COVID-19 has resulted in an inevitable global shutdown frustrating businesses, investors, supply chains and Human Resource (HR) functions.
What started out as limited business disruption due to the low number of cases has now affected most if not all businesses. While Vietnam has controlled the pandemic relatively well, the government on March 31 issued Directive No. 16/CT/TTg – its strongest measures yet on social distancing nationwide until April 15. The directives also states that factories and businesses providing essential goods can remain open.
Two major concerns of our clients in Vietnam are labor shortages, and disruptions to supply chains.
If factories stop production for an extended period it impacts supply chains and the flow of materials. For example, Ford and Honda have already suspended production in Vietnam due to the difficulties faced by COVID-19, while Samsung also facing challenges acquiring raw inputs for production.
Global businesses need to stay on top of the viability of receiving and sending shipments, this may mean identifying new suppliers or revising sales forecasts.
We recommend that now is an ideal time to conduct a health check on your business to assess potential risks and impacts.
We advise our clients to carefully assess their exposure and communicate closely with suppliers or customers and be well prepared to assess their stock levels, cash flow and human resources in the event the situation worsens.
Businesses should also have clear disaster recovery and business continuity plans in place.
In this Q&A with Trent Davies, International Business Advisory Manager, Dezan Shira & Associates, Ho Chi Minh City, we focus on the HR challenges businesses may face during this time.
From a labor law perspective, how do you recommend companies manage employee absence?
The immediate impact is that many staff are unable to return to work or choose to work from home. In Vietnam, given the school closures we have had to be much more flexible with staff working from home. Some companies are helping to prevent the spread of the disease by promoting the washing of hands, supplying masks, and disabling fingerprint scanners.
It is important for businesses to be prepared if the outbreak worsens. This includes having a thorough understanding of employee and employer rights and being prepared to be understaffed.
We also encourage companies to consider remote working solutions if this does happen. Internally we use many cloud-based software programs to enable people to be flexible.
Have there been any official directions from the government regarding labor due to the virus?
The Ministry of Labor introduced Official Letter 1064/LĐTBXH-QHLĐTL on March 25 guiding salary and other payments in accordance with current laws while the Prime Minister released Directive No. 11/CT-TTg giving instruction to the relevant labor agencies to alleviate challenges faced due to the epidemic.
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This article is produced by Vietnam Briefing, a premium source of information for investors looking to set up and conduct business in Vietnam. The site is a publishing arm of Dezan Shira & Associates, a leading foreign investment consultancy in Asia with over 27 years of experience assisting businesses with market entry, site selection, legal, tax, accounting, HR and payroll services throughout the region.
Dezan Shira & Associates is pleased to introduce our Covid-19 portal, dedicated to providing businesses with an extensive roundup of the latest developments, policy updates, and solutions to help manage your business operation during the outbreak. Checking in daily to keep up to date with new updates!
