In January 2014, the new Labour Law (2013) was formally approved, replacing the Labour Law (2006). The new law is the result of extensive discussions between the various Lao authorities, private sector entities and development organisations, and introduces a number of changes to the basic rules of employment in Laos, including the employment of foreign workers.
Because the area of employment law is quite vast, this is only a brief discussion of the main topics under the new Labour Law.
|General principles and employer obligations||The employer is obliged to:|
|Internal employment conditions (Work Rules)||The workplace must have its own Internal Regulations, and they must not conflict with the Labour Law. They must be approved by the Labour Administration Authority. The Labour Administration Authority has a template of the Internal Regulations that companies are encouraged to use.|
|Hours of work||Normal hours of work are 6 days a week, no longer than 8 hours a day or 48 hours a week.|
|Overtime||The employer may request the employee to work overtime. When overtime is necessary for more than 45 hours per month or 3 hours per day, the employer must request a particular authorization from the Labour Administration Agency and either the trade union, worker’s representative or the majority of employees in the labour unit. Overtime cannot be worked for more than 4 consecutive days (except in the case of natural disaster).|
|*Weekly rest and public holidays||Workers have the right to at least one day’s rest a week. Lao employees must be given 6 public holiday days as listed in the Labour Law, with foreign workers additionally entitled to the national day of their country.|
|Sick leave||Workers paid on a monthly basis have the right to sick leave with full pay for 30 days a year, on presentation of a medical certificate.|
|Annual leave||Workers employed under an employment contract made for an indefinite period or for a definite period of one year or more, who have already worked for one full year shall be entitled to 15 days of annual leave, at full pay. If the employee is unable to take their annual leave days by fault of the employer, the employee shall receive full pay for such day/s.|
|*Personal leave||In additional to Annual Leave, employees have the right to request (from the employer) paid Personal Leave of not less than 3 days in the event:|
|*Employment of foreign workers|
|*Employment of women||An employer cannot require a pregnant woman or woman with a child under 1 year of age to carry heavy loads, stand for long periods, undertake dangerous work or work at night, work overtime or on a day of rest. If necessary, the employer shall temporarily assign the employee to more suitable work during this period, but pay her the normal salary.|
|*Employment of children|
|Termination of an employment contract|
|Termination of an employment contract by the employer|
|Limits on employer’s right to terminate an employment contract||An employer cannot, without prior approval from the Labour Administration Authority, terminate the employment of an employee if the employee is sick, suffering a disaster such as fire or flooding, is a female employee who is pregnant or within a year of giving birth, on annual leave or leave approved by the employer, still performing work at another workplace on assignment from the employer, filing a complaint or claim against the employer in relation to the Labour Law, or carrying out activities as a worker’s representative.|
|*Termination due to acts of the employee||The employer may terminate an employee’s employment in the following circumstances with no payment of a termination allowance or notification to the Labour Administration Authority:|
|Unlawful termination of employment contract||Termination of an employment contract by the employer is unjustified if the employer:|
In such cases, the employee then has the right to request reinstatement. If the employer does not reinstate the employee, the employer is required to pay a termination allowance.
|Salary and payment of wages|
|*Compulsory social security||Every workplace shall make payments to the National Social Security System with respect to their employees in accordance with the new Social Security Law governs social security payments.|
|*Maternity leave and maternity allowance|
|*Calculation of overtime||Overtime is calculated as follows:|
Specific payments for night work or shift work shall be paid at no less than 15% of the hourly wage of a regular working day for each hour worked.
*These provisions represent new or revised articles appearing in the Labour Law (2013).
If you have any questions on the specifics detailed below, or would like your employment contracts and Internal Regulations reviewed to ensure they are in compliance with the new Labour Law, please don’t hesitate to contact the Arion Legal team at email@example.com.
This article has been provided by Arion Legal, (incorporating McDonald Steed McGrath) an Australian law firm, with an office in Vientiane that has been offering international standard legal advice and documentation for foreign investors operating in, or looking to invest in, Laos since 2008.
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