Analysis of Unilever Vietnam's HR Policies and Layoff Decisions

This report analyzes a critical situation at Unilever Vietnam, focusing on the Human Resources Department's response to proposed employee layoffs. It begins with an email to the Board of Directors, outlining the detrimental effects of the layoffs and advocating for alternative strategies such as fostering strong employee relationships and implementing employee-friendly policies like a 4-day work week and an open-door policy. The report then presents meeting minutes from a discussion with the HR department, reviewing the importance of maintaining good employee relations, supported by examples of increased productivity, loyalty, and engagement. The minutes also detail the legal basis for the dismissal process, citing relevant articles from the Labor Code and Social Insurance Law of Vietnam, and outlining the necessary steps and documentation required for a legally compliant layoff. The report concludes by highlighting the importance of careful planning, legal compliance, and providing necessary documents to ensure a smooth transition for departing employees. The report underscores the need for balancing business needs with employee well-being and adhering to legal frameworks during organizational restructuring.

I. EMAIL TO BOARD OF DIRECTORS
Dear members of the Board of Directors,
On behalf of Unilever Vietnam's Human Resources Department, I am writing this email to discuss the
company's bad business that resulted in the decision to lay off half of the staff. And give advice to this
dismissal decision.
1. Background
In 2020, due to the impact of the Covid-19 epidemic, Unielver's business activities did not reach the target set
by the company. Therefore, the company's Board of Directors has proposed to cut the workforce in half.
According to the HR department, the decision will be detrimental to the company because after the disease is
stable, the purchasing power of home care, personal care products will increase again and then the company
will have a shortage of staff.
So instead of cutting staff in half, the company should keep good relationships with employees instead of
firing them.
2. Analysis
It can be said that having a good relationship between the company and its employees is the key to the success
of a business today. It can be said that a good relationship between the company and its employees is the key
to the success of a business today. Having a good relationship with employees, businesses will achieve the
following benefits:
❖ Increased productivity
Strong employment relations go a long way in increasing the productivity of an organization on the whole.
Stronger the employee relations, better it is for the business. This is said because when relations between
employer and employee are great, employees tend to be more satisfied and thus end up being more productive
at work. And when each employee is genuinely more productive, the overall productivity of the business
shoots up.
❖ Increase employee loyalty to the company
The next importance of employee relations in an organization is the aspect that it boosts loyalty among
employees to a great extent. Creating a pleasant and productive work employment can have a drastic effect on
an employee’s loyalty. And when loyalty increases, the chances of employee retention also increases manifold
and thus benefits the business in the long run. For most businesses having a long turnover often leads to a lot
of hassles and thus one has to have a strong employee relations in place.

❖ Higher Engagement Rate
The organizational relationship is directly related to employee engagement. According to a report by the
Human Resource Management Association, "Most employees find that the relationship with their employer is
very important to their job satisfaction." So, a close relationship can make employees grow and stay engaged
because they feel valued.
❖ Higher Retention Rate
Companies that endorse positive relations are more likely to be successful because it helps gain the
confidence of their loyal employees who prefer to stick around. They won’t leave the team and organization
which results in saving on recruitment, hiring and training. To avoid business loss, it is better to invest in
creating a strong relationship rather than spending on new searches.
❖ Find a solution quickly
Maintaining good relationships with employees leads to overall free and straightforward communication in
everyday work. Open conversations help to become aware of existing business problems and weaknesses,
helping to find solutions quickly.
❖ Easier Work Assignment
As an employer, a company should know its employees strengths and weaknesses as well as the employees
current and potential professional range. It helps to assign responsibilities and avoid confusion. This helps
employees to stay motivated and to complete assigned tasks with ease.
Some employers also choose to create tasks with the aim of overcoming weaknesses. When employees
discover new strengths, they feel happy and will get their job done better.
➔ Building a connected relationship with employees may not be easy, but when a company starts to invest
time in it, we will know that it is the right path to business happiness.
And over the past years, in order to create good relationships with employees, Unielver has constantly
renewed the working environment for employees. For example, starting January 1, 2021, Unielver Vietnam
has piloted a 4 days/week work program for employees to help them feel less pressure to work. In addition,
the HR department has suggested that the company adopt an 'open door policy'. Specifically, the boss's room
will always be open to easily answer the staff's questions, only closed during meetings. This is because when
the working atmosphere is comfortable, motivation is increased and morale is raised. And when employees
have all their questions answered, they will feel happy and will try their best in their work.
