Protecting workers' rights during business mergers and acquisitions

Mergers and acquisitions (M&A) are a common economic activity today, bringing significant benefits and development opportunities to businesses. However, alongside these substantial economic advantages, this activity also has considerable impacts on the company's employees, both positive and negative, leading to concerns among workers about the potential infringement of their rights. Therefore, protecting employee rights during mergers and acquisitions is a crucial and urgent issue.

1. The rights of employees that may be affected.

Undeniably, mergers and acquisitions bring enormous benefits to businesses, the economy, and employees alike. However, alongside these benefits, there are also many potential risks that can affect employee rights, such as:

- Mergers and acquisitions lead to changes in the organizational structure of a business, resulting in changes in the job positions of employees.

- Changes in corporate culture can lead to impacts on the work environment and employee morale within the company.

- Workers risk losing their jobs: mergers and acquisitions between businesses can lead to the elimination of overlapping job positions, thus potentially resulting in staff reductions.

2. Measures to protect workers' rights

To effectively minimize risks and protect workers' rights, coordination among multiple parties is necessary, including businesses, workers, and workers' representative organizations.

Firstly, from the perspective of businesses - the employers .

According to Article 43 of the 2019 Labor Code, in the case of division, separation, or merger of enterprises, the employer has the following obligations:

- In cases where the employment of many workers is affected, the employer must develop a plan for utilizing the workforce. The workforce utilization plan includes:

+ List of employees who continue to be employed, are retrained, or are transitioning to part-time work.

+ List of retired employees.

+ List of employees whose employment contracts must be terminated.

+ Rights and obligations of the parties involved in implementing the plan.

+ Measures and financial resources to ensure the implementation of the plan.

- The current employer and the next employer are responsible for implementing the approved labor utilization plan.

- In the event that an employee is dismissed, they are entitled to unemployment benefits as stipulated in Article 47 of the 2019 Labor Code.

In addition, employers must fully and promptly inform employees about mergers and acquisitions, restructuring plans, changes in policies, etc.

Secondly, from the perspective of the workers.

- Employees need to proactively seek out information related to mergers and acquisitions;

- Participate in the process of gathering feedback and consultation from businesses, proactively expressing your own wishes and opinions;

- Understand your rights as stipulated by law, and be able to proactively seek help through employee representative organizations when your rights are violated.

Thirdly, regarding the role of the workers' representative organization - the trade union.

- Responsible for representing workers and protecting their legitimate rights and interests: proactively monitoring the situation and gathering feedback from workers;

- Participate in the process of developing labor utilization plans with the enterprise: ensuring that the labor utilization plan best protects the rights of employees.

Fourth, the role of government agencies.

- Strengthen inspection and monitoring of the implementation of legal regulations in enterprises: ensuring that enterprises comply with labor laws and regulations;

- Promptly resolve any labor disputes that may arise;

- Enact regulations to support workers affected by mergers and acquisitions.

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Commitment to service quality

HTC Vietnam Law Firm operates with the motto of dedication – efficiency – credibility, and is committed to ensuring the quality of its services, specifically as follows:

- Ensure that work is completed according to the agreed schedule, in compliance with legal regulations, and in accordance with the code of ethics and conduct for Vietnamese lawyers.

- We prioritize customer interests and strive to provide our customers with the best possible service quality.

- Protect the information provided by customers and information related to them.

We look forward to a long-term partnership and mutual growth with our valued customers.

Best regards!

(Author: Nguyen Bich Diep; Translator: Nguyen Phuong Anh; Date: April 16, 2025)

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