Question: Is an employer required to appoint employees affected by a corporate restructuring to newly created positions?

Answer

No.

Under Clause 3, Article 42 of the Labour Code 2019, where an employer restructures its organization, adopts technological changes, or faces economic difficulties, it must give priority to retraining and retaining employees if suitable positions are available. However, the law does not require employers to appoint affected employees to every newly created position.

Where a new position requires different qualifications, higher expertise, or greater managerial responsibilities, the employer is entitled to conduct a recruitment process and select the most suitable candidate based on the job requirements.

To minimize the risk of employment disputes, employers should implement a transparent recruitment process, establish clear selection criteria, and retain appropriate recruitment records. This helps demonstrate that hiring decisions are based on merit and business needs rather than subjective or discriminatory factors.

Conclusion

Vietnamese labor law encourages employers to retain employees whenever suitable positions are available. However, it does not require employers to appoint affected employees to all newly created positions during a corporate restructuring.

If your business requires legal advice on corporate restructuring, workforce planning, employee redeployment, recruitment during restructuring, or other employment law matters, please contact SB Law. Our experienced lawyers and legal professionals are ready to assist your business in developing practical and legally compliant solutions while minimizing legal risks throughout the restructuring process.