HUMAN RESOURCE MANAGEMENT AND RESOLUTION OF LEGAL PROBLEMS DURING AND AFTER THE PANDEMIC
14:58 - DepBenVung

HUMAN RESOURCE MANAGEMENT AND RESOLUTION OF LEGAL PROBLEMS DURING AND AFTER THE PANDEMIC

According to a detailed assessment report on the impact of the COVID-19 pandemic on 23 domestic manufacturing sectors announced by SSI Securities Company recently, the textiles, retail, fisheries, beer, oil and gas, securities, seaports – transportation, aviation and airport services sectors are hit hardest by regulations to prevent the pandemic, causing a crisis due to export stagnation and revenue slump. A series of legal and human resource management issues are thorny problems for enterprises at the moment.

Amid existential problems in the COVID-19 pandemic, Saigon Economic Times, Ho Chi Minh City Young Entrepreneurs Association and COLORBOND® steel – a premium product brand of NS BlueScope Vietnam organized a series of 5 online webinars “Supporting enterprises to overcome the pandemic”. The first two livestream webinars have attracted more than 150,000 views with thousands of questions being sent to the organizers. During these two online sessions, the speakers answered questions from enterprises in two key areas “Human resource management solution during and after the pandemic” and “Legal issues around the COVID-19 pandemic”.

Restructuring production and reducing working hours to pay workers

At the webinar “Human resource management solution during and after the pandemic”, Mr. Pham Van Viet, General Director of Viet Thang Jean and Vice Chairman of Ho Chi Minh City Textile and Garment Association said that textile and garment is one of the hardest hit in Vietnam due to the large labor force. In March, EU and US customers announced delaying orders from 3 weeks to 1 month. The remaining markets including Japan, South Korea and ASEAN countries also suffered a decrease in purchasing power due to the pandemic. However, about 50% of enterprises have promptly shifted to the production the pandemic.

Mr. Pham Van Viet- General Director of Viet Thang Jean and Vice Chairman of Ho Chi Minh City Textile and Garment Association –

However, about 50% of enterprises have promptly shifted to the production of masks and labor protective gear to create more jobs for workers to sustain. As a result, the sector keep operation and workers are paid a minimum wage of 2-4 million VND/month.

Apart from textiles, many other sectors ranging from aviation, tourism, to service sectors are also facing challenges arising from the impact of COVID-19. As a human resource expert, Ms. Tieu Yen Trinh proposed that enterprises are supposed to rethink of the cash flow and expenses, in which the human resource scenario plays a very important role. Specifically:

  • If enterprises suffer a loss of 70% or more, they need to cut staff benefits and investment expenses.
  • In case of more losses, it is necessary to implement flexible policies on wages, benefits and jobs of laborer.
  • The last resort is that workers temporarily stay at home for a few months without pay. Salary cuts are applied to management levels and then to lower positions. In this case, it should be done in a transparent, fair and skillful communication manner
  • In the worst case scenario, if enterprises close, they need to have a budget to deal with related costs.

From the perspective of a labor lawyer, Mr. Tran Ngoc Thich said that due to the difficulties caused by COVID-19 to the economy, the Government and localities also have timely policies on supporting employees:

  • In case enterprises have difficulties and cannot continue production and business activities, there are instructions if laborers are forced to stop working. Specifically, according to Decision No.595/QD-BHXH, the social insurance will adjust on the severance pay, then the enterprise will carry out the procedures as prescribed…
  • For an employee who has a labor contract terminated but is ineligible for unemployment benefits or does not enter into a labor contract, when losing his/her job, he/she shall be supported 1 million VND/person/month depending on the actual situation of the pandemic (but not exceeding 3 months)

Flexible handling of contractual legal issues

At the webinar “Legal issues around the COVID-19 pandemic”, Mr. Tran Thanh Tung, lawyer of Global Vietnam Lawyer Firm and Mr. Tran Vo Quoc Son, member of Ho Chi Minh City Lawyer Association, Chief Counsel of Samsung Electronics Vietnam Co., Ltd. shared details about legal issues that enterprises encounter during the pandemic.

In the context of many import partners asking for postponement, cancellation or slow delivery because these countries lock down, Lawyer Tran Thanh Tung said that enterprises can consider COVID-19 as a force majeure and contract suspension because of three factors:

  • Objective factor
  • Force majeure
  • Irreparable

Of these three factors, enterprises must argue on factors proving irreparable and to apply the force majeure clause in the contract.

However, in practice, this provision is associated with numerous difficulties given specific context. Lawyer Tran Vo Quoc Son, Member of Ho Chi Minh City Lawyer Association, Chief Counsel of Samsung Electronics Vietnam Co., Ltd. for the proposal:

Mr. Tran Vo Quoc Son- member of Ho Chi Minh City Lawyer Association, Chief Counsel of Samsung Electronics Vietnam Co., Ltd

  • It is also an art to prove that a contract cannot be performed, including soft power and persuasive ways.
  • It takes objectivity to address our desires.

Also according to Lawyer Tran Vo Quoc Son, when drafting a contract, many enterprises often “uncompromise” force majeure conditions and only list force majeure of natural disasters, epidemics but forget that each country, each treaty and international treaty provide for force majeure very differently. Specifically, in the world, there are Convention on International Trade in Goods – CISG and the United States Trade Code on UCC and each country has different national laws.

  • With CISG – hardly discussing the force majeure but just the difficult terms of the contract and changing circumstances.
  • UCC does not discuss this much but how to effectively terminate the contract.

“So we have to formulate a contract on which situation is force majeure, what happens when it happens?”, Lawyer Tran Vo Quoc Son commented from his own experience…

Another important point that enterprises are interested in is how to handle “force majeure” but still maintain relationships with customers. For this matter, Lawyer Tran Thanh Tung proposed that the parties’ interests should be considered benefits of each other because benefits are the core of a contract.

“A contract is not created naturally but in a specific context. In case of changes, the parties have the right to negotiate to change the content to suit the new situation. If not, then apply to ask the court to adjust the contract, which is the only case that the court can revise the contract between the parties. If the court has already adjusted it, it is fair to continue the contract or to terminate the contract. That is the legal way to negotiate with a partner”- Mr. Tung said.

According to the Ministry of Planning and Investment, in the first quarter of 2020, up to 40,000 enterprises were dissolved, not to mention businesses operating in moderation. These figures show that the impact of the pandemic is very clear and it is high time for every enterprise to find its own direction. And the financial problem is one of the most headache problems for business owners, because in case of just losing liquidity, many enterprises will face bankruptcy. Therefore, the livestream webinar No. 3 with the topic “FINANCIAL MANAGEMENT DURING & AFTER THE PANDEMIC”at 10:30 am on 08/05/2020 at the fanpage of Ton colorbond and The Saigon Times, together with 3 special guests, will address this issue in detail.

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