Topic 2:
CONDITIONS FOR FOREIGN WORKERS TO WORK IN VIETNAM
Senior Lecturer, Dr. Lê Thị Thúy Hương
SUMMARY OF THE CASE AND COURT RULING
[Judgment No. 20/2019/LĐ-ST dated October 22, 2019, of the People’s Court of Gò Vấp District, Ho Chi Minh City, regarding a labor contract dispute]
Case Summary:
On September 1, 2017, Mr. Z and University T. (hereinafter referred to as “University T”) entered into a long-term labor contract, Contract No. 517/2017/TDT-HDLV. Under the terms of the contract, Mr. Z was recruited to work at University T as a researcher in the Faculty of Scientific Management and Technical Development, with a monthly salary of 22,750,000 VND. The contract term was 12 months, from September 1, 2017, to August 31, 2018.
Following the execution of the labor contract, University T transferred three months’ salary to Mr. Z, totaling 64,247,062 VND. However, Mr. Z failed to submit the required documentation to obtain a work permit, did not participate in any activities at the University, and did not produce any publications as stipulated in the signed labor contract.
University T observed that, after signing the labor contract, Mr. Z neither provided the necessary documents for the University to process his work permit nor fulfilled any commitments under the contract. Furthermore, he did not work a single day for the University despite receiving the agreed-upon salary. Consequently, University T initiated a lawsuit, requesting the court to declare the labor contract between Mr. Z and University T wholly invalid and to address the consequences of such invalidity in accordance with applicable law.
Court Ruling:
(1) The court declared Labor Contract No. 517/2017/TDT-HDLV, executed on September 1, 2017, between University T and Mr. Z, to be wholly invalid.
(2) Mr. Z was ordered to repay University T the sum of 64,247,062 VND that he had received.
COMMENTARY
Since this case was adjudicated prior to January 1, 2021 (the effective date of the 2019 Labor Code), the court applied the 2012 Labor Code and its guiding documents to resolve the case. However, for reference purposes, we have utilized the 2019 Labor Code and Decree No. 152/2020/NĐ-CP dated December 30, 2020, regulating foreign workers in Vietnam and the recruitment and management of Vietnamese workers employed by foreign organizations and individuals in Vietnam (hereinafter referred to as “Decree 152/2020/NĐ-CP”) as the legal basis for this commentary.
I. Introduction
Foreign workers are also participants in labor relationships in Vietnam. However, to qualify as a subject of a labor relationship (LR) in Vietnam, foreign workers must comply with specific conditions to establish their legal status—or, more simply, to be permitted to work lawfully in Vietnam.
Among these conditions, obtaining a work permit is a critical requirement for foreign workers. In practice, however, not all foreign workers in Vietnam meet this condition. Through an analysis of Judgment No. 20/2019/LĐ-ST of the People’s Court of Gò Vấp District, Ho Chi Minh City (hereinafter referred to as “Judgment 20/2019/LĐ-ST”), the author will clarify the conditions under which foreign workers are permitted to work in Vietnam and provide commentary on the legal issues arising from this case.
II. Legal Issues
- Conditions for Employing Foreign Workers in Vietnam
Although neither international instruments nor Vietnamese legal documents provide a specific definition of a “foreign worker,” this term can be understood as a narrower subset of the concept of a “migrant worker.” It refers to workers who perform labor outside their country of origin
[The concept of a “migrant worker” is recognized in ILO conventions, such as Convention No. 97 of 1949 on Migration for Employment and Convention No. 143 of 1975 on Migrant Workers in Abusive Conditions and the Promotion of Equality of Opportunity and Treatment of Migrant Workers. Accordingly, a migrant worker is defined as: “a person who migrates from one country to another for the purpose of being employed, rather than engaging in self-employment, including any person permanently recruited as a migrant for employment.” The United Nations also provides a similar definition in the 1990 Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families].
From a national perspective, the laws of most countries, including Vietnam, establish specific regulations to govern the labor relationships (LRs) of foreign workers employed within their jurisdictions. These regulations are enshrined in normative legal documents such as the Labor Code—the cornerstone statute in the labor domain—and its implementing sub-legislative instruments.
