If the company’s charter is regarded as the fundamental document governing the operation of the enterprise and the relationships among its members, shareholders, and managers, then the Internal Labor Regulations are likewise considered an indispensable instrument for ensuring employees’ compliance within the enterprise. Therefore, in recent times, it can be observed that many enterprises, although falling within the cases where the issuance of Internal Labor Regulations is mandatory, have chosen to formulate such Regulations together with other internal rules, policies, and procedures from the outset of their establishment, in order to maintain compliance and in light of the requirements under the Personal Data Protection Law. To gain a clearer understanding of why the formulation of Internal Labor Regulations has become a matter of concern for enterprises, please refer to our analysis below.
1. Are internal labor regulations mandatory?
Pursuant to the provisions of labor law and the relevant implementing decrees, an enterprise is required to issue Internal Labor Regulations in writing if it employs ten or more employees. In cases where the enterprise employs ten or fewer employees, it may, at its discretion, choose whether or not to promulgate such Regulations. However, if an enterprise with fewer than ten employees does not adopt Internal Labor Regulations, the employment contracts must contain provisions on labor discipline and material liability, which shall serve as the legal basis for application in the course of labor management.
In addition, under the provisions of labor law, an enterprise shall not be permitted to impose labor disciplinary measures in cases where the employee’s misconduct is not stipulated in the Internal Labor Regulations (where such Regulations have been promulgated), or not provided for in the employment contract in cases where no Internal Labor Regulations are in place. In practice, acts of disciplinary misconduct, the extent of their impact, and the corresponding disciplinary sanctions are not uniform among employees. Rather, they vary depending on the employee’s position, role, and the importance of such position, as well as the degree of damage caused to the enterprise, thereby resulting in different forms of disciplinary measures. Therefore, if such provisions are stipulated solely in the labor contract, they will not be sufficiently comprehensive, and the enterprise will be unable to establish a standardized labor contract template. Instead, it would be compelled to adjust the contractual terms regarding violations, disciplinary measures, and material liability in the individual contracts of different employees.
In cases where the enterprise is able to exercise control over the issuance of labor contracts as well as the inclusion of the aforementioned provisions therein, and employs fewer than ten employees, the enterprise may consider postponing the promulgation and registration of internal labor regulations until it meets the statutory personnel threshold. Conversely, where management is unable to maintain such control, the formulation and registration of internal labor regulations with the competent authority becomes necessary in order to mitigate potential risks and disputes.
2. Fundamental provisions required in Internal labor regulations
The Internal Labor Regulations must contain all the principal contents as prescribed by labor law, including working hours and rest periods; workplace order; occupational safety and hygiene; prevention of sexual harassment in the workplace, as well as the procedures and processes for handling acts of sexual harassment in the workplace; protection of the employer’s property, business secrets, technological secrets, and intellectual property; circumstances in which the employee may be temporarily reassigned to perform work other than as stipulated in the labor contract; acts constituting violations of labor discipline and forms of disciplinary measures; material liability; and persons having authority to impose labor disciplinary measures. However, when formulating internal labor regulations, we always recommend that enterprises structure such regulations as follows in order to ensure both comprehensive applicability in practice and the inclusion of all statutory contents required for internal labor regulations, specifically:
Scope – Subjects – Definition of Terms
A standard labor regulation cannot be deemed complete without provisions determining its scope of application and the entities subject to its governance. The inclusion of defined terms ensures a uniform interpretation among all company personnel and guarantees compliance in line with the company’s intent upon promulgation. Typical concepts requiring clarification include: conflict of interest, company assets, personal data, and confidential information. Furthermore, it is essential to specify the entities and areas to which the labor regulation applies—particularly in cases where an enterprise operates multiple subsidiaries, branches, or even overseas subsidiaries—to ensure clarity as to which subjects are governed by such regulation.