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Above are the benefits that the company will gain from building good relationships with employees. The
human resources department has proposed more company policies should apply in the working environment
to make employees feel comfortable when working.
Thank you for taking the time to read this email.
HR Manager
Phuong Thao
II. MEETING MINUTES WITH HR DEPARTMENT
DATE: January 10th, 2021
TIME: From 9:30 AM to 11:30 AM
LOCATION: Meeting room of Unilever Vietnam Company
MEMBERS PRESENT: Chief Executive Officer, all department directors
MEMBERS APOLOGIES: Chief Finance Officer
GUESTS: Board president
REASON FOR THE MEETING: The meeting opened to discuss the problem of halving the company's
employees
1. Agenda 1
A REVIEW OF THE IMPORTANCE OF KEEPING GOOD RELATIONSHIP WITH THE
EMPLOYEES AND THE ILLUSTRATION OF CURRENT LABOUR LAWS REGARDING
LAYOFF
1.1. Review of the importance of keeping good relationship with the employees
Having a good employee relationship is one of the most important aspects of a successful business plan in this
day and age. Good employee relationships ensure the perfect sync between superiors and employees. This
adds business stability, which is essential for continued growth. Furthermore, it offers a good experience for
the employees at work. At the same time, it positively Worlds their motivation levels and employee
satisfaction charts. In fact, motivated employees also become excellent team members. Additionally,
employees with a higher level of motivation are less at risk of burnout. Workplace conflict is one of the main
reasons behind unsuccessful businesses. Such conflicts often arise due to the difference between the employer
and the employee. If left unattended, these differences will grow. Therefore, all existing barriers between the
employer and the employee are expanding day by day. Have a good relationship with the staff. This allows
employers to make unbiased decisions about their workforce. Great employee relationships seed trust and
confidence in the workplace. Therefore, ensuring healthy communication in the workplace is very important.
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Ensuring a Better Workplace Culture. Organizations are defined by their workplace culture. Employees and
job seekers always want to work for organizations with a thriving work culture. Like all other points, strong
employee relationships also help build a better working culture. When employees have a good relationship
with their employers, they tend to adhere to company principles and guidelines. This is reflected in the
employee's positive experience. Increase work-life balance of employees in the company.
1.2. The legal basis for the dismissal process
When carrying out mass layoffs, some legal risks need to be considered as this action is bound by a number of
laws and regulations. For example, in the Vietnamese market alone, the two most important laws, the Labor
Code and the Social Insurance Law, set out the company's responsibility to terminate the employment
contract.
❖ The Labour Code 2019
● Article 15. Principles for conclusion of an employment contract
1. Voluntariness, equality, good faith, cooperation and honesty.
2. Freedom to enter into an employment contract which is not contrary to the law, the collective bargaining
agreement and social ethics.
(The Labour Code 2019, 2021)
● Article 16. Obligations to provide information before conclusion of an employment contract
1. The employer shall provide the employee with truthful information about the job, workplace, working
conditions, working hours, rest periods, occupational safety and health, wage, forms of wage payment, social
insurance, health insurance, unemployment insurance, regulations on business secret, technological
know-how, and other issues directly related to the conclusion of the employment contract if requested by the
employee.
2. The employee shall provide the employer with truthful information about his/her full name, date of birth,
gender, residence, educational level, occupational skills and qualifications, health conditions and other issues
directly related to the conclusion of the employment contract which are requested by the employer.
(The Labour Code 2019, 2021)
● Article 17. Prohibited acts by employers during conclusion and performance of employment
contracts
1. Keeping the employee’s original identity documents, diplomas and certificates.
2. Requesting the employee to make a deposit in cash or property as security for his/her performance of the
employment contract.
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3. Forcing the employee to keep performing the employment contract to pay debt to the employer.
(The Labour Code 2019, 2021)
❖ Social insurance law
● Article 4. Social insurance regimes
1. Compulsory social insurance has the following regimes:
a) Sickness;
b) Maternity;
c) Labor accident, occupational disease;
d) Retirement;
dd) Survivorship.
2. Voluntary social insurance has the following regimes:
a) Retirement;
b) Survivorship.