Vietnamese law delineates specific conditions that foreign workers must satisfy to be permitted to work in Vietnam [Paragraph 1, Article 151 of the 2019 Labor Code]. Specifically, they must be “individuals holding foreign nationality” and meet the following requirements:
(1) Be at least 18 years of age and possess full civil behavioral capacity;
(2) Have professional qualifications, technical skills, occupational expertise, work experience, and sufficient health as prescribed by the Minister of Health;
(3) Not be currently serving a criminal sentence, have an unexpunged criminal record, or be subject to criminal prosecution under the laws of a foreign country or Vietnam;
(4) Hold a work permit issued by a competent Vietnamese state authority, except in cases exempt from the work permit requirement [Exemptions from the work permit requirement are currently stipulated in Article 154 of the 2019 Labor Code and Article 7 of Decree 152/2020/NĐ-CP].
When examining these conditions, several key points warrant attention:
First, Vietnamese law permits only individuals with foreign nationality to work in Vietnam. This provision excludes stateless persons [Paragraph 2, Article 5 of the 2008 Law on Nationality (amended in 2014) defines a “stateless person” as “an individual who does not hold Vietnamese nationality or the nationality of any foreign country”], despite the fact that Vietnam’s nationality law recognizes foreigners residing in Vietnam as encompassing “foreign nationals and stateless persons permanently or temporarily residing in Vietnam” [Paragraph 5, Article 3 of the 2008 Law on Nationality (amended in 2014)].
Second, foreign workers must be at least 18 years old and possess full civil behavioral capacity. Under the 2015 Civil Code, an individual with full civil behavioral capacity is an adult, defined as someone aged 18 or older [Article 20 of the 2015 Civil Code]. Consequently, the minimum working age for foreign workers in Vietnam is higher than that for Vietnamese citizens [Paragraph 1, Article 3 of the 2019 Labor Code provides: “The minimum working age of an employee is 15 years…,” with “employee” here understood to refer to Vietnamese citizens].
Third, foreign workers must possess professional qualifications, technical skills, occupational expertise, work experience, and adequate health as prescribed by regulation. These are deemed essential conditions to ensure that foreign workers can perform their duties with quality and efficiency. Unlike Vietnamese workers, however, foreign workers entering Vietnam are required to have specialized training and expertise [Article 152 of the 2019 Labor Code mandates that enterprises, agencies, organizations, individuals, and contractors may only recruit foreign workers for managerial, executive, expert, or technical positions that Vietnamese workers cannot yet fulfill in accordance with production and business needs]. In other words, Vietnamese labor law does not encourage the employment of foreign workers lacking professional qualifications or vocational training.
Fourth, a work permit is mandatory. Under the 2019 Labor Code, foreign workers may exercise their right to work in Vietnam only if they hold a work permit, except in cases exempt from this requirement. Legally, the work permit serves as a “passport” enabling foreign workers to lawfully exercise their right to work in Vietnam.
Previously, Decree No. 11/2016/NĐ-CP imposed additional conditions for foreign workers to obtain a work permit [Paragraph 4, Article 10 of Decree No. 11/2016/NĐ-CP dated February 3, 2016, issued by the Government, detailing the implementation of certain provisions of the Labor Code regarding foreign workers in Vietnam]. However, the 2019 Labor Code and Decree 152/2020/NĐ-CP no longer stipulate additional conditions for obtaining a work permit. This amendment has resolved the prior overlap and redundancy between the conditions for foreign workers to work in Vietnam and the conditions for obtaining a work permit found in earlier legal instruments.
In addition to the general conditions outlined above, the 2019 Labor Code also specifies certain special conditions, including the following:
First, the law requires enterprises, agencies, organizations, or individuals—except contractors—to explain their need for foreign workers and obtain written approval from a competent state authority before recruiting foreign workers to work in Vietnam [Paragraph 12, Article 152 of the 2019 Labor Code]. This requirement, to some extent, reflects Vietnam’s “narrow gate” policy regarding the importation of foreign labor. In contrast, many other countries, such as Japan and South Korea, adopt an opposite approach, focusing primarily on recruiting general laborers.
However, this distinction should not be construed as evidence of discrimination in labor recruitment or in ensuring the right to work for foreign workers, either in Vietnam or elsewhere. It is a matter of national sovereignty. Based on their own needs, nations have the sovereign right to determine which groups of foreign workers they will admit while still safeguarding employment opportunities for their own citizens. In other words, whether a country opens or closes its labor market is a deliberate choice that is difficult for external parties to influence unless the country voluntarily commits to broadening access.
Second, with respect to contractors, prior to recruiting and employing foreign workers in Vietnam, they must provide a detailed declaration specifying the job positions, professional qualifications, technical skills, work experience, and duration for which foreign workers are needed to perform the contracted project. This declaration must be approved in writing by a competent state authority [Paragraph 3, Article 152 of the 2019 Labor Code].
