Enterprises must comply with signed labor contracts. In case there is an adjustment to working time and salary, it should be agreed with the employee.

Legal grounds:

• Labor Code 2019;
• Decree No. 12/2022/ND-CP.

Due to the general difficulties of the economy, many businesses have suffered a decline in orders, leading to insufficient jobs for workers. Some businesses choose the solution of letting workers take leave on a rotating basis. So can businesses cut employee salaries in this case?

1. Can the company temporarily lay off employees? have to pay salary?

In principle, businesses must comply with the labor contracts signed with employees, so businesses are not allowed to unilateral let employees take unpaid leave to wait for work.

When an enterprise temporarily lays off an employee, it is necessary to consider the cause of the incident.

Pursuant to Article 99 of the 2019 Labor Code as follows:

Article 99. Stop-of-work salary

1. In case of work stoppage, employees are paid as follows:
2. If it is the employer’s fault, the employee is paid the full salary according to the labor contract;
3. If it is the employee’s fault, he or she will not be paid; Other employees in the same unit who have to stop working will be paid at a rate agreed upon by both parties but not lower than the minimum wage;
4. If due to electricity or water problems that are not due to the employer’s fault or due to natural disasters, fires, dangerous epidemics, enemy attacks, relocate the operating location at the request of a competent state agency or for economic reasons, the two parties agree on salary for stop-of-work of work as follows:
   1. In case of stopping work for 14 working days or less, the agreed salary for stopping work is not lower than the minimum wage;
   2. In case of stopping work for more than 14 working days, the salary for stopping work will be agreed upon by both parties but must ensure that the salary for stopping work for the first 14 days is not lower than the minimum wage.

According to the above regulations, in cases where an economic recession causes an enterprise to have no jobs for its employees, this can be considered an economic reason as prescribed in Clause 3, Article 99 of the 2019 Labor Code mentinoned above.

Accordingly, businesses can negotiate stop-of-work pay with employees, but must ensure the following minimum salary:

• If stop working for 14 working days or less: the salary for stopping work must not be lower than the minimum wage;
• If stop working for more than 14 working days: the salary for stopping work for the first 14 days is not lower than the minimum wage.

If an enterprise stops a worker from work without paying or does not pay enough stop-of-work wages, the employer will be subject to an administrative fine of between 5 and 50 million VND, depending on the number of workers whose rights are violated according to the provisions of Clause 2, Article 17 of Decree No. 12/2022/ND-CP.

2. Can the company transfer employees to other jobs?

Pursuant to Clause 1, Article 29 of the 2019 Labor Code as follows:

Article 29. Transferring employees to jobs other than the labor contract

1. When encountering unexpected difficulties due to natural disasters, fires, dangerous epidemics, apply measures to prevent and overcome labor accidents, occupational diseases, electricity and water incidents or due to production and business needs. The employer has the right to temporarily transfer the employee to work other than the labor contract but not for more than 60 cumulative working days in 01 year; In case of transferring an employee to a job different from the labor contract for more than 60 cumulative working days in 01 year, this will only be done when the employee agrees in writing.

The employer specifically stipulates in the labor regulations the cases in which due to production and business needs the employer is allowed to temporarily transfer the employee to work other than the labor contract.

According to the above regulations, businesses are only allowed to transfer employees to jobs other than those in the labor contract if:

• Enterprises encounter unexpected difficulties due to natural disasters, fires, dangerous epidemics, apply measures to prevent and overcome labor accidents, occupational diseases, electricity and water incidents;
• Due to production and business needs. This case must be clearly stated in the labor regulations.

Thus, if due to business difficulties or lack of orders, the enterprise wants to transfer the employee to a job other than the labor contract, the labor regulations must specifically stipulate this situation.

Note:

• The time for transferring an employee to another job must not exceed 60 cumulative working days in 1 year;
• If employees are rotated beyond the above mentioned time, the employee’s written consent must be obtained.