3. Supplementary pension insurance as stipulated by the Government.
(Law on Social Insurance 2014, 2014)
● Article 5. Social insurance principles
1. The rate of social insurance entitlement is calculated on the basis of the rate and duration of social
insurance payment and is shared among social insurance participants.
2. The compulsory social insurance premium rate is calculated on the basis of an employee's monthly salary.
The voluntary social insurance premium rate is calculated on the basis of the monthly income selected by
employees.
3. Laborers who have both compulsory social insurance payment and voluntary social insurance payment are
entitled to the retirement regime and survivorship allowance regime on the basis of the period they have paid
social insurance premiums. The period of social insurance payment for which one-time social insurance
entitlement is calculated is not included in the time as the basis for calculating the entitlement to social
insurance regimes.
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4. The social insurance fund is managed in a centralized, uniform, public and transparent manner; to be used
for the right purpose and accounted for independently according to the component funds, the groups of
beneficiaries of the salary regime set by the State and the salary regime decided by the employer.
5. The implementation of social insurance must be simple, easy, convenient, and promptly and fully ensure
the interests of a participant in social insurance.
(Law on Social Insurance 2014, 2014)
❖ Dismissal process
Picture 1: Dismissal process
Because layoffs can have some negative impact on the company's image, careful planning is required.
First, the company needs at least 1 month to plan, select the employees to be fired. The second and third steps
to be taken are to establish a committee that is only responsible for compliance with the law during layoffs
such as: Vietnam Labor Code, Vietnam Social Insurance Law. Next, is the identification of severance
packages, additional services and sources of funding to pay the compulsory insurance and allowances. This
may require a great deal of help from the company's Finance department. After the necessary steps above the
company will conduct layoffs and notify the fired employees.
1.3. The papers and documents needed for the dismissal
In order to comply with the law, comply with the dismissal process as well as help the employee after being
fired to still have a complete application file elsewhere and apply for unemployment benefits, the company
will provide full enough papers and documents related to the dismissal such as: resignation decision paper,
return of social insurance book.
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SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
********
DECISION
(About resignation)
DIRECTOR OF THE COMPANY
Pursuant to the Labor Code of the Socialist Republic of Vietnam dated June 18, 2012;
Pursuant to Labor Contract No …… 123… date …… month …… year …… between the Company
………… ABC …… with Mr./Ms …… XYZ…;
Considering the resignation of Mr./Mrs. …… XYZ
DECISION
Article 1. Now for Mr./Mrs …………… XYZ ……………
Position: …………… Head ……… Department: …………………………
To be resigned from date… .. month… .. year ……
Reason: ……………..……………………………………………………………..
Article 2. This Decision takes effect from the date of signing.
Mr./Mrs. ……………………………, Human Resources Administration and related departments are
responsible for implementing this Decision./.
Recipients:
– Mr./Mrs. Named in Article 1;
– Human Resource Department;
– Save as:……
DIRECTOR
(Sign, write full name, stamp)
Picture 2: Resignation decision paper by Hoatieu.vn
2. Agenda 2
SOLUTIONS TO RESUME BUSINESS
Getting work back to normal requires a substantial amount of work from the rest of the workforce. During the
meeting, we discussed a number of business-related challenges that companies will have to overcome in the
short and long term.
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Dismissal employees will feel uncomfortable and surprised. When the company notices the dismissal, the
employer may experience backlash from employees. While these are normal short-term reactions, there are
many long-term effects that companies can experience. And here are the long-term effects the company will
experience:
❖ Loss of Knowledge and Experience
Unilever has invested a lot of time and resources into recruiting and training its employees. In theory, each
employee should have the necessary skills and knowledge base needed to fulfill their job function.
Additionally, the longer an employee has been with the company, the more information and skills they have.
Therefore, when the employee is fired during the reduction, the company loses the employee's knowledge,
experience and expertise. In addition, when the company cuts down on scale, there will be no hiring of new
employees, which means that when the company starts operations again, there will be a lack of qualified and
experienced staff.
❖ Increased Workloads and Pressure on Remaining Employees
When the company reduces the size, gaps in the workload are created. This puts additional pressure on other
employees to not only fulfill their current job functions, but also take over the jobs of laid-off employees,
which can create stress and pressure, force the rest of the staff and negatively affect the morale and motivation
of the entire team. Additionally, when employees are bogged down on daily work tasks, there is little time to
learn a new skill or expand their existing knowledge base. This can create a stagnant working environment.