Working hours, rest periods, annual leave, overtime, on-call duties, and night work…
In practice, certain companies’ internal labor regulations only stipulate the daily working hours, such as the start time and end time. However, such a provision alone is insufficient, as enterprises must determine working hours and rest periods in accordance with their operational model and the nature of their workforce, ranging from office staff to production staff and field personnel. This determination also serves as the basis for establishing the wage structure. In the absence of a clear specification, enterprises may face excessive overtime, increased costs, or internal labor disputes when the company fails to clearly classify additional working hours as overtime.
Corresponding to working hours, rest periods, annual leave, and unpaid leave are the procedures and mechanisms for approving such time off for employees in each specific case. Failure to comply with the company’s established procedures shall also be considered a violation of the labor regulations, as well as taking leave without a legitimate reason. Therefore, the labor regulations should not merely specify the time frames but must also set out the mechanisms for managing these matters.
Workplace Order, Safety, and Hygiene
Not merely general provisions, the labor regulations shall be based on the company’s operational activities and the potential risks to occupational safety, thereby stipulating rules on workplace order, safety, and hygiene, along with the accompanying management mechanisms, such as: regulations on controlling access, bringing in assets, and transferring information outside controlled areas; regulations on personal protective equipment, including the corresponding sanctions for non-compliance; mechanisms for fire prevention and safety control at the workplace; procedures for reporting incidents; and obligations to participate in periodic training programs.
Workplace Sexual Harassment Prevention and Control
This is a matter that many Vietnamese enterprises previously avoided, but it is now a mandatory legal requirement. A large enterprise cannot simply state “sexual harassment is prohibited.” The labor regulations must: provide a clear definition and examples of prohibited conduct; establish confidential reporting channels (dedicated email, hotline, suggestion box); stipulate processing timeframes, as well as protections for victims and whistleblowers; and explicitly prohibit any acts of retaliation or discrimination.
Currently, large enterprises place great emphasis on this issue; therefore, the provisions should not be merely formalities but must include mechanisms for immediate action to protect employees and prevent reputational damage to the enterprise caused by media exposure.
Protection of Company Property and Confidential Information
In the context of the digital economy, the concept of “company property” is no longer limited to factories, machinery, or raw materials. The core value of many enterprises today lies in customer data, software source code, technological secrets, business strategies, intellectual property, and personal data. Although intangible, these assets directly determine a company’s competitiveness and market valuation. In practice, enterprises also have commitments to customers, partners, and governmental authorities regarding the maintenance of information confidentiality.
Therefore, the labor regulations should not merely stipulate that “employees must protect company property and shall not disclose confidential company information.” They must also specify the criteria for identifying company assets, define which information is considered confidential or requires protection, determine who is authorized to access such information, establish principles for the use and safekeeping of assets, set out data protection mechanisms, and outline prohibited conduct along with the corresponding enforcement measures. In practice, many serious disputes arise from former employees taking customer data, formulas, or pricing information to competing companies. If the labor regulations do not contain specific provisions, the enterprise virtually has no legal basis to claim compensation or impose disciplinary measures. Conversely, when the labor regulations are carefully drafted, the enterprise can demonstrate the employee’s confidentiality obligations and protect its legitimate interests before courts or arbitration tribunals.
In addition to the aforementioned content, when developing labor regulations, enterprises must also pay attention to other matters, such as temporarily assigning employees to different tasks, procedures for handling labor discipline, authority to impose sanctions, and commitments regarding employees’ personal data. All these elements, when anticipated, properly drafted, communicated internally, and fully registered with the competent authorities, form a solid foundation for effective human resource management. For more detailed information on the remaining content that should be included in labor regulations, please refer to the article “Labor Regulations – Are They Truly Necessary for Businesses and Guidelines for Drafting (Part 2).”
Time of writing: 19/08/2025
The article contains general information which is of reference value, in case you want to receive legal opinions on issues you need clarification on, please get in touch with our Lawyer at info@cdlaf.vn
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