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New rules on working foreigner management

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Working foreigners in Vietnam are to benefit from positive points of the new Labor Code which has been effective since January 1, 2021. However, some changes expected of by enterprises and their foreign workers have not been noted and introduced in the new code.

The first positive revision relates to the fact that working foreigners no longer have to produce a work permit upon their entry to Vietnam. According to the current labor code, working foreigners have to show their work permits when conducting entry or exit procedures in Vietnam.

Entry and exit of working foreigners are governed by the Law of Entry, Exit, Transit and Residence of Foreigners in Vietnam. This law rules that a work permit is only one of the conditions for indicating the purposes of foreign employees working in Vietnam so that they are provided with the appropriate visas. Meanwhile, the conditions for entry to Vietnam include an effective passport and a valid visa. Therefore, the new Labor Code has removed such an unjustifiable obligation to be complied with by foreign workers when entering Vietnam. The removal spares foreign enterprises from possible troubles if their workers enter Vietnam without a work permit in hand.

Secondly, when a foreigner marries a Vietnamese who is living in Vietnam, he or she will not have to obtain a work permit. The new rule helps those foreign people avoid difficulties when they want to live in Vietnam together with the spouses and find a job without having to get a work permit.

Thirdly, a big trouble for working foreigners over the past time related to the fact that they were permitted to work continuously for an enterprise for only four years at most because they were allowed to sign fixed-term labor contracts only two times. There was another condition applicable to foreigners which ruled that the duration of their work permits lasted maximum for only two years. The new Labor Code has relieved foreigners from this constraint as they can sign multiple fixed-term labor contracts.

Unsolved problems

A solution to cases in which a foreigner can work in the same position for several enterprises and need only a single work permit has not been achieved.

In reality, quite a few multinationals doing business in Vietnam set up different enterprises under the same group. To save costs and human resources, they want to delegate one foreigner (who is subject to having to obtain a work permit) to do the same job for several enterprises in the same group.

The trouble is each enterprise (in the same group) has to apply for a separate work permit for the delegated foreigner. This obligation is unnecessary and fails to attain the goal of administrative streamlining striven for by the Vietnamese Government. It is simply because enterprises have to spend time and efforts conducting procedures for the work permits of the same person who works under the same conditions for enterprises owned by the same group but placed in different provinces or in the same province in Vietnam.

Broadly speaking, if a foreigner signs labor contracts with many employers at a time, each of the employers has to apply for one work permit. This obligation can be hardly said to be much effective in the management of working foreigners.

The conditions on foreigners working in Vietnam have been so far imposed in order to compel foreigners to work in positions that are assumed by executives, specialists and technicians who cannot be currently replaced by Vietnamese. The ultimate goal of these conditions is to restrict the number of foreigners working in Vietnam to give more job opportunities to Vietnamese. However, the Labor Code allows an employee to sign many labor contracts with different employers regardless of whether he or she is a foreigner or not. Therefore, if a foreigner meets all the conditions required of him to work here may sign many labor contracts in Vietnam.

As soon as a foreigner is awarded a work permit in accordance with the law in Vietnam, it is not difficult for he or she to obtain another. So, does the rule set by the State management relevant to having more than one work permit make sense?

In this case, if the State wants to fulfill its goal of restricting the number of foreign workers in the Vietnamese labor market, it should ban foreigners from signing labor contracts with more than one employer. If this restriction is not the case, it is necessary to provide the work permit for the first enterprise where a foreigner works for. This work permit should be valid throughout the duration in which the foreigner works in Vietnam. Other enterprises where this foreigner also works for only need to inform labor agencies of the work permit already awarded.

If a foreigner does different kinds of jobs, there should be flexible regulations to suit different conditions.

The present Labor Code and the decree on fines on administrative violations concerning labor does not specify clearly that foreigners have to obtain a work permit at every enterprise they work for. Instead, they only state generally that foreigners must obtain “work permit.” In line with this stipulation, that a foreigner is awarded a work permit is also considered as having “work permit.” However, regulations on the details of work permits have compelled working foreigners to obtain a work permit at each of the enterprises they work for—say, the content of the employment contract is not compatible with that in the work permit or the holder’s work is not compatible with the content of the work permit. Relying on these details, State management agencies have forced foreigners to have one work permit with each employer.

Foreign enterprises have also hoped that the legal representative of an enterprise, the person delegated to be the representative for the owner, and members of shareholders of a company do not have to conduct procedures for awarding work permits. These persons are responsible for managing the work permits and stipulations in line with the Labor Code meet the conditions for awarding work permits. The granting of work permits for these persons is simply an administrative step taken to legalize their work in Vietnam. It does not help solve the key problem of the management of working foreigners in Vietnam. In essence, those foreigners come to Vietnam to carry out the management of foreign investors on behalf of the latter.

By Phan Thi Ngoc Thang

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