New points on labor contracts with foreigners in Labor Code 2019

by DungTran

New points on labor contracts with foreigners in Labor Code 2019. Regulations on conditions for foreign workers to work in Vietnam. Let us learn about this topic with LSX law firm as follow:

Regulations on conditions for foreigners to work in Vietnam in Labor Code

New points on labor contracts with foreigners in Labor Code 2019

Previously, in Article 169 of the Labor Code 2012; there were conditions for foreign workers to work in Vietnam as “foreign citizens” and attached some specific conditions such as:

Have total civil act capacity;

Having professional qualifications, skills, and health suitable to the job requirements;

Not be a criminal or examined for penal liability under Vietnamese and foreign laws;

Having a work permit; issued by a competent Vietnamese state agency; except for the cases specified in Article 172 of the Labor Code 2012.

Subjects “Foreign citizens” according to the Law on entry, exit, transit; and residence of foreigners in Vietnam in 2014 include foreigners with foreign nationality and stateless people.

Foreigners who sign labor contracts are foreigners with foreign nationality; excluding stateless people because when entering into labor contracts; foreign workers must confirm their nationality capacity and civil acts according to the country of their nationality. Therefore, for stateless people, the employer will not be able to determine their nationality. This is an unclear regulation, forcing foreign workers and employers to study the relevant laws carefully. Currently, there is no data on stateless people working in Vietnam.

Overcoming the above provision, in Clause 1, Article 151 of the Labor Code 2019; the foreigners who sign labor contracts in Vietnam are only “foreign nationals,” excluding foreigners stateless directly. In addition, there are several additional conditions such as Over 18 years old; Having sufficient health as prescribed by the Minister of Health; In addition to not being a criminal or being examined for penal liability under Vietnamese and foreign laws; the case has not yet been cleared of criminal records, nor can they sign a contract in Vietnam; to ensure the recruitment of high-quality and well-characterized workers. 

Regulations on the term of the labor contract in Labor Code

Regulations on the term of the labor contract in Labor Code 2012

This is considered the most typical innovation point of labor contracts with foreigners. Article 173 of the 2012 Labor Code stipulates that a work permit has a maximum term of 02 years and Clause 3; Article 174 stipulates that a work permit expires when the content of the labor contract is not consistent with the content of the issued work permit; so the labor contract with a foreigner has the maximum term is 24 months; this is a definite-term labor contract as prescribed in Article 22 of the Labor Code 2012.

At the same time; Article 22 of the Labor Code 2012 stipulates that when a definite-term labor contract expires; the two parties sign a new labor contract; which is a definite term contract, it can only sign one more time; after that if the employee continues to work; they must sign an indefinite term labor contract. When the labor contract with the foreign worker expires, the employer must apply for a re-issue of the work permit; then re-sign a new labor contract with a maximum term of 24 months; and this must be repeated many times if the foreign worker continues to work for the employer. This is the inconsistency in the legal provisions on labor causing a lot of confusion for foreign employers when they do not know which regulations to follow in order not to violate the law.

Regulations on the term of the labor contract in Labor Code 2019

Overcoming the above limitations, in Clause 2, Article 151 of the Labor Code 2019, it is stated that “The term of the labor contract for foreign workers working in Vietnam must not exceed the term of the work permit. When employing foreign workers to work in Vietnam, the two parties can agree to enter into multiple definite-term labor contracts.

Article 155 of the Labor Code 2019 stipulates that the maximum term of a work permit is 2 years; according to the above provisions, the maximum term of a labor contract remains 24 months. However, when the term of a previously signed labor contract expires; the employee Employees and employers can agree to enter into many definite-term labor contracts, this provision has created consistency in terms of labor contract terms for foreign workers; helping employees Foreigners and enterprises no longer face difficulties; and obstacles when the work permit expires and must re-sign a new labor contract. 

Regulations on cases of termination of labor contracts in Labor Code

Labor Code 2012 does not have specific provisions on cases of termination of labor contracts with foreigners; so the cases of termination of labor contracts specified in Article 36 will be applied. There are 10 cases of termination of labor contracts.

In addition to the above 10 cases; there are actually a number of cases leading to the termination of labor contracts with foreigners; such as revoked work permits, expired work permits, and expulsed foreign workers in accordance with Vietnamese law. These are the cases that are not regulated by the law; but in fact, when performing the labor contract; if the foreign worker is expelled or the revocation of work permit; it will lead to the labor contract being unable to be performed; forcing the employer; and the employee must terminate the labor contract, this is an omission of the legal regulations.

Article 34 of the Labor Code 2019 stipulates 13 cases of termination of labor contracts; of which two more cases of termination of labor contracts with foreigners in Clauses 5 and 12 of this Article are:

“5. Foreign employees working in Vietnam are expelled under legally effective court judgments or decisions or decisions of competent state agencies;

The work permit expires for foreign workers working in Vietnam according to the provisions of Article 156 of this Code.”

This is a remarkable step forward. The cases of termination of labor contracts with foreigners have been specified. From now on, if the employee is expelled or the work permit expires; the foreign worker and employer Employers can base themselves on Article 34 of the Labor Code 2019 to terminate the labor contract; making it clearer to handle the consequences of the termination of the labor contract such as compensation upon termination of the labor contract. 

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Related questions

What is an employment contract?

Labor contract is a written agreement between an employee and an employer on paid employment, which stipulates working conditions, rights and obligations of each party in the labor relationship. The labor contract is based on the principle of voluntariness, equality, in accordance with the provisions of the labor law. During the performance of the labor contract, the contracting parties may agree to amend the content of the labor contract. In case there is a change in one of the main contents of working conditions, the employee has the right to sign a new labor contract.

How many types of contracts are there?

Firstly, a seasonal labor contract or a specific job with a term of less than 12 months Second, definite-term labor contract: A definite-term labor contract is a contract in which the two parties determine the term and the time of termination of the contract’s validity within a period of 12 months to 12 months. 36 months. Thirdly, indefinite-term labor contract: An indefinite-term labor contract is a contract in which the two parties do not specify the term and the time of termination of the contract’s validity.

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