to be accepted by competent authorities, or may require enterprises to adjust them when registering Internal labor regulations.

Moreover, according to Decree 145/2020/ND-CP, enterprises need to establish a separate, strict and complete internal handling procedure, including responsibilities, time limits, procedures for complaints, denunciations and settlement of complaints and denunciations related to receiving and handling sexual harassment in the workplace. In response to this requirement, enterprises must clearly understand and adhere to legal regulations, and additionally, need to refer to some guiding documents such as the Code of Conduct on Sexual Harassment in the Workplace issued by the Ministry of Labor - Invalids and Social Affairs in 2015 to develop appropriate Internal labor regulations^[8].

Some solutions for enterprises

To overcome common errors and confusion in the process of developing Internal labor regulations, enterprises should pay attention to some of the following solutions.

First of all, enterprises need to focus on developing and promulgating Internal labor regulations in accordance with legal regulations to ensure the rights of businesses and employees. This is the basis for minimizing legal risks that may arise during the implementation of labor contracts. For enterprises with 10 or more employees, the promulgation of written Internal labor regulations is mandatory and they must consult with the worker’s representative organization at the facility. At the same time, after promulgation, Internal labor regulations must be registered with the specialized labor agency under the Provincial People's Committee within 10 days. Enterprises should plan and monitor the registration deadline to avoid unnecessary administrative sanctions.

Next, it is very important to announce the Internal labor regulations to all employees. The Internal labor regulations need to be publicly posted in visible areas and announced to all employees. Enterprises should also organize meetings to update and discuss the regulations and issue handbooks recording the main regulations to ensure that employees understand them clearly. Regarding the content, enterprises must ensure that the Internal labor regulations include mandatory provisions according to regulations. In particular, when developing regulations on sexual harassment, enterprises need to refer to guidance documents from competent authorities such as the Ministry of Labor - Invalids and Social Affairs or local labor agencies to issue appropriate regulations.

Overall, at present, the awareness of compliance with labor laws in general and the establishment of Internal labor regulations in particular have been improved. However, there are still some enterprises that do not fully understand the regulations or deliberately avoid complying with the provisions of the law on Internal labor regulations. In addition, the legal system still has some obstacles that make enterprises confused in implementing them in practice. Therefore, we believe that enterprises should pay more attention to building Internal labor regulations, ensuring compliance with the law, transparency and clarity in regulations, in order to create conditions for a stable, effective and sustainable working environment.