At first glance, it might appear that the 2019 Labor Code continues to relax the conditions for employing foreign workers, as established in the 2012 Labor Code, particularly for contractors, since the provision does not explicitly limit the types of work involved. This could suggest that contractors retain the ability to employ foreign workers for general labor tasks.
However, this is merely a theoretical possibility. The critical issue lies in the fact that, before recruiting foreign workers, contractors are obligated to declare the number, qualifications, expertise, and experience of the foreign workers they intend to hire for the project in Vietnam. More importantly, they must first request the recruitment of Vietnamese workers for the positions intended for foreign workers from the Chairperson of the People’s Committee of the province where the project is being executed [Paragraph 1, Article 5 of Decree 152/2020/NĐ-CP].
Only after a specified period, if the locality fails to nominate or provide Vietnamese workers, will the Chairperson of the provincial People’s Committee consider and decide whether the contractor may recruit foreign workers for positions that cannot be filled by Vietnamese workers [Paragraph 1, Article 5 of Decree 152/2020/NĐ-CP]. This raises the question: Can contractors easily bring general laborers from their home countries to work in Vietnam when there is ample evidence that Vietnam’s market is saturated with local general laborers? If so, why would contractors need to import foreign workers for such roles?
Thus, while the regulation may appear lenient, it remains stringent in practice, as obtaining approval from the Chairperson of the provincial People’s Committee is not always a straightforward hurdle to overcome. Consequently, even for contractors, the right to recruit foreign workers in Vietnam is effectively limited to specific roles that Vietnamese workers cannot fulfill.
In summary, building on the provisions of the 2012 Labor Code, the 2019 Labor Code and its implementing regulations continue to clearly reflect Vietnam’s stance on the employment of foreign workers. Fundamentally, Vietnamese law recognizes the right of foreign workers to be recruited for work in Vietnam, but this right is conditional.
In addition to stipulating the conditions under which foreign workers are permitted to work in Vietnam, the 2019 Labor Code also continues to delineate cases in which foreign workers are exempt from the work permit requirement [There are 20 such cases specified in Article 7 of Decree 152/2020/NĐ-CP]. Notably, compared to the 2012 Labor Code, the 2019 Labor Code added a new exemption for foreigners married to Vietnamese citizens and residing in Vietnam [Paragraph 8, Article 154 of the 2019 Labor Code].
In Judgment 20/2019/LĐ-ST, Mr. Z, an Israeli national, was recruited by University T to work in Vietnam. Although the judgment does not provide a detailed analysis of the conditions permitting Mr. Z to work in Vietnam, based on the information that he holds a doctorate in energy and was hired as a researcher in the Faculty of Scientific Management and Technical Development at University T, Mr. Z could potentially qualify for an exemption from the work permit requirement.
This would be contingent upon him being “confirmed by the Ministry of Education and Training to teach or conduct research at educational or training institutions in Vietnam” [This case was previously regulated under Point d, Paragraph 1, Article 7 of Decree 11/2016/NĐ-CP and is currently addressed in Paragraph 14, Article 7 of Decree 152/2020/NĐ-CP].
However, the details in the judgment indicate that University T did not pursue the procedure to confirm Mr. Z’s exemption from the work permit requirement. Instead, University T requested Mr. Z to provide documentation to apply for a work permit on his behalf. Consequently, it can be inferred that University T considered Mr. Z to meet the criteria of an expert and intended to apply for a work permit for him under the expert category [Paragraph 3, Article 3 of Decree 152/2020/NĐ-CP].
- Responsibility for Obtaining a Work Permit for Foreign Workers
According to the guidance in Decree 152/2020/NĐ-CP, foreign workers are responsible for providing specific documents and records proving their eligibility to work in Vietnam, which are then submitted to the competent authority for consideration and issuance of a work permit. While working in Vietnam, foreign workers need only present their work permit to the relevant state authority upon request.
However, the responsibility for applying for the work permit lies with the employer. In Judgment 20/2019/LĐ-ST, University T required Mr. Z to submit professional qualifications and documentation so that University T could apply for a work permit on his behalf. In principle, University T would only be obligated to undertake the work permit application process if Mr. Z were a foreign worker recruited and employed by University T.
Furthermore, this application should have been completed prior to signing the labor contract (LC) with Mr. Z. Yet, according to the judgment, University T executed the LC with Mr. Z on September 1, 2017, and only afterward requested him to provide the necessary documents for the work permit application. This sequence of events demonstrates that University T failed to comply with the regulations governing the employer’s responsibility to obtain a work permit for a foreign worker.
