According to the International Labor Organization (ILO), a labor market is a market in which labor services are bought and sold through a process that determines the level of employment of employees and the extent of wage. From the perspective of the ILO, the labor market has a significant position and role in economic development. Especially, opening the labor market is an inevitable trend of each country in the current context of globalization and international integration. The competent authorities in Vietnam have been preparing the best legal corridors, combining the promotion and regulation of policies to make the best foreign employees having high professional qualifications and keep up with the development progress of other countries in the world but still ensuring stable jobs of domestic employees. The Labor Code 2019 (LC 2019), replacing the Labor Code 2012 (LC 2012), has had notable amendments related to foreign employees’ Work Permits in Vietnam. However, the transition regulation between the two Labor Codes on Work Permits reveals its inadequacies to foreign employees who have been working in Vietnam, especially during the complicated situation of the Covid-19 epidemic.
The amendment is suitable in reality for foreign employees not subject to Work Permits
With the demand for high qualifications and specialization and cultural and linguistic differences, most foreign-invested enterprises prefer to accompany their native employees and their business to Vietnam for working, especially for the management positions. Both of the LCs stipulate these foreign investors who are owners or capital contributors of limited liability companies, Chairman and members of the Board of Directors of joint-stock companies shall not subject to Work Permits. However, to restrain the emergence of the “virtual” investors, who shortly contribute to economic organizations or unskilled employees who are not eligible for a work permit, taking advantage of this provision to stay and work in Vietnam without bringing great investment benefits to the economy and impacts on the domestic labor market. The LC 2019 has set the standard value of the capital contribution at the minimum of 03 billion dongs for foreign investors to fall under the category of not subject to a work permit ((Clause 1, Clause 2 of Article 154 of the LC 2019))
Additionally, the LC 2019 had supplemented these foreigners living and working in Vietnam with Vietnamese spouses will not be subject to Work Permits. This regulation aims to promote long-term settlement in foreign-involved marriage, especially with the uprising numbers of multi-national couples nowadays. Nevertheless, the competent authorities must carefully and thoroughly preside over the management of foreign-involved marriages with ineligible foreign spouses to avoid sham marriage under the Law on Marriage and Family and dealing with the consequences of divorce of such marriage.
Inadequacy of the extension and renewal of Work Permits issued under the LC 2012 and Decree 11/2016/ND-CP
Firstly, Regarding the term of the Work Permit, the LC 2019 still maintains that the term of the Work Permit is a maximum of two (02) years, unchanged from the LC 2012. In other words, the total term of the work permit (including the first and subsequent renewal) can only be up to (04) four years. After this expiration, foreign employees who wish to continue working in Vietnam must apply for a new work permit with a different position. This regulation derives from the expectation that the domestic labor force will meet the labor demand of enterprises through continuous learning and development after working with foreign experts and employees. In such circumstances, it is deemed unnecessary for enterprises to continue using foreign employees. Therefore, the competent authority may refuse to grant Work Permits to foreign employees in Vietnam.
Secondly, from the perspective of the Department of War Invalids and Social Affairs of Ho Chi Minh City, the renewal or extension of Work Permits issued under Decree 11 /2016/ND-CP (“Decree 11”) is off the table. Answering at the Dialogue Conference between Enterprises and the Government, the Department of Labor, the Department of War Invalids and Social Affairs of Ho Chi Minh City stated that foreign employees should apply for a work permit under the new work permit former regulations. Regarding this matter, we believe that the above statement has no legal basis and even contradicts the provisions of the laws. Since the transition clause according to Clause 3, Article 29 of Decree 152/2020/ND-CP (“Decree 152”), which replaces Decree 11 only stipulates that Work Permits issued under Decree 11 with amendments and supplements in Decree No. 140/2018/ND-CP continue to be used until its expiration date, without any provisions stating that such permit cannot be extended or renewed.
Work Permits for foreign employees working in Vietnam for a long time
According to the provisions of Decree 11 and Decree 152, foreign employees who have a valid work permit wishes to work for another employer at the same job position and title as registered in the permit, are not required of dossiers in which demonstrate they are managers, executives, experts, technical employees when applying for a new permit.
At the Dialogue Conference between the Enterprises and the Government, the Head of Employment – Occupational Safety said that once the work permit issued under Decree 11 expires, the enterprise shall apply for a work permit under Decree 152. For the expert positions as stipulated in Decree 152, foreigners must ensure professional qualifications and experiences. Specifically:
- Having a university degree or higher or equivalent and having at least 3 years of working experience in a specialized field of training suitable to the position that the foreign worker is expected to work in Vietnam; or
- Having at least 5 years of experience and having a practicing certificate suitable to the position that the foreign worker is expected to work in Vietnam.
Besides that, the certificates or written confirmation certify the expertise of foreign employees from a foreign agent, organization and enterprise may not be required when issuing a work permit under the new regulations. This means that documents confirming the experience of agencies, organizations, and enterprises where the Employee has worked as a specialist will not be approved by the Department of War Invalids and Social Affairs when applying for a New Work Permit. However, this will be determined on a case-by-case basis.
From our perspective, the Department of War Invalids and Social Affairs of Ho Chi Minh City should consider using the working time and experience in Vietnam to recognize foreign employees’ experience as the experience gained from other countries.
Because foreign employees who have been granted a Work Permit under Decree 11 and have worked in Vietnam for a long time with the same position, applying for a new Work Permit is a completely sufficient basis to prove experience under Decree 152. Employers should contact the Department of War Invalids and Social Affairs in the province/city where the foreign worker is expected to work, consult and discuss in advance the points, then instruct employees to provide appropriate documentation.
In summary, the LC 2019 and Decree 152 have had innovations and at the same time have tightened the issue of labor management. Employers and employees should carefully consider legal regulations to avoid violations during the implementation process and meeting difficulties in the licensing process.
If you have any questions or require any additional information, please contact Apolat Legal – An International Law Firm in Viet Nam.
This article is for general information only and is not a substitute for legal advice.