SALARY CUT DECISION 2023

According to salary payment rules in Article 94 of the Labour Code 2019, the Employer shall directly, fully and punctually pay salaries to their employees as agreed in the Employment Contract. However, in the situation of facing financial difficulties, the Employer can cut the employee’s salary costs in accordance with the law in 02 (two) following cases:

Case 1. Agreement to amend salary content in the employment contract

Clause 1, Article 95 of the Labour Code 2019 stipulates: “The employer shall pay the employee on the basis of the agreed salary, productivity and work quality”.

Article 33 of the Labour Code 2019 provides for amendments and supplements to employment contract as follows:

“1. During the performance of an employment contract, any party who wishes to revise the employment contract shall notify the other party of the revisions at least 03 working days in advance.

2. In case where an agreement is reached between the parties, the revisions shall be made by signing an annex to the employment contract or signing a new employment contract.

3. In case the two parties fail to reach an agreement on the revisions, they shall continue to perform the existing employment contract”.

Employment contracts are created and signed based on the agreement between the employee and the employer. Stemming from that agreement, the law still allows the parties to amend and supplement the contract content during the contract performance. Thus, if the Employer wants to cut the Employee’s salary, the Employer shall inform the Employee at least 03 (three) days in advance. If the Employee agrees to share the difficulties by cutting the salary, the parties can agree to sign a contract annex or sign a new contract to adjust the salary. However, in case the Employee does not agree to cut salary, the Employer shall still pay the Employee’s salary as agreed in the signed employment contract but cannot arbitrarily cut the Employee’s salary.

Case 2. Transferring the employee to do other work than in the employment contract

Pursuant to the provisions of Clause 1, Article 29 of the Labour Code 2019, in the event of sudden difficulties such as major epidemics, the Employer is entitled to temporarily transfer the Employee to do other work than in the employment contract. However, the time of transferring the Employee shall ensure:

• No more than 60 cumulative days/01 year.
• More than 60 cumulative days/01 year: Should be agreed in writing by the employee.

Besides that, according to the provisions of Clause 2 of this Article, when temporarily transferring the Employee to do other work than in the employment contract, the Employer shall inform the employee at least 03 working days in advance, specify the temporary working period and only assign works that are suitable for the employee’s health and gender.

When being transferred to do another work, the Employee will be paid according to the new work. This new work is allowed to pay a smaller salary than the previous one, but it shall still comply with Clause 3, Article 29 of the Labour Code 2019, specifically as follows:

• Keep the previous work salary for a period of 30 working days.
• The salary according to the new work should be at least 85% of the salary of the previous work and not and not smaller than the minimum wages.

Thus, this case is only applicable for a short time, but if it is to be long-term, it still needs to have written approval from the employee. After receiving this approval, the employer can proceed to issue a Job rotation decision together with a Salary cut decision or can refer to the salary cut as a separate article in the Job rotation decision. Lac Duy & Associates would like to send Readers the latest Salary cut decision form in 2021, including the following main contents:

• Information about the decision-making organization;
• Information about the person whose salary is cut;
• Reason for a salary cut.

COMPANY NAME……	THE SOCIALIST REPUBLIC OF VIETNAM Independence – Freedom – Happiness —————-
No: … / QD – …	… … date … …month… …year… …

DECISION ON SALARY CUT

DIRETOR OF COMPANY………

– Pursuant to the Labour Code No. 45/2019/QH14 dated November 20, 2019;

– Pursuant to the Salary Regulations and the Company’s Charter;

– Pursuant to the Labour Regulations of the Company and the Labour Contract signed between the Company and all employees;

– Pursuant to the approval of Mr./Mrs.…………………… on the ……………………;

DECISION:

Article 1. Subjects of the decision

Mr./Mrs.:………………………………………………………………………………

Date of birth: ………………. Gender: …………….…… Nationality: ………………

Position: ………………………………….. Department: …………………………….

Article 2. Content of the decision

Reason for the cut: ………………………………………………………………….

– Previous salary: …………………………………………………………………………..

– From the date … month … year …, the main salary of Mr./Mrs.…….will be: …….

Article 3. Terms of implementation

The Finance and Accounting Department, the Human Resources Department, the relevant departments, and Mr. /Mrs.: ……………………. are responsible for the implementation of this Decision.

Article 4. This Decision takes effect from the date of signing./.

Receiving place:	Managing Director
– As Article 1; – Save HCNS; – Save VP./.	(Sign and write full name)

The above is information about the cases in which the Employer is entitled to cut the Employee’s salary and Salary cut decision form in accordance with the current provisions of Vietnamese law in 2021. In case you need detailed or other information in related fields, Readers can contact Lac Duy & Associates for timely support.