Vietnam Labour Law Update (March 2017)

Circular 40 provides implementation guidance regarding a number of articles of decree 11/2016/ND-CP on foreign employees in Vietnam

Circular 35 stipulates the work permit exemption for foreign employees internally transfered by enterprises operating within eleven service sectors Vietnam commits to WTO

I. CIRCULAR 40 PROVIDES IMPLEMENTATION GUIDANCE REGARDING A NUMBER OF ARTICLES OF DECREE 11/2016/ND-CP ON FOREIGN EMPLOYEES IN VIETNAM

In order to detail and solve commonly-occurring problems in terms of applying work permits for their foreign employees, the Ministry of Labor – Invalids and Social Affairs issued Circular No. 40/2016/TT-BLĐTB&XH dated 25 October 2016 (“Circular 40”). Accordingly, Circular 40 regulates a number of key issues as below:

1. Circular 40 specifically requires deadlines for employers (other than contractor) submitting to Department of Labor – Invalids and Social Affairs an explanatory report on demand for utilization of foreign employees at least 30 days before the planned day for commencement of work. In cases of changes in demand for utilization of foreign employees, the employer shall submit an explanatory report on changes at least 30 days before the planned day for commencement of work.

2. Circular 40 specifically requires the evidence of foreign employees certified as an expert by one of the following documents:

• An expert certificate issued by an enterprise, organization, foreign company, including: the name of certificate issuer; the expert’s information including name, date of birth, nationality and major qualifications with a position expected to work in Vietnam; or
• A university degree or equivalent and with a minimum of three-year-working experience in a major relevant to the position expected to work in Vietnam.

3. Circular 40 specifically requires the evidence of foreign employees certified as a technician by the following documents:

• A certificate or documents issued by an enterprise, organization, or foreign company certifying that such foreign employee has been trained for at least 01 year in the technical field or his/her major is relevant to the job (s)he is expected to work in Vietnam; and
• Documents certifying that the foreign employee has a minimum of three-year-working experience in relevant major to the position (s)he is expected to work in Vietnam.

4. One key point of Circular 40 is about the cases in which employers who assign, appoint foreign employees to work in provinces, cities other than where (s)he is now working, specifically as below:

In the case where a foreign employee is already granted a valid work permit and assigned and appointed to take up the same position in a province other than where (s)he is now working for at least 10 consecutive days, (s)he shall be exempted from application for a new work permit. However, that foreign employee’s employer shall send a written notification attached with a certified true copy of the existing work permit to the Department of Labor, War Invalids and Social Affairs of the province where the foreign employee’s new workplace is located, that specifies the enterprise name, address of the new workplace, position, title and working period.

5. In addition, Circular 40 also attaches updated Forms in relation to: The explanatory report on demand for utilization of foreign employees; The explanatory letter about changes in demand for utilization of foreign employees; Application for granting or re-granting work permits to foreign employees; Application for confirmation on work permit exemption; Logbook for a list of foreign employees; Reports on status of utilization of foreign employees on a quarterly, six month and annual basis; Comprehensive report on foreign employees.

Circular 40 took effect on 12 December 2016 and replaced Circular No. 30/2014//TT-BLĐTBXH dated 20 January 2014 issued by the Ministry of Labor – Invalids and Social Affairs, providing guidance on number of articles of the Decree No. 102/2013/NĐ-CP dated 5 September 2013 issued by the Government detailing implementation of number of articles of Labor Code on foreign employees in Vietnam.

II. CIRCULAR 35 STIPULATES THE WORK PERMIT EXEMPTION FOR FOREIGN EMPLOYEES INTERNALLY TRANSFERED BY ENTERPRISES OPERATING WITHIN ELEVEN SERVICE SECTORS VIETNAM COMMITS TO WTO

In order to provide specific and detailed guidance on cases of work permit exemption applicable to foreign employees transferred by a foreign enterprise to work in its commercial presence in Vietnam within 11 service sectors in Vietnam’s World Trade Organization (“WTO”) commitments, that provides guidance set out in Decree No. 11/2016/NĐ-CP dated 3 February 2016 (”Decree 11”), the Ministry of Labor – Invalids and Social Affairs issued Circular No.  35/2016/TT-BLĐTBXH dated 28 December 2016 (“Circular 35”). In accordance with Circular 35, in the case where a foreign enterprise has its commercial presence in Vietnam within 11 service sectors (including Trade, Information and Communication, Construction, Distribution, Education, Environment, Finance, Health, Tourism, Culture & Entertainment, Transportation), and foreign employees who have been working for the foreign enterprises with the term of at least 12 months, being internally transferred to the foreign enterprise’s commercial presence in Vietnam, are subject to work permit exemption.

In accordance with Article 2 of Circular 35, a commercial presence of a foreign enterprise in Vietnam includes:

1. Foreign invested enterprises;
2. Representative offices, Branches of foreign enterprises in Vietnam;
3. Operating offices of foreign investors in the business cooperation contract.
    

In addition, Clients should please note that under Circular 35 there is a different guidance on the nature of 11 service sectors respectively applied to positions of an administrator, managing director, expert or technician. Accordingly, Appendix I of Circular 35 is categorized as administrator, managing director, expert and Appendix II is for technicians. Other matters in relation to evidence certifying a work permit exemption for foreign employees for cases above, and evidence certifying internal transfer of foreign employees, please refer to Circular 35. Circular 35 takes effect as of 10 February 2017.

This is not a formal legal document.

All information in this document is for reference and general guidance purposes only.

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