When businesses in Vietnam sign labor contracts with foreign experts, disputes easily arise because of differences in law, work permits, contract duration, termination conditions... Below is a summary of the latest regulations and practical experience to effectively handle labor contract disputes involving foreign elements.
According toDecree 152/2020/ND‑CP, amended by Decree 70/2023/ND‑CP, experts are foreign workers who meet at least one of the following conditions: university graduate or higher + at least 3 years of experience relevant to the working position; or have at least 5 years of experience + appropriate practice certificate; or special cases decided by the Prime Minister.
Experts who are foreign workers must have them when working in Vietnamwork permit, except for cases not subject to a work permit such as working less than 30 days and not more than 03 times in 01 year as an expert, technician, manager, or executive director.
Regarding type of labor contract: new law stipulatesYou can only sign a fixed-term labor contractwith foreign workers, andThe contract term must not exceed the term of the work permit. Signing an indefinite-term labor contract for foreign experts is not allowed.
The 2019 Labor Code (LLD) has supplementsSpecial cases of termination of labor contracts with foreigners, for example: if the work permit expires; If the employee is deported according to a legally effective judgment or decision; or other cases due to relevant regulations.
Upon termination, the rights of foreign experts are guaranteed according to Vietnamese labor law, except international treaties containing other provisions. For example: severance pay, payment of unpaid wages, payment of other rights if agreed upon in the contract.
Statute of limitationsRequirements for resolving individual labor disputes in Vietnam:
Labor mediator: 06 months from the date of discovery of the violation.
Labor Arbitration Council: 09 months from the date the violation was discovered.
People's Court: 01 year from the date of discovery of the violation.
Competence: Personal disputes involving foreign elements are resolved through the following agencies:
First of alllabor mediator(except in cases where mediation is not required by law).
If conciliation fails or cannot be conciliated, a request may be madeLabor Arbitration CouncilorPeople's Court
There are special casesNot required to go through a labor conciliator, for example, disputes related to dismissal, unilateral contract termination, severance pay, compensation upon contract termination.
Prepare documents
Labor contract (original or certified copy) between foreign expert and enterprise.
Work permit, extension if any; confirmation that a work permit is not required if exempted.
Relevant documents: emails, notices, minutes, degrees, proof of experience, vocational certificates, documents on residence status, goodwill to negotiate...
Documents related to violations, if any: termination agreement, dismissal, disciplinary decision, salary arrears, overtime salary, unpaid leave, etc.
Choose a solution method
Internal negotiation & mediationFirst of all, because it is easy to do, less expensive, and has the opportunity to maintain good relationships.
If negotiations fail, use itlabor mediatoris a required step in many cases.
If conciliation fails or the case is not in need of conciliation, you can choose betweenlabor arbitrationandPeople's Court. Arbitration is usually faster and more confidential, but if the other party does not accept arbitration, it must go to court.
Especially in cases where foreign experts have left Vietnam, or because of international factors, they can authorize a representative lawyer in Vietnam to handle the dispute.
Carefully check the work permit and its validity period: if the permit expires, the contract may also be terminated according to regulations.
Clearly agree in the contract on work conditions, insurance, working time, salary, responsibilities if one party violates, and costs if the contract is terminated.
Preserve evidence (conciliation, written exchange, email, minutes...). When a foreign expert leaves Vietnam, he or she can authorize a representative to receive notification and file an application at the Labor Court/Arbitration Council.
Monitor the statute of limitations for filing a lawsuit closely: do not lose the right to request dispute resolution because the statute of limitations has expired.
Consider the influence of international agreements, if any: sometimes Vietnamese law may be adjusted or exempted due to international treaties to which Vietnam is a member.
When a dispute arises with a foreign expert, businesses and employees need to calmly evaluate: what is the dispute about (salary, dismissal, work permit, working conditions...), who is the foreign expert, is there still a statute of limitations, is there a written contract, what is the work permit like?
Prioritizenegotiation/conciliationin advance to reduce costs and reduce reputational risks.
In case the dispute cannot be resolved by conciliation, prepare complete documents to bring up the disputelabor arbitrationorPeople's Court—use authorization if the expert has returned home.
Always monitor new changes in labor laws, decrees related to work permits and termination of labor contracts with foreigners to ensure that businesses do not violate and employees' rights are protected.
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