❖ Loss of Trust and Security
Employees will feel insecure as they may be the ones that will be fired. Even if their type of job isn't being
cut, the company's willingness to lay off employees to keep costs down can be a worry. Then employees will
lose confidence in the management and those outside the company will have negative thoughts about the way
the company works.
❖ Legal Issues
While downsizing is legal in Vietnam, the company may encounter a legal response, particularly from laid-off
employees. If dismissed employees feel as if they were being fired because of discrimination, they can have
grounds to sue.
❖ Client Relations
When a large number of employees are laid off, it can affect customer relationships. If fewer salespeople are
employed to handle customer issues, the customer experience will suffer. Additionally, if a client has a great
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relationship with a salesperson that has been terminated, they may be disappointed to be assigned a new
employee to serve them. These disappointments can lead to loss of profits and customer satisfaction.
After this workforce reduction, the company needs to have new reward plans, motivate employees to stay so
that they are inspired to work and continue to contribute to the company's activities and projects. Below is a
plan that the HR department recommends to motivate the rest of the staff.
The HR department will open up training courses to improve the professional skills as well as soft skills for
employees. Refresh the offices for creativity, innovation in projects. Besides, there are monthly bonus
programs for outstanding employees of that month. From there, the company will gradually renew the
working environment and working methods to help employees feel most comfortable at work.
III. MEMO TO STAFF
MEMORANDUM: ANNOUNCEMENT OF POTENTIAL LAYOFFS
From: HR Department
To: Board of directors, department heads, all employees of the company
For Approval: Chief Executive Officer
❖ Due to the heavy influence of the Covid 19 epidemic, business and sales activities in Unilever
Vietnam's retail stores went down. Specifically, the company's sales in the third quarter of 2020 only reached
$ 230 million, down 2.4% over the same period in 2019. According to Unilever, the COVID-19 translation
continues to affect the habits of consumers such as its merchandise distribution. And the company has tried its
best to overcome this difficult period, but the revenue is still not enough to pay the sales staff, production staff
at the factory and space rent. Over the past few months, despite proactively cutting non-essential spending
and salary cuts of senior leaders, Unielver still needs a leaner human resources apparatus to meet the
challenges of the post economy COVID-19.
➔ So starting 1/2/2021, the company will cut 7% of sales staff and 5% of employees in factories. The
workforce reduction this time will be based on the company's need for each type of work and the
performance of each employee in the working process. We'll provide details on the affected job types in
the Employer Plan below and will meet each employee in the disqualified position later this month.
1. Legal Grounds
1.1. Vietnam labour code
When implementing this decision to reduce personnel, Unilever has complied with the provisions of the laws
of Vietnam. Specifically, the company complies with Vietnam's 2019 Labor Code, specifically Article 44,
Article 45, Article 47, Article 48 of Section 3, Chapter III.
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❖ Article 44. Labor utilization plan
1. A labor utilization plan shall have the following contents:
a) The names and number of employees to be retained, employees to be retrained for further employment, and
employees to be working on part-time basis;
b) The names and number of employees to retire;
c) The names and number of employees whose employment contracts have to be terminated;
d) Rights and obligations of the employer, employee and relevant parties regarding implementation of the
labor utilization plan;
dd) The measure and financial sources to implement the plan.
2. During development of the labor utilization plan, the employer shall discuss with the representative
organization of employees (if any). The labor utilization plan shall be made available to the employees within
15 days from the day on which it is adopted.
(The Labour Code 2019, 2021)
❖ Article 45. Noticing termination of employment contracts
1. The employer shall send a written notice to the employee of the termination of his/her employment
contract, except for the cases specified in Clauses 4, 5, 6, 7, 8 Article 34 of this Labor Code.
2. In case an employer that is not a natural person shuts down business operation, the date of termination of
the employment contract is the same date of the notice of business shutdown.
In case the provincial business registration authority issues a notice that the employer does not have a legal
representative or a person authorized to exercise the legal representative’s rights and obligations according to
Clause 7 Article 34 of this Labor Code, the date of termination of the employment contract is the same date of
the notice.
