Recently, a friend of mine was pressed with a problem. He signed an employment contract that stated specific duties. He is a computer programmer and his tasks are primarily associated with developing software and related research. But the firm he works for, an international company, decided to open a new line. They have begun offering stock brokerage as a service. They feel this is more lucrative than their programming arm and have now required everyone in the company to sign up two people for stock brokerage accounts every month. If the employee fails to do this they will be docked 10% of their salary for that month. Is this legal?
I didn’t know, so I did some research. The employment law sets out that the employment contract is the place to agree on the duties and responsibilities of the parties. Particularly, the duties of the employee and the expected tasks which he will perform. This is where the job description becomes key performance indicators (KPIs) and the expectations of the employee are laid out.
So far so good, but what happens if the company wants to change or add to the KPIs of an employee like the situation my friend faces?
There are a couple of options. First, and the option contemplated by the Employment Law, is an agreement between the employer and the employee. The two parties must come to a mutual understanding about the change in duties. Once that is done, they must sign an annex and append it to the labor contract. This assumes, however, an amicable relationship between management and the employees and a relatively equal power relationship–which is rarely the case.
This is good for employees because it requires their approval before changing duties or adding responsibilities. It is not so good for employers–who are Indochine Counsel’s primary clients as we don’t offer labor dispute services for employees–because it does not allow them to easily alter the KPIs according to the economic and commercial requirements of their business. For large businesses they must either negotiate amended KPIs for each employee or deal with the union representatives, neither option preferred.
This is where my friend comes into problems and the wise employer thinks ahead. If, in the negotiation of the original employment contract, a clause is inserted that allows for the amendment of the KPIs according to the commercial needs of the employer, the situation will most likely be much different.
Vietnamese law has a great deal of respect for contract. If the party’s to an employment contract agree to something, then most likely the courts will respect that agreement. As an employer, then, it is best to ensure that such a clause is inserted into every employment contract. Thus, the software company of my friend would be allowed to change his KPIs according to agreement between the parties without having to negotiate an annex or union agreement.
But I’m from the United States and this strikes me as somewhat unreasonable. To require a computer programmer to enter the realm of the stock market–a completely unrelated field–and dock him pay if he fails to do so seems very unreasonable, almost arbitrarily punitive. It seems that there should be some way to mitigate the degree to which an employer can change the KPIs even in the face of an inserted clause in the original employment contract.
On this issue the law is silent. There is no legal guidance in this situation as to how to decide whether an unilateral change to the employee’s KPIs by the employer is so extreme as to fall outside the scop eof such an inserted clause. I consulted our in-house labor law specialist, however, and she provided three criteria which may be relevant to a labor court in looking at this issue.
revised KPIs are reasonable if they are set in accordance with (i) the labor contract andjob description and (ii) the employer’s KPI’s and internal appraisal performance rules are consulted with the employer’s trade union and (iii) the KPIs have clear and reasonable timeframes and are achievable.
It should be noted that these criteria are not necessarily based on the law but on the long experience of a legal expert. In the law, it is likely that an employer–so long as they don’t violate the union consulted agreements–will be allowed to act however they want so long as they have inserted the necessary clause in the original labor contract.
Thus it is, the wise employer will include a clause in all labor contracts–especially in those businesses that might expand into new sectors in the future–explicating their right to alter the employee’s KPIs without the need to negotiate an annex.