Vietnam has managed to keep the COVID-19 outbreak largely under control, but the impact on the economy however, remains uncertain.

Thanks to early and decisive action by the government and a cooperative public, Vietnam has kept the COVID-19 pandemic largely under control, with just 334 cases and zero related deaths reported in the country as of June 16.

The impact on the economy, however, remains uncertain. While Vietnam did its part domestically, the global economic downturn will likely reduce export demand for the country’s previously thriving manufacturing sector, and border closures have hit the tourism and hospitality sectors particularly hard.

Lessons learnt

Still, most employers are optimistic about their recovery prospects, and learned some valuable lessons to protect themselves and their employees in the future:

• Force majeure: While general provisions are set out in Vietnam’s Civil Code and Labour Code, employers may want to ensure that specific events of force majeure, and their consequences, are specified in labour contracts, to remove any ambiguity about the company’s options in an emergency. Having templates on hand for early termination of labour contracts can also help a company react quickly when emergency layoffs are needed.
• Employee benefits: For any non-statutory benefits offered to employees, the employer may clearly state in their labour contracts or company policies that such benefits can be reduced or withdrawn at the employer’s sole discretion. Otherwise, when forced to temporarily suspend benefits as an emergency cost reduction measure (as an alternative to layoffs), the employees can argue that the employers first need to obtain their consent, which can be challenging and time-consuming.
• Working from home: During the April shutdown, many private-sector companies and government agencies were pleased (and perhaps surprised) to discover that Vietnam’s technical infrastructure is now quite conducive to remote working. Employers will likely continue to allow staff to work from home, at least occasionally, to reduce the risk of disease transmission and give employees more freedom at work.

Comment

It seems like Vietnam has been lucky enough not to have been impacted by the COVID-19 pandemic as hard as some other jurisdictions have experienced. Of course, there will be some fallout from the resulting economic downturn, but there are measures that companies can put in place to avoid some of the issues that came to light during the shutdown period or to help manage certain situations better should there be any similar events in the future.