- Duration of Employment for Foreign Workers
As analyzed above, Vietnam’s current labor “import” policy remains relatively restrictive, and the law does not encourage the employment of foreign workers, particularly for general labor positions.
Labor law stipulates that the maximum duration of a work permit issued to a foreign worker is two years. This duration, as provided in the 2019 Labor Code, remains unchanged from the 2012 Labor Code [Prior to May 1, 2013 (the effective date of the 2012 Labor Code), the duration of a work permit was three years and could be renewed multiple times].
However, a significant difference exists between the 2012 Labor Code and the 2019 Labor Code. Under the 2012 Labor Code and its implementing Decree 11/2016/NĐ-CP, when a work permit expired, employers were permitted to apply for a new work permit to continue employing the foreign worker, with no limit on the number of renewals [See Paragraph 2, Article 13 of Decree 11/2016/NĐ-CP].
In contrast, under the 2019 Labor Code, a work permit may be issued to a foreign worker only once, with a maximum duration of two years. Upon expiration, the work permit may be extended, but only once, and for a maximum period not exceeding two years [Article 155 of the 2019 Labor Code and Article 10 of Decree 152/2020/NĐ-CP].
Currently, the 2019 Labor Code has introduced significant adjustments regarding the type of labor contract (LC) applicable to foreign workers in Vietnam. Specifically, Paragraph 2, Article 151 of the 2019 Labor Code provides: “The duration of a labor contract for a foreign worker employed in Vietnam must not exceed the duration of the work permit. When employing a foreign worker in Vietnam, the parties may agree to enter into multiple fixed-term labor contracts.” Thus, the current law explicitly precludes the use of indefinite-term labor contracts for foreign workers.
Notably, whether applying for an initial work permit or an extension upon expiration, the employer must provide information regarding the anticipated duration of the LC to be concluded with the foreign worker. In other words, the duration of the work permit must align with the anticipated duration of the LC (but not exceed two years).
In Judgment 20/2019/LĐ-ST, University T entered into an LC to employ Mr. Z for a term of 12 months. Setting aside University T’s error in executing the LC with Mr. Z before he obtained a work permit, the duration of the LC can be deemed reasonable, as it does not exceed the maximum allowable duration of a work permit under the applicable regulations.
- Forms of Employing Foreign Workers
When examining the regulations pertaining to the recruitment and employment of foreign workers in Vietnam, it is evident that the principles of freedom to work and freedom to choose employment are not fully extended to this group. Even for jobs not prohibited by law, foreign workers do not necessarily have equal opportunities to be recruited.
Current law specifies 11 forms under which foreign workers may be employed in Vietnam, including: (i) Performing a labor contract; (ii) Intra-company transfers; (iii) Executing contracts or agreements related to economics, commerce, finance, banking, insurance, science and technology, culture, sports, education, vocational training, and healthcare; (iv) Providing services under a contract; (v) Offering services for sale; (vi) Working for foreign non-governmental organizations or international organizations permitted to operate in Vietnam under Vietnamese law; (vii) Volunteers; (viii) Individuals responsible for establishing a commercial presence; (ix) Managers, executive directors, experts, and technical workers; and (x) Participating in the implementation of bidding packages or projects in Vietnam [Article 2 of Decree 152/2020/NĐ-CP].
In Judgment 20/2019/LĐ-ST, University T entered into a 12-month labor contract with Mr. Z, indicating that University T intentionally recruited Mr. Z under the first form listed above. Accordingly, had Mr. Z performed the work as agreed with University T, the labor relationship between University T and Mr. Z would have been fully governed by the 2019 Labor Code.
III. Conclusion
Amid the trend of international economic integration—particularly as Vietnam has become a member of the WTO and is working alongside ASEAN to build a shared political, economic, and social community—the gradual removal of barriers and the opening of the labor market are inevitable developments.
While Vietnamese law currently reflects a policy of restricting the admission of foreign workers for general labor roles to preserve job opportunities for the domestic workforce, and has introduced stricter measures to regulate the employment of foreign workers, it is undeniable that the 2019 Labor Code has incorporated reasonable amendments and enhancements to refine the regulations on employing foreign workers.
These changes have established a legal framework that fosters a more open and efficient labor market, encouraging internationally qualified personnel to join Vietnam’s labor market. This, in turn, enables Vietnamese workers to learn from and absorb the expertise of their foreign counterparts, ultimately enhancing the quality of the domestic workforce and supporting the nation’s goals of industrialization and modernization.
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