(The Labour Code 2019, 2021)
❖ Article 47. Redundancy allowance
1. Where an employment contract is terminated according to Clause 11 Article 34 of this Labor Code and the
employee has worked on a regular basis for the employer for at least 12 months, the employer shall pay a
redundancy allowance to the employee. Each year of work will be worth 01 month’s salary and the total
redundancy allowance shall not be smaller than 02 month’s salary.
2. The qualified period of work as the basis for calculation of redundancy allowance shall be the total period
during which the employee actually worked for the employer minus the period over which the employee
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participated in the unemployment insurance in accordance with unemployment insurance laws and the period
for which severance allowance or redundancy allowance has been paid by the employer.
3. The salary as the basis for the calculation of redundancy allowance shall be the average salary of the last 06
months under the employment contract before the termination.
4. The Government shall elaborate this Article.
(The Labour Code 2019, 2021)
❖ Article 48. Responsibilities of the parties upon termination of an employment contract
1. Within 14 working days following the termination of an employment contract, both parties shall settle all
payments in respect of the rights and interests of each party. In the following cases, such period may be
extended, but shall not exceed 30 days:
a) Shutdown of business operation of the employer that is not a natural person;
b) Changes in the organizational structure, technology or changes due to economic reasons;
c) Full division, partial division, consolidation, merger of the enterprise; sale, lease, conversion of the
enterprise; transfer of the right to ownership or right to enjoyment of assets of the enterprise or cooperative;
d) Natural disasters, fire, hostility or major epidemics.
2. Priority shall be given to payment of the employees’ salaries, social insurance, health insurance,
unemployment insurance, severance allowance and other benefits under the collective bargaining agreement
and employment contracts in case of shutdown, dissolution or bankruptcy of an enterprise or cooperative.
3. The employer has the responsibility to:
a) Complete the procedures for verification of duration of participation in social insurance and unemployment
insurance, return them and original copies of the employee’s other documents (if any);
b) Provide copies of the documents relevant to the employee’s work if requested by the employee. The
employer shall pay the cost of copying and sending the documents.
(The Labour Code 2019, 2021)
1.2. Contractual obligations
Employee cuts are also subject to the contract between the employee and the company. Here are some things
about the implementation of employment contracts in Vietnam's Labor Code 2019.
❖ Article 30. Suspension of an employment contract
1. Cases of suspension of an employment contract:
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a) The employee is conscripted into the army or militia;
b) The employee is held in custody or detention in accordance with the criminal procedure law;
c) The employee is sent to a reformatory school, drug rehabilitation center or correctional facility;
d) The female employee is pregnant as specified in Article 138 of this Code;
dd) The employee is designated as the executive of a wholly state-owned single-member limited liability
company;
e) The employee is authorized to representative the state investment in another enterprise;
g) The employee is authorized to represent the enterprise’s investment in another enterprise;
h) Other circumstances as agreed by both parties.
2. During the suspension of the employment contract, the employee shall not receive the salary and benefits
specified in the employment contract, unless otherwise agreed by both parties or prescribed by law.
(The Labour Code 2019, 2021)
❖ Article 34. Cases of termination of an employment contract
1. The employment contract expires, except for the case specified in Clause 4 Article 177 of this Code.
2. The tasks stated in the employment contract have been completed.
3. Both parties agree to terminate the employment contract.
4. The employee is sentenced to imprisonment without being eligible for suspension or release as prescribed
in Clause 5 Article 328 of the Criminal Procedure Code, capital punishment or is prohibited from performing
the work stated in the employment contract by an effective verdict or judgment of the court.
5. The foreign employee working in Vietnam is expelled by an effective verdict or judgment of the court or a
decision of a competent authority.
6. The employee dies; is declared by the court as a legally incapacitated person, missing or dead.
7. The employer that is a natural person dies; is declared by the court as a legally incapacitated person,
missing or dead. The employer that is not a natural person ceases to operate, or a business registration
authority affiliated to the People’s Committee of the province (hereinafter referred to as “provincial business
registration authority”) issues a notice that the employer does not have a legal representative or a person
authorized to exercise the legal representative’s rights and obligations.
8. The employee is dismissed for disciplinary reasons.
9. The employee unilaterally terminates the employment contract in accordance with Article 35 of this Code.
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